Investment in the renewable energy sector will be boosted due to low-carbon electricity incentives leading to an additional £100 billion investment by 2020, according to the Department of Energy and Climate Change (DECC).
The secondary legislation of the government’s Electricity Market Reform (EMR) has been pushed forward, taking one step closer to being passed in law. It is hoped that the reform will encourage the private sector to investment in low-carbon electricity generation by providing certainty. The move includes two new mechanisms to incentivise investment – contracts for difference (CfD) and the capacity market.
A CfD guarantees prices for energy suppliers for a 15-year period, ensuring that projects will receive financial support to back investment made. Eight projects that were given the go-ahead in April were awarded a CfD, with more being available later this year.
The capacity market provides a regular payment to reliable forms of energy generation, in return for generating capacity being made available when the system is tight.
In a statement the DECC said, “The new arrangement will further strengthen the UK’s position as one of the most attractive places to invest in energy globally, supporting economic growth and job creation.”
The department continued that the EMR would help bring forward an estimated £100 billion of further investment in the energy sector by 2020. It added that the reforms have already delivered up to £12 billion of private sector investment and further investment will come forward as CfDs are allocated.
The DECC faced strong criticism when it announced large-scale solar farms would be expected to use the CfD scheme from April 2015, after it confirmed plans to halt subsidies through the renewables obligation scheme for the sector. Concerns that the move would undermine growth because solar will have to compete with other forms of renewable energy were raised.
Speaking ahead of a conference that will look at CfDs and the solar industry, David Owen, CEO of Solar Media, explained that whilst the industry was at first “shocked”, he believes it is now being more optimistic about the opportunity, and overall the change will benefit the sector.
He continued that in the short-term the move might impact on the industry’s ability to raise investment.
“Ultimately it might delay some projects by 6-12 months after April 2015 but those companies who have the size and scope to continue investing in sites during that period will be able to attract favourable investments,” Owen added.
The conference – to be held in London on June 25– will feature DECC minister Greg Barker speaking about the issue.
Photo: Robert Pittman via Flickr
Like our Facebook Page
How Can Technology Help You To Lead A Sustainable Lifestyle?
4 Factors That Can Save The Environment Along With Going Paperless
How Peer to Peer Works On Eco-Friendly Trading Platforms
5 Questions Eco-Friendly Entrepreneurs Need To Ask Unhappy Employees
Is Trade Good or Bad for the Environment (Examples and Laws)
7 Best Investments to Make for an Eco-Friendly Business
4 Tips For Choosing An Eco-Friendly Home Backup Power Source
10 Things To Consider When Choosing A Home Solar Company
5 Sustainable Ways Of Disposing Building And Demolition Waste
Why 2022 Is Your Last Chance to Get a 26% Return on Your Solar Kit
Low Emission and Clean Air Zones: What You Need To Know
A Guide to Eco-Friendly Landscaping
12 Essential Things for Buying Your First Home
Zero Waste Living and Its Importance
Harnessing Sustainability with User-Centric Technology Innovation
How the U.S. Government is Promoting Green Energy in the Country
Tips for Optimal Waste Management in Your Home
Is It Possible to Work in Tech Without Harming the Planet?
Hypermiling: The 3 Ways To Drive Your Car For Maximum Fuel Efficiency
Making Your Dream of Having an Eco-Friendly Garden Come True
- Features11 months ago
Seven Health and Safety Tips for Eco-Friendly Products in a Green Home
- Energy12 months ago
Eco-Friendly Homeowners Lower Carbon Footprints through Greater Air Conditioner Efficiency
- Features11 months ago
Essential Guidelines for Eco-friendly Moving into new Home
- Features10 months ago
5 Compelling Reasons to Hire an Eco-Friendly Contractor