UK outlines £580m CfD budget plans

The UK Government has outlined plans for £580 million of funding for its Contracts for Difference (CfD) scheme. As part of the auction, low carbon electricity generators are incentivised for […]

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By Priyanka Shrestha

The UK Government has outlined plans for £580 million of funding for its Contracts for Difference (CfD) scheme.

As part of the auction, low carbon electricity generators are incentivised for the power they produce.

The application process for £290 million of annual funding will open in April 2017 for projects to be delivered in 2021/22 or 2022/23.

The second CfD allocation round will support “less established” technologies, including offshore wind, anaerobic digestion (AD) with or without CHP, biomass with CHP, advanced conversion technologies with or without CHP, wave, tidal and geothermal energy.

The draft strike prices for delivery in 2021/22 per megawatt hour are £105 for offshore wind, £125 for advanced conversion technologies, 140 for AD, £115 for biomass, £310 for wave and £300 for tidal.

For delivery in 2022/23, the strike prices per megawatt hour are £100 for offshore wind, £115 for advanced conversion technologies and £135 for AD plants.

For biomass, it is £115, £300 for wave and £295 for tidal power.

A price for geothermal projects will be set out following a consultation.

A maximum of 150MW – equivalent to a budget of £70 million – will be applied to “fuelled” biomass technologies.

The Department for Business, Energy and Industrial Strategy (BEIS) expects the second CfD auction to result in enough renewable electricity to power around one million homes and cut emissions by 2.5 million tonnes a year from 2021/22 onwards.

Business and Energy Secretary Greg Clark said: “We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.

“This is a key part of our upcoming Industrial Strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”

Support for remote island wind projects have been left out as BEIS is seeking views on “whether they should be treated differently to onshore wind projects more generally”.