The Government has published its ambitious package of measures which it hopes will attract £110 billion worth of investment from the private sector and support 250,000 jobs by 2020.
The Electricity Market Reform (EMR) Delivery Plan sets out DECC’s final decision on strike prices for Contracts for Difference (CfDs) for renewable technologies.
CfDs will support low carbon generation by giving eligible generators increased price certainty through a long term contract and removing commercial risks such as wholesale price risk.
The announcement comes after the Energy Bill was passed into law yesterday after it was given the royal seal of approval by the Queen.
The strike prices have been set for the period 2014/15 – 2018/19 and provide a basis for renewable electricity to achieve at least 30% of generation by 2020, in line with the EU renewables target, DECC said.
Most of the strike prices have remained the same as announced earlier this month but energy from waste CHP has been reduced by £10 to £80/MWh. The strike price across all Scottish islands has been also been stuck at £115/MWh despite the Scottish Government calling for tailored support.
Deployment scenarios for 2020 have been slightly changed, with offshore wind reducing by 1GW to 15GW while the onshore wind range has increased by around 2GW to between 11GW and 13GW.
The Plan suggests the EMR could cut annual household electricity bills by an average of £41 or 6% over the period 2014 to 2030.
The reforms are expected to help the UK develop a clean, diverse and competitive mix of electricity generation to meet renewable and decarbonisation targets and ensure security of supply while keeping the bills down for consumers.
Energy Secretary Ed Davey said the government is “considering introducing competition for more established low carbon technologies when the CfD regime is introduced”, which will be decided in early 2014.
He added: “We have driven the Energy Bill through Parliament on time to send out a clear signal to investors and industry. We have delivered the certainty they need and confirmed Britain’s position as one of the most attractive countries in the world to invest in energy generation.
“We are now able to build on the measures already in place to deliver cleaner energy, affordable bills, energy security and the creation of thousands of skilled green jobs across the UK.”
The Government has committed to publishing an EMR Delivery Plan every five years.