UK allocates 2.2 GW of solar at $0.055/kWh in CfD auction


On a day when most eyes in the UK were on Boris Johnson‘s attempts to cling to power, the government's Department of Business, Energy & Industrial Strategy announced the results of its latest renewable energy auction.

Some 66 solar projects secured 15-year contracts-for-difference (CfDs) in a procurement exercise hailed a success despite undershooting its capacity targets.

The government had aimed for 12 GW of new clean energy generation capacity and secured “almost” 11 GW, and fears that the £10 million ($11.9 million) budget for solar and onshore wind would not attract the desired 5 GW proved accurate.

Too little

Industry representatives had warned allocating that figure from the £285 million total purse was too little and the biennial exercise – which will become annual from 2023 – attracted 2.2 GW of solar, at a strike price of £0.046 ($0.055) per kWh, plus 887 MW of onshore wind for £0.042.

Under CfDs, applicants competitively bid to secure the lowest guaranteed strike price for the electricity they generate. Renewables plants receive the wholesale electricity price for the power they produce and when that figure is below the strike price agreed through the auction tender, the government will top up the difference. When the money received from the wholesale market for the clean electricity is higher than the strike price, the generator will hand the difference back to the government.

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The solar projects commissioned ranged in scale from a 6 MW second phase of the Oulton Solar Farm in eastern England to multiple 49.99 MW sites. Cleve Hill Solar Park, in southeast England, was the only outlier, with 112 MW of its planned 350 MW capacity securing a CfD.

Three of the 66 solar projects awarded CfDs are based in Wales and three are in Scotland. Some 251 MW of the CfD solar capacity is due to come online in the 2023-2024 fiscal year with the balance due the following year.

The auction also secured almost 7 GW of offshore wind capacity (at a £0.037/kWh strike price), almost 600 MW of remote-island wind turbines (£0.046), 40 MW of tidal stream generation (£0.179), a 32 MW floating offshore wind farm (£0.087), and a 30 MW incinerator equipped with combined heat and power technology (£0.046).

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