- BEIS has launched AR4 of the UK’s CfD scheme with 12 GW renewable energy capacity sought
- Solar PV gets to compete against onshore wind and hydro for £10 million funding under pot 1 out of the 3 pots under the tender
- Maximum capacity limit of 3.5 GW has been imposed on both onshore wind and solar PV
The Department for Business, Energy & Industrial Strategy (BEIS) of the UK government has officially launched the 4th allocation round (AR4) of the country’s Contracts for Difference (CfD) scheme. It aims to contract 12 GW of low-carbon electricity with the help of £285 million ($377 million) annual funding.
What makes this round special is not just that it looks for more capacity than the last 3 rounds of CfD combined, but because it is the 1st time that solar PV has been included in the participating technologies since 2015. Other technologies that solar will compete in this round include offshore wind, onshore wind, tidal and floating offshore wind projects and the like.
While of the £285 million, £200 million ($264 million) has been reserved for offshore wind and £75 million ($99 million) for remote island wind, tidal stream and floating offshore wind, only £10 million ($13 million) has been set aside for solar, onshore wind and hydro power. Winning projects will enter into 15-year energy agreements with the government’s own Low Carbon Contracts Company (LCCC).
“Onshore wind and solar are competing in an allocation round for the first time since 2015, and the government is seeking significant capacity from these technologies which will help us achieve the required levels of deployment in line with meeting climate change targets,” stated BEIS.
The CEO of UK’s renewable energy trade association RenewableUK, Dan McGrail estimates this round to attract more than 23 GW of renewable capacity with more than 16 GW coming from wind energy.
Nonetheless, the government has 5 GW cap for ‘established technologies’ of onshore wind, solar and hydro under pot 1. Maximum capacity limit of 3.5 GW has been imposed on both onshore wind and solar PV.
Last date to submit applications is January 14, 2022 with final results to be announced in spring-summer 2022, according to the BEIS.
In the previous 3 rounds, the government has contracted around 13 GW of offshore wind and around 16 GW of new renewable electricity capacity across all technologies in 58 projects.
Back in September 2021, BEIS announced £265 million support for CfD AR4 under draft allocation framework (see UK’s £265 Million Funding For CFD Round 4).