Starting gun fired for CfD round two

Absence of solar and onshore wind branded "downright disappointing"

The government has published details of the eagerly-awaited second allocation round for contracts for difference (CfD).

According to official documents published yesterday, renewable energy schemes will be able to compete for a total budget of £290m for each of the two delivery years - 2021/22 and 2022/23 – under the next round, which will open on 3 April.

The eligible areas include offshore wind, anaerobic digestion, wave and geothermal. Solar energy, however, is not covered under the scheme.

The administrative strike price for offshore wind has been set at £105/MWh for 2021/22 and decreases to £100/MWh for 2022/23, while anaerobic digestion will be £140/MWh and £135/MWh, respectively.

Dedicated biomass with CHP has been set at £115/MWh for both years.

The strike price for wave will be £310/MWh for 2021/22 and decrease to £300/MWh the following year and tidal stream has been set at £300/MWh and £295/MWh.

The government also published its response to a consultation on geothermal in the CfD framework yesterday, in which it fixes a strike price of £140/MWh for both years.

The documents show a limit of 150MW will be applied for projects with dedicated biomass with CHP, advanced conversion technologies and anaerobic digestion.

The Renewable Energy Association’s senior policy analyst, Frank Gordon, said the absence of the cheapest forms of renewable energy in the auction, like solar and onshore wind was “downright disappointing”.

“It is a further disappointment that there has been a decision to cap deployment from fuelled technologies (such as advanced waste to energy), and to not offer any guaranteed support for emerging renewables, such as wave and tidal,” said Gordon.

“It is positive to have a strike price for geothermal confirmed,” he added. “Frustratingly, however, in order to allow them to bid into the auction they will have to demonstrate lower costs than the more mature offshore wind. A lack of ring-fenced funds will likely scotch them and other emerging renewables like wave and tidal, which have huge potential for the future.”

“What industry badly needs is a timetable for the next auctions after this one to allow them to plan for the longer term, which is now even more important in the light of the uncertainty over carbon prices and the LCF, as a result of last week’s budget.”

The executive director of RenewableUK, Emma Pinchbeck said it was “good to see the CfD process moving forward”.

“This will give greater certainty to investors and developers who are keen to get on with building renewable energy projects in British waters,” added Pinchbeck.

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