The UK Government has announced that £290m will be available in the second Contracts for Difference (CfD) auction for offshore wind and less established technologies. This announcement follows the Government’s commitment in the March 2016 Budget to allocate £730m over the course of the current Parliament for further CfD rounds.

The second auction will open in April 2017 and it is expected that a competitive auction will drive prices down further. There is no reference to capping offshore wind or ring fencing a pot for wave and tidal technologies. Furthermore, there is no reference to a capacity of lower than 5MW for Anaerobic Digestion (AD) despite lobbying.

The draft strike prices (£/MWh, 2012 prices) are as follows:

Technology

For projects deploying in 2021/22

For projects deploying in 2022/23

Offshore wind

105

100

Advanced Conversion Technology(with or without CHP)

125

115

Anaerobic Digestion (with or without CHP) (>5MW)

140

135

Dedicated Biomass with CHP

115

115

Wave

310

300

Tidal Stream

300

295

Final strike prices will be confirmed at least 10 days prior to the second round opening.

Fuelled and geothermal technologies Geothermal is subject to a consultation in order to determine the way in which geothermal technologies will be treated under the CFD scheme.

Similarly, fuelled technologies (sewage gas, landfill gas, energy from waste, advanced conversion technologies (ACT), anaerobic digestion, dedicated biomass with CHP and conversions of coal fuelled generation to biomass fuelled generation) are also being reviewed.

It has been reported that ACT capacity currently within the planning stages would not meet the Government’s wider objectives as the only output would be in the form of electricity as opposed to high quality syngas. BEIS is therefore considering whether it is using the correct definition for ACT as well as whether the CfD scheme is the correct support mechanism for such technologies.

Included as part of the call for evidence is the success of RHI (available until 2020) and CfD (for projects that commission from 2021) in supporting the decarbonisation of heat.

The future of biomass conversion is being considered further.

The call for evidence on fuelled and geothermal technologies in the CfD scheme closes on 20 December 2016 with the strike price for geothermal being published after this date.

Non-mainland onshore wind projects

A previous consultation relating to additional support for island renewables (Orkney, Shetland and the Western Isles) under the CfD scheme suggested that these locations contained a unique set of characteristics which could justify a different level of support when compared to mainland projects as well as potentially being classified as a less established technology.

The Government is now seeking views as to whether such projects should continue to be treated as onshore wind (its current position) and therefore not classified as a separate technology or permitted access to CfD round two. Responses to the consultation are due by 31 January 2017.