Posted on: 04/04/2017
The launch this week of the latest contracts for difference (CfDs) auction will see renewable energy projects going head-to-head with each other to try to secure UK Government funding.
The latest round, which opened on Monday and will run until April 21, has a budget of £290 million. Final decisions and clearing prices are expected to be announced in the autumn.
It is one of three rounds due to be held during the currently parliament, with a total budget of £730m.
Energy Minister Jesse Norman said that auction “underlines that Britain is open for business to companies seeking to invest in low-carbon energy”.
“It is designed to deliver clean power to a million homes, create jobs in the energy industry and provide new supply chain opportunities, while reducing carbon emissions by some 2.5 million tonnes a year,” she added.
Renewables could be ‘left disappointed’
Speaking to Utility Week, Gareth Miller, Chief Executive at energy consultancy firm Cornwall, warned that many renewable energy projects could be left disappointed by the auction.
“The combination of declining technology costs and the extent of competitive tension in the auction, and also the uncertainty about when the next auction will be will drive bidders to bid very aggressively, and I think that will result in very low prices for offshore wind as a result,” he said.
“Even if the prices are lower for offshore wind, it’s still evident to us that the strike prices would be lower again for PV solar and onshore wind.”
Last week saw the closure of the Renewables Obligation (RO) subsidy scheme to new projects.
> Read Miller's comments in full