The contracts for difference (CfD) scheme, which awards subsidy contracts for green energy developers, is a vital tool when it comes to reforming the UK’s electricity market and reducing the country’s carbon footprint, argues Michael Wilkins, head of environmental research at Standard & Poor’s in an opinion piece for leading sustainability magazine, BusinessGreen. Because of these contracted subsidies, he explains, investors are incentivised to become more involved in projects with low carbon emissions.
Yet, as Wilkins highlights, it has not been plain sailing recently. A lack of clarity over when the next round of contracts will be awarded – as well as uncertainty as to the scheme’s inclusion of certain projects, specifically onshore wind farms – has caused project delays and even cancellations. Wilkins argues that the CfD scheme can only help to safeguard the UK’s low-carbon energy future with a clearer and more concise policy framework.
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