Five solar projects successful in CfD auction

  • Ed Davey

    Secretary of state for energy and climate change, Ed Davey. Image credit:Flickr/DECC

DECC has released the results of the contracts for difference (CfD) auction with just five solar projects, totalling less than 72MW, proving successful.

Solar projects over 5MW in size will no longer be eligible for the Renewable Obligation scheme from April this year, leaving the CfDs as the only available support mechanism.

The new competitive auction scheme divides renewable energy technologies into two pools – established and less established – with onshore wind and solar PV bidding for the same budget.

The news will be a relief to the successful firms. There had been fears that solar would not be able to match the prices that wind is able to offer leaving the sector empty-handed.

The switch to a competitive system for renewable energy support has been praised by the European Commission, which has expressed a desire to see all member states continue down this route. This week Germany opened bidding in its own renewable energy auction that allocated 150MW for solar.

Project name Developer MW Strike price (£/MWh) Delivery year
Wick Farm Solar Park Hadstone Energy  19.1 50 2015-16
Charity Farm Lightsource 14.67 79.23 2016-17
Royston Solar Farm Royston Solar Farm Ltd 13.78 50 2015-16
Netley Landfill Solar REG Netley Solar 12 79.23 2016-17
Triangle Farm Solar Park Cambridgeshire County Council 12 79.23 2016-17

The full results across all technologies are available here.

“This world leading auction has delivered contracts for renewables projects right across the UK,” said Ed Davey, secretary of state for energy and climate change. “These projects could power 1.4 million homes, create thousands of green jobs and give a massive boost to home-grown energy while reducing our reliance on volatile foreign markets,” he added.

“The auction has driven down prices and secured the best possible deal for this new clean, green energy.”

According to DECC, the completive nature of the auctions mean as much as 550MW of additional capacity can be funded.

That will be scant consolation to the large-scale solar sector which will see just two projects over 5MW installed in 2015/2016.

The selected solar projects matched or bettered the prices proposed by onshore wind projects and offered the greater saving on the administrative strike price of £120/MWh put in place by DECC. Onshore wind has an administrative strike price of £95/MWh.

Ray Noble, solar consultant to the Renewable Energy Association (REA) welcomed the fact that solar had shown it could compete.

“No one knows how many projects were submitted of each technology so it is difficult to analyse but it looks like solar is giving a warning to the others for Round 2 with the lowest strike price of £50,” he said.
 
Doubts are already being raised about the possibility of £50/MWh solar being viable in the UK with the Solar Trade Association (STA) saying it would be "amazed" if those projects could be built. 
 
"As we warned, solar has only been able to win a tiny amount of CfD contracts. This is very disappointing," said STA CEO Paul Barwell. "The soon-to-be-cheapest and most popular renewable – solar power – has lost out in a complex auction that really suits big players. We are expecting a considerable drop in the solar market this year. It's really important that changes are made to the next round of CfD auctioning in October to ensure SMEs can compete – and that energy policy generally takes better care of the UK solar industry. We're not asking for special treatment, just a more level playing field."
 
A director of winning bidder Hadstone Energy has indicated on social media that they may not proceed with the contract. James Rowe told Solar Power Portal that no final decision had yet been taken by the company.

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