The Contracts for Difference results are in. Wind farms and solar farms are the first to receive financial support under the Coalition Government’s reformed renewable incentive scheme.
The Contracts for Difference scheme aims to support new investment in renewable and other forms of low carbon energy and is designed to stabilise pricing. Starting in April 2015, the scheme will run for 10 years with a budget of £15m. Low carbon generation projects are encouraged to apply for Contracts for Difference and compete in an auction to secure contracts. If successful they will receive financial support through the scheme for up to 15 years.
The first renewable energy contracts secured, amounting to more than £315m, could collectively produce over 2GW of new generation capacity, which is enough to power 1.4m homes.
Some technologies fared better than others
Unfortunately solar projects seemed to lose out to wind projects which were awarded considerably more contracts. Solar only won five contracts out of 27, whereas onshore wind projects won 15 contracts.
According to Renewable Energy Focus, ‘Contracts for Difference (CfD) were awarded to the following: two offshore wind farms (one in England and one in Scotland: East Anglia Phase 1, and Neart na Gaoithe, a total of 1162 MW capacity); fifteen onshore wind farms across England, Scotland and Wales, which equated to a total of 748.55 MW capacity; five solar projects ranging from 12 to 20 MW; a pair of combined heat and power projects accounting for nearly 100 MW; and a trio of “advanced conversion technologies” totaling 62 MW. The outcomes show that 2.1GW of capacity has been procured, at a total cost this round of £315million.’ (Source: DECC).
Solar industry disappointed
CEO of the Solar Trade Association, Paul Barwell expressed his disappointment about the results, “The results are disappointing for solar, but not surprising and come as more and more analyses shows that, as long as it is given stable support, solar could very soon be competitive with fossil fuels without subsidy. However, the UK utility solar industry is very young in the UK and it is almost — but not quite — ready to compete with technologies that have been established for over a decade.”
He also believes that, “Much more care needs to be taken by Government about where its energy policies are leaving solar power overall. This extraordinary technology has been the success story of the Coalition Government, but it is in danger of falling through the gaps in a policy framework too often designed for really big players deploying big technologies. Internationally, Governments are recognising and supporting solar’s vast global potential. Having come from nowhere on solar at the start of this Parliament the UK cannot afford to fall behind.”
Renewable energy supported by Greenpeace
Dr Doug Parr, Greenpeace Chief Scientist, shared his views on the results too, “Today’s announcements show renewables’ costs are plummeting, and will mount a growing challenge to conventional sources of power in delivering energy security for the UK. Those who say we should tackle climate change but are opposed to wind and solar farms need to explain how they plan to cut carbon emissions whilst keeping consumer bills as low as possible.”
“We’ve known onshore wind is much cheaper than nuclear for a while, but now we learn that solar power is already cheaper than new gas generation in some cases. It makes you wonder what could have been achieved with less party-political manoeuvring and more stable Government support for the clean technologies already being embraced by the world’s largest economies.”
The next Contracts for Difference auction will take place in autumn 2015.
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