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NCE Daily News Wednesday 23 April: First renewables schemes given government price guarantee

The first schemes to be approved for the government’s Contracts for Difference are revealed. Also on the theme of low carbon, a number of projects have won government money to research and develop ideas for new types of vehicle technology.

Eight major renewable energy schemes have been given government backing today under a scheme designed to guarantee energy prices.

The projects, which are subject to final developer approval, are the first to have been rubber stamped for the government’s Contracts for Difference (CfD), which form part of its electricity market reforms.

Under CfDs, generators and developers receive a fixed strike price for the electricity they produce for 15 years, so if there is a shortfall between the agreed price and the market price for renewable energy in that period, government will pay the difference to the producer.

The schemes include offshore wind farms, coal to biomass conversions and a biomass plant with combined heat and power. By 2020, the projects will generate up to £12bn of private sector investment, supporting 8,500 jobs, and potentially adding 4.5GW of low-carbon electricity to Britain’s energy mix (equating to around 4% of capacity).

Once built, the successful projects will contribute around 15TWh or 14% of the renewable electricity the government expects by 2020.

The Contracts for Difference beneficiaries

ProjectDeveloperTechnologySize (MW)Location
BeatriceBeatrice Offshore Windfarm
Limited
Offshore wind664Outer Moray
Firth, Scotland
Burbo BankDong Energy Wind Power Offshore wind258Liverpool Bay,
near river
Mersey
Drax 2nd conversion unitDrax Power Biomass conversion645Selby,
North
Yorkshire
DudgeonDudgeon Offshore WindOffshore wind402The Wash,
near Cromer
Hornsea 1Dong Energy Wind Power Offshore wind1200North Sea,
near
Yorkshire
LynemouthLynemouth Power Biomass conversion420Ashington,
Northumber
-land
Teesside Renewable EnergyMGT Power Biomass with combined heat and power299Middles-
brough
Walney ExtensionDong Energy Wind PowerOffshore wind660Irish Sea,
near
Cumbria

 

“Record levels of energy investment are at the forefront of the government’s infrastructure programme and are filling the massive gap we inherited,” said energy secretary Ed Davey. “It’s practical reforms like these that will keep the lights on and tackle climate change, by giving investors more certainty.”

Further CfDs will be made available in the autumn.

 

Business Secretary Vince Cable is to announce the first wave of investment into developing and commercialising technology for vehicles of the future as part of a £1bn funding scheme.

The Advanced Propulsion Centre (APC) will receive £500M from the government and industry over the next 10 years.

Consortiums led by Ford, GKN, Cummins and JCB have received a total £133M in this first round for projects that aim to improve fuel efficiency and reduce carbon emissions.

“The next generation of cars, buses and diggers will be powered by radically different technologies and I want them to be developed here in Britain,” said Cable. “Over the last few decades the British car industry has been transformed and today a new vehicle rolls off a UK production line every 20 seconds.”

The four winning schemes

Ford (with partners Cambustion, Continental Automotive, Lubricants UK, Loughborough University, Raicam Clutch, Schaeffler, Unipart Eberspacher Exhaust Systems, University of Bath, University of Bradford and University of Nottingham) will receive a £13.1M grant towards a £100M programme to upgrade the EcoBoost engine. This will accelerate the introduction of advanced low carbon technologies to deliver improved fuel efficiency and lower emissions.

GKN Land Systems (with partners Alexander Dennis and Williams Hybrid Power) will receive £7.5M towards a £16M project to apply Formula 1 technology from Williams to buses. The Gyrodrive system is designed to save the braking energy of a bus as it slows for a stop and use it to accelerate it when it starts moving again. It is hoped he system will deliver fuel savings of 25%.

Cummins (with partners Castlet, Dynex Semiconductor and University of Nottingham) will receive a £4.9M grant for a £9.9M project to deliver significant reductions in carbon emissions from bus engines through the development of new stop-start diesel engine technology.

JCB (with partner Flybrid) will receive a £3.3M grant for a £7.3M project to apply Formula 1 technology to excavators. This will reduce fuel consumption and CO2 emissions. On average, the carbon emissions of a single 20t excavator could be reduced by an estimated 16t per year.

Cable also announced today that companies can shortly bid for a further £75M from the APC with the launch of its second competition. The APC will now run bi-annual competitions which open in April and October each year.

 

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