UK’s £265 Million Funding For CFD Round 4

• BEIS has released draft Allocation Framework for round 4 of its CfD regime, as part of its flagship renewable energy scheme
• Solar PV is to compete against onshore wind and hydropower under pot 2 that has a capacity limit of 5 GW
• This capacity can be developed across Great Britain, especially Scotland and Wales
• Lion's share of the financial support of £265 million is reserved for offshore wind under pot 3

The UK's Department for Business, Energy & Industrial Strategy (BEIS) has come out with guidelines for allocation round 4 (AR4) of its contracts for difference (CfD) scheme, calling it the 'biggest-ever' round of its flagship renewable energy scheme. There is a total of £265 million set aside as the budget for this round to be won by winning projects.

In a draft Allocation Framework released, the department has laid down rules for AR4 and eligibility requirements.

This financial support will be shelled out to eligible technologies in 3 separate categories or pots. Solar PV is to compete against onshore wind and hydropower under pot 1 of Established Technologies, with a total of 5 GW capacity on offer with a £10 million budget.

There is a maximum capacity limit on 3.5 GW onshore wind and solar PV projects, and these can come up in all parts of Great Britain, especially Scotland and Wales.

Pot 2 is open to Less-Established Technologies including floating offshore wind, tidal stream, geothermal and wave with a budget of £55 million. Pot 3 is reserved for offshore wind with a lion's share of £200 million as the government aims to achieve 40 GW of installed capacity for this technology by 2030.

Winning projects will win 15-year contracts with the government owned Low Carbon Contracts Company (LCCC). Lowest price bids are adjudged successful.

The BEIS specified that final levels of support and capacity could be higher and will be announced ahead of the round opening in December 2021.

"The new plans set out today deliver on the Prime Minister's Ten Point Plan and will support the next generation of renewable electricity projects needed to power our homes and meet our world-leading climate change targets," said UK's Energy Minister Anne-Marie Trevelyan.

In November 2020, BEIS had said it plans to award 12 GW renewable energy capacity under allocation round 4 (see 12 GW Renewables Capacity For UK's CfD Round 4 Auction).