UK has increased the overall budget for AR6 under CfD scheme by over 50% from the originally allocated amount
For pot 1, where solar PV is one of the participating technologies, the budget has increased by £65 million
Offshore wind, which had no takers in the last round, has secured the largest chunk of £1,100 million
The budget for Contracts for Difference (CfD) Allocation Round 6 (AR6) for renewable energies in the UK has been increased by over 50% from the initial budget in March 2024 to more than £1.5 billion, said the country’s Department for Energy Security & Net Zero.
When AR6 was launched in March 2024, the government had announced a total budget of £1.025 billion for the winning projects. Offshore wind was allocated the largest share of £800 million. Solar PV secured a maximum of £120 million (see UK Officially Opens Contracts For Difference Allocation Round 6).
Under the revised notification, the budget has now been set at £1.555 billion, an increase of £530 million. It now entails:
£65 million increase for pot 1 to a total £185 million under which solar PV is competing alongside onshore wind and remote island wind
£165 million increase for pot 2 to a combined £270 million. Tidal stream, floating offshore wind, and geothermal are the participating technologies in this category
For pot 3, the addition of £300 million expands the allocation for offshore wind to a combined £1,100 million. The government considers offshore wind as the ‘backbone’ of the country’s clean energy mission despite the fact that it did not attract any bids in the last round (see Solar Wins Big In UK’s Allocation Round 5)
“Last year’s auction round was a catastrophe, with zero offshore wind secured, and delaying our move away from expensive fossil fuels to energy independence,” said UK’s Energy Secretary Ed Miliband. “Instead, we are backing industry to build in Britain, with this year’s auction getting its biggest budget yet. This will restore the UK as a global leader for green technologies and deliver the infrastructure we need to boost our energy independence, protect billpayers, and become a clean energy superpower.”
The maximum strike price for this auction has not been changed and remains the same as follows:
offshore wind £73/MWh
onshore wind £64/MWh
solar £61/MWh
floating offshore wind £176/MWh
geothermal £157/MWh
tidal £261/MWh
The auction is scheduled to take place in August 2024. Successful projects will be announced in September this year.
Solar Energy UK, the national solar energy association, has welcomed the increase in budget for AR6. Its Chief Executive Chris Hewett stated, “This is further very welcome news for the solar sector, following yesterday’s consultation on planning rules and the approval of three large-scale solar farms only a week after the election.”
The Labour Government that recently came to power has promised to triple solar power in the country by 2030 (see Britain’s Green-Leaning Labour Party Back In Power).