To date, UK government’s Contracts for Difference (CfD) scheme has been successful in incentivising investment in low carbon electricity generation. Based on a cost-competitive auction, the current mechanism has facilitated significant reduction in the cost of electricity generated from offshore wind. However, in doing so the CfD has neglected to recognise the wider societal, economic, environmental and energy system benefits that low carbon technologies can offer. This includes supply chain development, job and skills creation and regional economic development.
The consultation seeks views on how SIR criteria could be introduced into the CfD scheme and how such criteria could address some of the challenges recently brought to light across the offshore wind industry. Regen is supportive of introducing SIR criteria, to encourage and incentivise meaningful action across non-price-based offshore wind benefits, and has suggested areas which should be further considered by government.