CBI responds to BEIS consultation on amendments to the Contracts for Difference scheme (AR4)

These auctions provide the main route to market for a range of renewable power technologies in the UK. The consultation proposed a series of amendments to the CfD scheme which the CBI responded to in May.

Following around 18 months of positive announcements around renewable power in the UK, from confirmation that CfD auctions would run every other year from 2019 onwards, to the announcement that onshore wind can finally compete again in the auctions, the CBI was keen to respond to the latest consultation to ensure the scheme remains fit for purpose and importantly, fairly open to all technologies.

Via consultation responses, direct correspondence with HMG and during bilateral meeting, the CBI has taken a consistent and strong view that the CfD auctions are currently the best way of providing a route to market for various different forms of renewable power, from offshore wind to solar. As competitive auctions, businesses and customers can rest assured that the lowest cost technologies come forward to win contracts. As the auctions are primarily focused on deploying renewable power at scale, the CfD scheme also contributes heavily to our long-term emissions reduction targets.

The consultation posed questions on an array of reforms including auction design and pot structure, inclusion of floating offshore wind for the first time, delivery years and negative pricing amongst other things.

The CBI responded making several key points:

• The CfD auctions must remain open to all renewable power technologies, including floating offshore wind
• A third Pot should be introduced for offshore wind as this technology continues to grow at scale compared to other competing technologies
• Any change to the scheme should not negatively impact the ability of future solutions and technologies to thrive (such as BECCS)
• Extension of delivery years specified in the CfD regulations to the 31 March 2030 is welcomed
• The timescale for the Milestone Delivery Date requirement is creased to 18 months for on and offshore wind and remote island wind.

We await the government’s response to this consultation which we can expect relatively soon, as changes will need to be made ahead of the next auction round, taking place in 2021.