Contracts for Difference (Miscellaneous Amendments) Regulations 2024

Lord Offord of Garvel Excerpts

Monday 2nd December 2024 Grand Committee

[Earl Russell (LD)]

My Lords, I rise to speak very briefly to this one. We are happy to support the amendment.

I have a couple of questions for the Minister. First, what measures are the Government taking to ensure that consumers continue to get value for money from these contracts? Secondly, is the Minister certain that the repowering process is treading the right path between getting value for money for the Government with these contracts, while not impeding further development of onshore wind energy?

[Lord Offord of Garvel (Con)]

My Lords, I rise to support His Majesty’s Government’s draft Contracts for Difference (Miscellaneous Amendments) Regulations 2024. These regulations will enable further construction of wind sites and will increase investment in the wind sector by increasing the options for using contracts for difference. The regulations will extend the option to phase projects under the contracts for difference to floating offshore wind and for repowering onshore wind farms, as well as allowing onshore wind projects to apply for contracts for difference.

We on these Benches recognise the importance of using CfDs in the renewable sector to allow for increased investment in projects that have high upfront costs but long lifetimes and low running costs. Investment must be at the core of our green energy plans to ensure their financial viability. As it stands, CfDs are the main scheme for supporting new low carbon electricity generation projects across the UK, and these measures will derisk the construction process for offshore wind and to repower onshore wind.

The Government introduced the CfD scheme in 2014 to support the UK’s journey to net zero and, by 2022, projects managed under contracts for difference generated the energy to power 7 million homes and mitigated over 5 million CO₂ emissions. Therefore, we welcome this Government’s continued use of these important and helpful schemes. We support the increased use of contracts for difference and, as such, support these regulations to increase the use of wind power to reach net zero targets while maintaining the importance of investment in the sector.