Solar CfD auction faces serious delays due to appeals process

Developers interested in submitting bids for the auction-based Contracts for Difference (CfD) might have to wait until February to submit their sealed bids due to the scheme’s appeal process.

CfD applications opened on 16 October and closed on the 30 October. As part of the application process National Grid has identified that at least one applicant was not eligible to qualify for a CfD based on the criteria supplied by the Department of Energy and Climate Change (DECC).

However, the applicant or applicants have now disputed the National Grid’s decision, delaying the whole CfD process. If, after review, National Grid upholds the decision those contesting it can submit a Qualification Appeal to Ofgem, further delaying the submission of sealed bids.

DECC notes that “under a CfD allocation process with no disputes” it would have anticipated sealed bids to be submitted in December” with the final decision announced before the end of the year, and contracts awarded in January. DECC’s published timeline was based on the shortest possible timeframe for the CfDs but the department did note that potential appeals could delay the potential CfD timeline.

However, the latest development will delay the allocation of funds. The Solar Trade Association notes that if no Qualification Appeals are lodged to Ofgem, sealed bids will begin on 5-9 January, 2015. However, the STA said that it is likely that the decisions will be appealed to Ofgem. In this case the window for sealed bid submissions would fall back to 18-24 February 2015, with successful bidders not notified until 19 March, 2015.

DECC does note that the secretary of state, Ed Davey, has the power to begin the allocation process before all appeals are resolved.

Below is a table of various outcomes based on different appeal outcomes:

Source: The Solar Trade Association/The National Grid