The British government has today published details of its second Contracts for Difference (CfD) auction due at the beginning of April next year.
The CfD mechanism is intended to support renewable electricity projects, and the government confirmed that a total of £290 million ($361 million) has been allocated for the first tranche of contracts.
In total, CfD funding will amount to £730 million over the next four years. However, solar PV technology looks set to have once again missed out, with CfD auction funds available for less established technologies such as offshore wind, wave and tidal, geothermal and bioenergy.
The Department of Business, Energy, Innovation and Skills (DBEIS) has set a strike price of £105/MWh for offshore wind projects deployed by 2020/21, falling to £100/MWh a year later. Solar PV at both small and large scale is already priced cheaper than these strike rates – a fact that has dismayed some renewable energy advocates.
"Despite this new support, it is frustrating to see that the cheapest technologies, such as onshore wind and solar, are still being blocked," said the head of policy and external affairs at the Renewable Energy Association, James Court. "We need the government to take further action to bring balance to the market because the current situation sees gas, nuclear and even diesel all get financial support while the lowest cost renewables are blocked to market."
Solar’s relationship with the CfD mechanism has never been the smoothest, with only a handful of projects for PV winning funding in the initial auction round. Since the removal of the Renewable Obligation Certificate (ROC) and the slashing of the FIT, subsidy for solar PV in the U.K. has been anemic, and this latest publication from government simply reaffirms the belief in Parliament that solar has already had all the support it needs.
The government did, however, launch its consultation to end coal generation by 2025 – a move that was welcomed by the REA. “It was important for investor confidence that the government fulfilled earlier pledges concerning the coal phase-out,” said Court.
DBEIS’ business and energy secretary Greg Clark said that today’s announcement sends a "clear signal that Britain is one of the best places in the world to invest in clean, flexible energy". He added that a key part of the government’s upcoming industrial strategy is to continue upgrading energy infrastructure to lower carbon emissions and spur the growth of large-scale, low-carbon energy as the U.K. works towards meeting its Paris Agreement climate change goals.