Solar and onshore wind set to see just 4% of £265m CfD budget

Utility Solar Summit: the flexibility of the post-subsidy market

This is the first auction solar and onshore wind have been able to compete in since 2015. Image: Getty

A total of £265 million has been set aside for the Contracts for Difference (CfD) scheme, the Department for Business, Energy and Industrial Strategy (BEIS) has today (13 September) revealed.

However, of this just £10 million – equivalent to 3.77% – is to be spent on so-called Pot One technologies, with these being established technologies such as solar and onshore wind.

The government is seeking up to 5GW of capacity from these in the fourth round of the scheme, which is the first to allow solar to compete since 2015’s auction. According to Solar Energy UK, solar will be able to compete for up to 3.5GW of electricity generation capacity in the auction, although there is over 4GW of projects that will be eligible to bid.

Chris Hewitt, Solar Energy UK chief executive, welcomed the “ambition” he said the government has shown, stating it will give a further boost to UK solar, which has already built 730MW of solar energy projects in the last 12 months.

However, he reiterated the trade body’s call for a target of tripling solar capacity to 40GW by 2030, which he said is required to meet the country’s carbon targets. Additionally, the government’s solar commitments “need to be sustained and extended to rooftop solar, to create another 13,000 new green jobs”.

Solar PV was first barred from the CfD support mechanism in 2016, leaving many large-scale solar assets stranded following the removal of the Renewable Obligation scheme, which the CfD was intended to replace.

The re-introduction of solar into the CfD follows years of campaigning by the solar sector, with trade body Solar Energy UK being a particular proponent. Meanwhile, calls have also come from the likes of the Confederation of British Industry, the Aldersgate Group and Energy UK.

Of the remaining £255 million of the CfD budget announced today, £200 million is to support offshore wind projects, while £55 million is to be available for emerging renewable technologies. Of that, £24 million is to support floating offshore projects.

“The new plans set out today deliver on the Prime Minister’s Ten Point Plan and will support the next generation of renewable electricity projects needed to power our homes and meet our world-leading climate change targets,” said energy minister Anne-Marie Trevelyan.

This latet auction is to open on 13 December and close on 22 January 2022.

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