The government has reduced the number of criteria renewables developers must meet in order to receive rewards designed to incentivise the deployment of low carbon generation.
First mooted last year, the Contracts for Difference Sustainable Industry Reward (CfD SIR) aims to help accelerate the deployment of low carbon electricity generation, specifically offshore/floating offshore wind, by addressing some of the economic, social and environmental challenges faced by industry.
The process will be run as a competitive allocation for extra revenue support six months before the main CfD auction. It is due to be used for the first time next year during Auction Round 7 (AR7).
In its response to a consultation on its proposals, the Department for Energy Security and Net Zero (DESNZ) said it has opted for a “lighter-touch” approach.
The government has said it will simplify the process by reducing the number of criteria down to two, and the number of questions down to three.
This means that the criteria for Sustainable Industry Rewards will be:
- Investment in shortening supply chains, in deprived areas in the UK; or
- Investment in more sustainable means of production, anywhere in the world;
- or combining both approaches, by investing in shorter supply chains in UK deprived areas and ensuring such investment goes to more sustainable means of production.
The government has additionally published its draft CfD Sustainable Industry Reward Allocation Framework – the rule book for how the SIR process will operate, including the minimum standard values.
Those who are eligible must contact DESNZ within the five working days before the opening of the SIR application window to indicate their intention to submit an application for assessment.
They must submit a single SIR application per project during the application window. If that project is to be split into several CfD units, the eligible generator may still submit a single application but must specify which proposals relate to which unit.
Additionally, a single SIR application can contain multiple proposals against the criteria.
The application window will be open for five working days after which it will be closed. The Secretary of State must assess all applications within 40 working days, starting from the day after the application window closes.