Solar secures 2.2GW in latest Contracts for Difference auction

Solar has secured more than 2.2GW at a price of £45.99/MWh in the latest Contracts for Difference (CfD) auction.

In total 66 solar projects – more than all of the other technologies combined – secured contracts in auction round four (AR4), with capacities ranging from 6MW through to 112MW.

Cleve Hill became the first nationally significant solar farm to gain a CfD contract, securing support for 112MW of its total 350MW.

There are five solar projects that are expected to be delivered in 2023/24, earlier than any other winners in this fourth auction.

“Today’s announcement of over 2GW of subsidy-free contracts cements solar as a major part of the solution to Britain’s energy security crisis. Solar and wind are now undeniably the cheapest, as well as the cleanest, way to power the country,” said Chris Hewett, chief executive at Solar Energy UK.

“CfDs are only one way to deliver solar. There are many solar farms already under construction that will sell their power direct to the market, and rooftop installations are cutting corporate and household energy bills.”

Some of the biggest winners include:

  • JBM Solar secured contracts for 319.68MW across seven projects
  • ScottishPower secured contracts for nine projects with a capacity of  238.74MW under its EEB applications, as well as ScottishPower Renewables securing a contract for one 49.9MW site.
  • Spring Development secured contracts for 142.94MW across four projects
  • Lightsource secured contracts for 129.9MW across three projects
  • NextPower secured contracts for 118MW across four projects
  • Voltalia secured contracts for 70MW across two projects
  • Bluefield secured contracts for 62.38MW across three projects
  • Low Carbon secured contracts for 61MW across two projects

The bulk of the winning projects are located in England, with three in Wales (Bryn Henllys Solar Farm, Carn Nicholas Solar Farm and Tycroes solar farm) and three in Scotland (Milltown Airfield Solar PV, Cullerlie Solar PV and Speyslaw Solar PV).

“All told, the 79MW Scottish CfD pipeline is a clear demonstration of the industry’s viability and vitality – and proof that it produces affordable power,” noted Solar Energy UK.

The strike price is worked out on the basis of 2012’s pricing, making the £45.99/MWh equivalent to £53.40/MWh (5.3p/kWh) in today’s money. This price means that it is likely that these project will return more money to the Treasury than they received according to Solar Energy UK.

Amid high power prices, CfD contracted generators have been paying back surplus profit during various periods over the last year. According to Low Carbon Contracts Company (LCCC) in January, around £39,222,407 is to be returned to electricity suppliers through the CfD due to the high power prices.

“This is an absolutely massive positive result for the UK industry, in particular for ground-mount solar farms, not just the volume of capacity, but the number of projects and the sizes of them going right up to the Cleve Hill site in Kent,” Solar Media’s head of market research Finlay Colville told Solar Power Portal.

“The results probably far exceed anyone’s expectations, and will offer a number of developers and investors security to go ahead with build over the next few years. And the risk free proposition of the winners in the CfD auction will also provide a buffer for some of the other projects under development that require more work and an alternative means of financing through PPAs.

“I think another thing is that the timing of the projects coming online should also allow a number of developers to plan carefully as opposed to being rushed to build over the next six months when component pricing is high, and in short supply.”

Overall 93 renewable energy projects across England, Scotland and Wales have won contracts, with a total capacity of nearly 11GW.

Offshore wind secured the bulk of this, winning 7GW at a strike price of just £37.35 (£43.37/MWh (4.3p/kWh) in today’s money), which is almost 70% less than the price per unit it secured the first allocation round in 2015.

Auction round four (AR4) opened for bids in December and closed in January, with a target of 12GW of electricity capacity set to gain £285 million of funding. This was the first CfD auction solar has been able to compete in since 2015, with Pot One technologies – onshore wind and solar – reintroduced after years of campaigning from industry.

 

Read more about the wider AR4 results on Solar Power Portal’s sister site Current±

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