CfD round in April as coal phaseout takes shape: onshore wind excluded

The government has published a long-awaited suite of announcements on plans for a new Contract for Difference allocation round, whether there is justification for supporting onshore wind in Scottish islands, and the future of coal-fired generation.

BEIS said an allocation round for Contracts for Difference would open in April 2017 for “less established technologies” and set out administrative strike prices for projects starting up in 2021/22 or 2022/23. They are offshore wind (£105/MWh in 2021/11, £100/MWh in 2022/23), Advanced Conversion Technologies (£125/MWh, £115/MWh), Anaerobic Digestion (>5W, £140/MWh, £135/MWh), biomass with Combined Heat and Power (£115/MWh for either year), wave (£310/MWh, £300/MWh), tidal stream (£300/MWh, £295/MWh) and geothermal projects (for which it has sought evidence in administrative prices).

The budget available is £280 million per year. The government reaffirmed a budget of £730 million over the current parliament, a decision highlighted by secretary of state Greg Clark. He told EnergyUK’s annual meeting “we have committed to funding over the rest of this parliament and that’s an important decision to make”.

National Grid as EMR Delivery Body, the Low Carbon Contracts Company (LCCC) and the Department for Business, Energy and Industrial Strategy (BEIS) are co-hosting an ‘Introduction to CFD Allocation Round’ event on 1 December in London. Places are limited to two per company, contact box.emr.cfd@nationalgrid.com for more details.

Consulting on ‘non-mainland onshore wind projects ‘ (ie those on Scottish islands), BEIS said it “considers it necessary to examine whether there is a sufficient case to differentiate non-mainland GB onshore wind projects from onshore wind projects more generally.” In a very short consultation it asked for “any new evidence or justification” for treating non-mainland GB onshore wind projects as distinct from onshore wind generally.

It said, “If you have set out any specific challenges for non-mainland GB onshore wind projects, do you consider there to be other measures outside of the CFD scheme that could be adopted by the government, or others, to remedy those challenges?” That consultation closes on 31 January.

The consultation on coal-fired generation is open until 7 February. BEIS said of the remaining 13GW of coal generation, “While we know that existing coal power stations will close, projections for the rate and timing of closures are highly uncertain and dependent on a range of factors that are difficult to forecast. Uncertainty about when the remaining coal stations will close creates uncertainty for those considering investing in new flexible replacement capacity, such as new gas generation.” The consultation offers several options for applying existing emissions legislation so unabated coal could not operate after 2025. BEIS wants to know how to apply limits so they do not affect peaking plant that has high emissions over a short period.

 

 

 

 

 

The industry is still waiting for other announcements from BEIS, notably a promised consultation on valuing flexibility in the electricity system.

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