UK: First Contracts for Difference solar farm connected to grid

British solar developer Lightsource Renewable Energy has connected the first solar plant to be developed in the U.K. under the Contracts for Difference (CfD) scheme.

Connected at the end of June, the 11.94 MW Charity Farm installation in the English county of Shropshire was one of five winning solar PV projects in last year’s inaugural CfD auction, which in total saw 71.55 MW of solar awarded.

The CfD mechanism was introduced as an intended replacement of the recently scrapped Renewable Obligation Certificates (ROC) and works by offering a stable revenue for generators at a fixed level, with government-backed ‘top ups’ for whenever a plant’s rate of electricity generation falls below an agreed strike price.

Since last year’s CfD rollout for solar, the government has confirmed that there will not be a second CfD auction for which solar projects are eligible this year.

Lightsource secured a strike price of £79.23 per megawatt hour ($104.9/MWh) for the Charity Farm project last year, and will sell the electricity produced onsite to Axpo UK Limited in a deal worth around $10 million.

Lightsource CEO Nick Boyle said that the completion of the solar farm demonstrates the many benefits of this type of energy, but lamented the government’s reluctance to confirm the date of a second CfD auction for solar.

"A truly competitive system is fair to all concerned, but there has been no new round of auctions announced for solar as yet and, if the U.K. is serious about the future of its energy security, it is important that this is addressed," Boyle said. "Great strides have been made in the industry and we firmly believe that solar has a significant role to play in the overall U.K. energy mix.”

Funding for the project came from the Royal Bank of Scotland (RBS), and RBS’ director of infrastructure and structured finance, Craig Love, added: "RBS has to date arranged funding for solar farms able to produce more than 1.8 GW of power. We have a strong pipeline of solar projects going forward and continue to focus on helping our customers in the U.K. and across Western Europe."