United Kingdom

United Kingdom

UK extends CfD delivery period beyond 2020

UK: The contract for difference (CfDs) support system is to be made available for periods beyond 2020, removing a key barrier to long-term low carbon investment.

Dong Energy's Burbo Bank Extension will receive CfD support
Dong Energy's Burbo Bank Extension will receive CfD support

The delivery period will be extended from 31 March 2020 to 31 March 2026. The move follows a five-week consultation in July that attracted strong support.

All respondents agreed on the need to extend the delivery period so that future CfD auctions can take place. But a majority considered delivery years for the next allocation round "should be limited to 2021/22 and/or 2022/23".

Even so, the Department for Business, Energy and Industrial Strateg has decided to implement its original proposed amendment which permits delivery years up to 2025/26 "but does not specify the delivery years to which any future allocation round will relate". This, it said "allows the option for future allocation rounds to be run".

Up to £730 million (€869 million) was made available by the government in March to support 4GW of offshore wind and other less-established renewable technologies by 2020.

The consultation drew comments on the need for clarity on CfD timetabling, technological eligibility and budget volumes, and for the need in variations of lead-in times for less-established technologies to be taken into account in designing the CfD regime.

Others raised the potential for including the whole electricity system cost of technologies within the regime, a CfD for use in projects outside the UK, inclusion of remote island offshore wind and the environmental impacts of deep water offshore renewables.

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