UK: No CfD-backed large-scale solar for next fiscal year

The administrative body overseeing the new Contracts for Difference (CfD) auction scheme has revealed that the two winning solar bids due for delivery in the next fiscal year will not go ahead.

As feared, the Low Carbon Contracts Company has confirmed that both Wick Farm Solar Park and Royston Solar Farm – which won the CfD auction promising to deliver solar power at £50/MWh ($74.5/MWh) – will not be proceeding with their promised developments.

Having negotiated a strike price for solar plants at the same level as the current wholesale cost of electricity, the U.K. solar industry predicted that the proposed projects would prove unfeasible.

The confirmation that neither solar park will go ahead as planned between 2015/16 means that there will be no large-scale solar PV plant (>5 MW) developed in the U.K. under either the CfD scheme or the renewable obligation (RO) scheme next year.

In responding to the news, Leonie Greene, head of external affairs at the Solar Trade Association (STA), remarked: "That no large solar farms will be built in the next year under the RO or CfDs is a tragedy, as we predicted these types of projects could be cheaper than gas in just three years with stable policy support."

February’s inaugural CfD auction saw just five solar successes, amounting to 72 MW of proposed cumulative solar capacity. Now, however, two of the five winning bids will not be built, leaving just 38 MW of CfD-backed large-scale solar to come online in fiscal year 2016/17.

Those successful projects that are still penciled to go ahead next year are the Charity Farm Project from Lightsource, a 14.67 MW solar farm that won with a strike price of £79.23/MWh; the 12 MW Netley Landfill Solar project (also £79.23/MWh), and the 12 MW Triangle Farm Solar Park, which also won at a strike price of £79.23/MWh.

From rush to ruin?

So far this year, the U.K. solar sector has enjoyed what is widely expected to be a bumper quarter for solar PV development as companies rushed to connect their projects before April 1, which was the date that the RO support scheme was withdrawn for projects greater in size than 5 MW.

The new CfD scheme unfairly pitches solar PV against onshore wind (which won and will proceed with 15 out of 15 CfD contracts) in the battle for a diminished pot of support funds, creating an unevenly balanced playing field that serves to puncture solar’s hitherto impressive growth.

"British solar SMEs are now having to rewrite their business plans, again," added Greene. "For an industry that is predicted to be the dominant global energy source by 2050, the U.K.’s rollercoaster policies are not helping its position.

"We hope that the new government looks at this technology with fresh eyes to develop a fairer and more sensible approach."

The U.K. goes to the polls on May 7, after which time a new government could well be installed that is more sympathetic and supportive of the solar industry.