The two PV projects that secured support under the contract for difference (CfD) scheme for the financial year 2015/16 will not go ahead.
The Low Carbon Contracts Company, administrator of the CfD scheme, confirmed that Wick Farm Solar Park and Royston Solar Farm – who both secured a strike price of £50/MWh for delivery year 2015/16 – will not proceed.
It was widely predicted that the projects would not be viable, given that the wholesale cost of electricity is set at the same level. Commenting on the development, Leonie Greene, head of external affairs at the Solar Trade Association, called the situation “a tragedy”. She explained: “This confirmation shows that what everyone in the industry was saying was right: the £50/MWh bids wouldn’t get built. That no large solar farms will be built in the next year under either the renewable obligation (RO) or CfDs is a tragedy, as we predicted these types of projects could be cheaper than gas in just three years with stable policy support.”
Support for solar projects over 5MW under the RO was withdrawn on 1 April 2015, with the government citing unexpected take up from solar causing budget limitations. In place of the RO the government introduced the CfD mechanism which saw solar compete with other ‘established’ technologies for funding. However, after the first allocation round just five projects secured a CfD. Today’s news means that only 38.67MW of PV capacity could be installed under the CfD.
Greene continued: “British solar SMEs are now having to rewrite their business plans, again. For an industry that is predicted to be the dominant global energy source by 2050, the UK’s rollercoaster policies are not helping its position. We hope that the new government looks at this technology with fresh eyes to develop a fairer and more sensible approach.”
In contrast, the final CfD register confirms that 100% of onshore wind projects which received a CfD will progress.