The solar industry has proven that it can compete in the contracts for difference (CfDs) scheme, a senior official from the Department of Energy and Climate Change (DECC) has said.
The competitive auction that pitted solar projects against onshore wind proposals released its results last month with five PV sites selected. Of the five two are at uneconomic prices, one is led by a county council and another has no grid connection fees.
Richard Cave, head of solar PV and hydro at the department, told the Solar Finance and Investment Conference in London that DECC was reviewing the outcome of the auction but was satisfied with the results.
“Actually, I know people are not particularly going to like this but from our perspective the outcome the CfD auction was pretty good,” he said.
When delegates were asked to raise their hands if they thought the results of the auction were good for solar, only two people – in a room of more than 200 – did so. Cave suggested the size of the budget allocated for solar, onshore wind and other established technology, was perhaps the root of their unhappiness, rather than the functioning of the process.
“The problem, if indeed it is a problem, that you're concerned about is actually the size of the pot, and obviously we had criticism of that back when it was set. But within the context of the size of the pot, solar was able to compete. I know people think there wasn't enough [winning solar projects] but that in many respects is a factor of the size of the budget – we all have to stick within budgets these days don't we?”
Tweaks to the CfD process are under way with a consultation already launched by DECC and a review planned ahead of the next auction round.
John Perkins, CfD manager, National Grid played down the extent of potential changes describing them as “tidy-ups”.
“The biggest, single thing that could be done [to increase the CfD’s impact] is budget but part of the Electricity Market Reform's work is to protect consumers and there are implications of increasing the budget,” said Perkins. “You could do something about the technology specific things, with the technology specific pots, but DECC’s hands are tied to an extent by the EU state aid rules.”
