The Department for Business, Energy & Industrial Strategy (BEIS) in the UK plans to award up to 12 GW of renewable energy capacity under allocation round 4 (AR4) of its Contracts for Difference (CfD) scheme. This is more than double the 5.8 GW capacity it awarded in the last round AR3 concluded in September 2019.
It is the 1st time since the CfD scheme was launched that solar PV is participating in the auction (see UK To Include Solar & Onshore Wind In CfD Auction Round 4). Along with solar PV, onshore and offshore wind, tidal and floating offshore wind projects will be allowed to compete for government subsidies for 15 years.
Close to 12 GW capacity due to be awarded under the subsidy scheme will be allocated under pot 1 comprising established technologies as onshore wind and solar PV; pot 2 of less established technologies as floating offshore wind, advanced conversion technologies (ACT), and tidal stream, while pot 3 includes offshore wind alone.
Between the 1st 3 auction rounds under CfD, the government has allocated 15.5 GW capacity through 49 renewable electricity projects. Now AR4 is set to be launched in late 2021.
Under its CfD scheme, the government enters into long term contracts with renewable energy generating companies selected through a competitive process through the Low Carbon Contracts Company (LCCC). Winning projects are selected basis lowest price offered.
"The UK is a world leader in clean energy, with over a third of our electricity now coming from renewables. That huge achievement is thanks to the government's Contracts for Difference scheme," said Energy Minister Kwasi Kwarteng. "The new plans set out today build on the Prime Minister's Ten Point Plan and put us firmly on the path towards building a new, green industrial revolution."
Welcoming the BEIS statement, the Solar Trade Association (STA) said the government should provide certainty that solar PV under pot 1 technologies will be eligible to compete in future allocation rounds as well.
"Today's announcement opens the door to significant numbers of subsidy-free solar projects being developed over the next few years. There is plenty of detail to dig into here, but the overall picture is a positive one. In particular we are pleased to see an extension of the delivery period and welcome the announcement of a call for evidence on support for renewables," stated STA Chief Executive Chris Hewett while pointing out that the UK has more than 3 GW projects in the planning pipeline standing ready for development.
The STA wants the government to commit to 40 GW cumulative solar capacity target for 2030 (see STA Calls For 40 GW Solar Target For UK By 2030).
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