The Department of Energy and Climate Change (DECC) is considering opening up the contracts for difference mechanism (CfD) to projects located outside the UK.

DECC is looking at importing renewable energy into the UK through CfD projects after initially proposing the idea back in 2012 during the initial EMR plans.

The government is exploring the possibility as a result of the EU Renewable Energy Directive which created cooperation mechanisms for member states. Particularly, DECC says that non-UK projects could be used as “a contingency option to help the UK meet its renewables target”.

DECC states that “given the number of challenges and complexities that setting up a non-UK CfD policy will raise, the government cannot commit to specific timelines”. However, the department estimates that non-UK projects will not have access to CfDs until “2018 at the earliest”.

DECC also states that another constraint facing the timetable for opening up the CfD is the amount of budget available under the levy control framework.

Allowing renewable developers to access UK support for projects outside the UK would be a European first, as a result DECC anticipates encountering a number of complex issues surrounding its implementation.   

In order to be eligible for non-UK CfDs a project will have to be an eligible renewable electricity generation facility that is located outside the UK territory and exports its generation to the GB electricity system