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Renewables bid to share £300m

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Established technologies such as onshore wind farms will compete for up to £65 million in support

Established technologies such as onshore wind farms will compete for up to £65 million in support

Established technologies such as onshore wind farms will compete for up to £65 million in support

Renewable electricity projects will be able to bid for a share of £300 million subsidies for new schemes this autumn, the Department of Energy has said.

The level of subsidies on offer under the new "contracts for difference" regime, which guarantees a set price for electricity from low-carbon projects to give investors certainty on their returns, is an increase of £95 million from the pot outlined in July.

But there was bad news for large-scale solar farms which have seen their support slashed, with subsidies under the existing "renewables obligation" ending next April, two years before they are curtailed for other technologies.

The Department of Energy (Decc) said the move was necessary as large-scale solar developments - which have caused some controversy because of their impact on the countryside - were growing faster than expected and would exceed the budget for subsidies by £40 million in the next two years.

But the industry has accused Decc of singling out solar farms for unfair treatment and threatening jobs and investment in renewables by creating new uncertainty with policy changes.

Today's announcement on contracts for difference split the budget for auctions in which projects can bid for subsidies into two separate schemes, one for established technologies and one for newer types of renewables.

Established technologies, such as onshore wind farms and large- scale solar, will compete for up to £65 million in support in this year's annual auction.

Less established technologies, including offshore wind and marine power schemes, will have a share of up to £235 million, Decc said.

According to officials the contracts for difference regime will deliver new low-carbon electricity generation more cheaply than the old subsidies regime, with households, who foot the bill, paying on average £41 a year less up to 2030 than without the changes.

Energy Secretary Ed Davey said: "We are transforming the UK's energy sector, dealing with a legacy of underinvestment to build a new generation of clean, secure power supplies that reduce our reliance on volatile foreign markets.

"Average annual investment in renewables has doubled since 2010 - with a record-breaking £8 billion worth in 2013. By making projects compete for support, we're making sure that consumers get the best possible deal as well as a secure and clean power sector."

The budget for next year's auction will be confirmed next year, but it has already been indicated that £50 million will be available for established technologies for the next round of subsidies.