Renewable energy developers pass Contracts for Difference subsidy milestone

The Low Carbon Contracts Company (LCCC) has confirmed that all 39 Contracts for Difference (CfD) renewable projects in the UK have past their delivery milestone requirements as part of the second round of CfD funding.

The 39 CfD projects and the related investment contracts currently managed by the LCCC offer a combined 6GW capacity of electricity provided from a range of sustainable technologies including; offshore wind, onshore wind, biomass conversion, biomass with CHP, solar, energy from waste and advanced conversion technology.

In an announcement on Friday (19 August), chief executive of LCCC Neil McDermott said: “This is an important milestone for LCCC and demonstrates that the full CFD process is in place and operating. We look forward to our other CFD projects also starting to generate electricity in the months and years to come.”

CfD history

The CfD contracts are the Government’s main initiative established to subsidise green energy projects by offering the energy generators to compete with each other to win subsidy contracts – the contracts guarantees payments to the generators in the event of a market shortfall. The contract is established between the energy generator and the LCCC – a government-owned company.

The first round of CfDs took place in February last year, with the first batch of sustainable energy projects receiving more than £315m – a figure initially criticised by green industry insiders as being “relatively small”.

The first of the CfD projects from round one is now generating electricity and the initial payments have been made by the LCCC to the generators – energy producers Lightsource SPV136 Limited, for its Charity Farm solar project.

Charity farm is a solar PV station in Shropshire that generates 11.94MW of electricity through its 54,349 PV modules. The solar farm will produce enough energy to generate power for 4,000 homes, saving 6,476 tonnes of carbon emissions is yearly – the equivalent of taking 1,439 cars off the road.

Following the first wave of auctions, DECC initially postponed the second wave of the CfD scheme with no public reason given in July last year, leading to speculation on the reasoning for the delay.

Alex Baldwin

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