Government proposes tweak to CfD auctions for old onshore windfarms

The Government is considering rethinking its approach to clean power contracts under its  Contracts for Difference (CfD) scheme, which could enable existing onshore wind projects nearing the end of their operational life to secure new contracts.

Government proposes tweak to CfD auctions for old onshore windfarms

The Department for Energy Security and Net Zero (DESNZ) has launched a new eight-week consultation exploring the CfD scheme in a bid to improve clean energy access to contracts.

The long-running CfD could become easier for existing, older renewable projects to navigate thanks to the latest consultation. Ministers are proposing that onshore projects nearing the end of their operational running lives should be allowed to take part in the Allocation Round Seven (AR7) contract auction round, scheduled for next year.

Under the proposal, developers could be able to secure 15-year contracts with guaranteed power prices. Older projects would have to meet a set of stipulations, such as reaching the end of their operating lives before the auction and that they are not accessing any other subsidies. Ministers also believe that they will need to maintain their existing power capacity for the duration of the contract they receive.

The AR7 consultation is also looking at expanding CfD for floating offshore wind projects and introducing better metering so that successful projects under the CfD can co-locate with other assets.

Onshore estimates

In the consultation documents, the Government states that between 0.5-1GW of low carbon capacity annually will reach the end of its expected operational lifetime by 2030, as such 2.2GW of onshore wind will reach end of life between 2031 and 2035.

The Government also states that 140-174 GW of renewable capacity is required to meet future carbon budgets.

In last Autumn’s previous CfD auction, a total of 95 clean energy projects had their bids accepted, with onshore wind and solar accounting for the majority of the funding allocation.

Last year, the Government unveiled a new package to streamline planning rules in a bid to unlock more onshore wind development.

Councils will no longer need to identify areas for development through their local plans, then subsequently make changes to these plans and wait for the updates to be signed off. The Government has set out several new pathways, including Local Development Orders and Community Right to Build Orders.

Since that announcement, however, the Observer revealed that no new applications have been made for onshore wind farms in England.

Green groups warned at the time that the changes were not wide-reaching enough to reverse a de facto ban in place for more than six years.

Green groups have been warning for the last three years that the UK must more than double onshore wind capacity by 2030 to meet the Climate Change Committee’s Sixth Carbon Budget, which requires the UK to reduce net emissions by 78% by 2035 against a 2019 baseline.

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