By Jaime Llinares Taboada

The U.K. government said Monday that it is launching its biggest ever round of contracts for difference for renewable-energy capacity.

Contracts for difference offer stable revenues to electricity generators over a 15-year period, protecting them from the ups and downs of the wholesale power market and encouraging investment. These contracts are allocated to the lowest price bids in an auction process, driving efficiency and cost reduction.

This will be the fourth round of the CfD program, which aims to double the renewable capacity secured in the third round. It includes a 265 million-pound ($366.6 million) pot to support projects, of which GBP200 million will be provided to offshore wind.

"The additional offshore wind capacity resulting from the funding alone could power around 8 million homes," the government said.

For the first time since 2015, established renewable technologies--onshore wind and solar--will also be able to bid.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

September 13, 2021 06:03 ET (10:03 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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