The Department of Energy and Climate Change (Decc) said on Thursday morning that the £300 million included in its Levy Control Framework (LCF) will be divided into two separate pots for established technologies such as onshore wind and solar farms, and less established technologies such as offshore wind and marine power.
The budget for biomass support is not included in the £300 million LCF, Decc said.
Established technologies will compete for a total of £65 million of which £50 million will be awarded to projects which begin operations in 2015/16, with a further £15 million reserved for projects commissioning from 2016/17 onwards.
Less established technologies will compete for a larger pot size of £235 million of which £155 million is earmarked for projects beginning operations from 2016/17 with a further £80 million for those projects commissioning from 2017/18 onwards.
“The government is able to increase the CfD budget because the latest estimates of the overall costs of other policies, in particular the Renewables Obligation, are lower than expected. This will help to ensure that there is enough funding available to encourage competition in the auction,” a statement from Decc said.
In addition the department said it has held back some funding to manage the risk of overspending from other policies and for future auctions.
The LCF funding, which is paid through consumer bills, will be allocated to project developers through 15 year contracts following a competitive auction this autumn.
The budgets for next year’s auction, on top of the £50 million already set aside, will be confirmed in 2015.