The government announced on 30 July that the budget for the sixth auction round (AR6) of the Contracts for Difference (CfD) scheme will see a £500 million increase, reaching £1.5 billion.
It is the largest ever budget for the scheme and includes £1.1 billion for offshore wind, assigning it more budget than in all of the previous auction rounds combined. Ed Miliband, the Energy Secretary, called the previous auction round (AR5) a “catastrophe”, because no offshore wind was awarded a contract.
The AR5 funding round – which admittedly had just £227 million funding – saw 56 ground-mounted solar projects win backing, securing almost 2GW of capacity out of a total 3.7GW.
AR6’s budget includes an increase of £65 million for onshore wind and solar, bringing the total available up to £185 million for those technologies, but all could end up going to solar. There is £270 million available for emerging technologies such as floating offshore wind and tidal, an uplift of £165 million.
With a budget seven times higher than AR5, Energy Minister Michael Shanks said the budget increase will boost industry confidence.
Miliband said: “We are backing industry to build in Britain, with this year’s auction getting its biggest budget yet. This will restore the UK as a global leader for green technologies and deliver the infrastructure we need to boost our energy independence, protect billpayers, and become a clean energy superpower.”
The strike price for solar PV will increase 30% from £47 per megawatt hour (MWh) to £61/MWh. When it was set, it was hoped that the increased strike price would be more sustainable and economically viable for future solar projects.
When the previous government announced the CfD AR6 budget of just over £1 billion, Gemma Grimes, director of policy and delivery at Solar Energy UK expressed her disappointment that the budget was “virtually nude of anything to bolster one of the UK’s fastest growing sectors: solar power.”
The solar sector has had a positive month, with development consent orders (DCOs) granted for three nationally significant infrastructure projects (NSIPs) followed by proposed changes to the planning rules for solar projects that Solar Energy UK said bring clarity for developers.
Beyond large-scale solar PV, the Labour government has promised to “unleash a solar rooftop revolution”. Ministers are looking to bring in solar-related standards for new-build properties from as soon as next year.
Miliband said: “We will encourage builders and homeowners in whatever way we can to deliver this win-win technology to millions of addresses in the UK so people can provide their own electricity, cut their bills and at the same time help fight climate change.”
