The bidding window the third Contracts for Difference (CfD) auction has been extended to 29 August following a legal challenge.
Durham-based Banks Renewables said it had started judicial review proceedings because the government was “discriminating against” onshore wind and other renewable sources by favouring offshore wind projects.
Banks Group’s mining arm has previously appealed against a decision to refuse planning permission for a coal mine at Druridge Bay – a battle it eventually won in the High Court.
Managing director Richard Dunkley said: “At a time when the UK government has said it wants to accelerate its decarbonisation objectives, it would seem illogical to most people that, for the last four years, it has itself significantly undermined the deployment of the lowest cost low carbon technology available – onshore wind.
“We have consistently expressed the view for many years that, as the most cost-effective method of low-carbon electricity generation available, consented onshore wind farms should be included within the CfD auction process, and we have been in discussion with the UK government over this matter for several months.
“It has so far indicated that it intends to continue with a policy which will result in slower decarbonisation and reduces competition in a way which leads to higher electricity bills for everybody, and we have therefore very reluctantly had to take this next step.
“We simply desire a level playing field, and believe consented onshore wind farms are legally entitled to participate in all CfD auction processes and to have an opportunity to access the aid necessary to construct consented sites.”
A BEIS spokesperson said: “Our CfD scheme has supported the investment of £490 million annually in renewable technologies and more than 50 per cent of our energy now comes from low-carbon sources – a vital part of our move to becoming a net zero emissions economy by 2050.
“We run the scheme lawfully and will be contesting this claim.”
BEIS said the delivery body for the scheme, National Grid Electricity System Operator (ESO), has informed applicants of the legal challenge and that the bidding window has been extended to 29 August. The window opened on 9 August and was previously scheduled to close today (15 August).
In mid-July, the ESO revealed it had launched a review of non-qualifying projects, thereby ruling out the fastest two of five possible tracks within the auction timetable. A few weeks later, the ESO announced that all applicants had qualified following the review, meaning the two slowest of the five possible tracks had also been ruled out.
CfDs provide low-carbon generators with a guaranteed price of the electricity they produce. Up to £65 million of annual subsidies are being allocated up as part the third auction round, which has a 6GW cap on procurement.