Industry has welcomed the core parameters set by the UK government for the upcoming Allocation Round 7 Contracts for Difference round.
Energy department DESNZ yesterday published key details of the auction rules ahead of next month’s application window, including a boost to the Administrative Strike Prices for wind technologies.
RenewableUK executive director of policy and engagement Ana Musat said she is pleased to see parameters that are “more reflective of market realities than in previous years”.
“Whilst wind energy projects haven’t been immune to the inflation and supply chain pressures facing all major infrastructure projects, they remain cheaper than other forms of electricity generation such as new nuclear and new gas plants, so they offer the best value for money for billpayers.
“It is also worth noting that, due to competition in auctions, strike prices are likely to end up being lower than these maximum Administrative Strike Prices set out by the government, which act as a consumer backstop.
“As well as the more realistic Administrative Strike Prices and load factors, we welcome the introduction of a separate pot for floating wind in this auction.
“With the UK in a race to lead the world in developing floating wind components and expertise, it’s vital that we unlock investment in more test and demonstration projects as soon as possible, as this will enable us to scale up this innovative technology faster.”
Musat urged the UK government to work closely with industry to provide “clear strategic direction” on how a suite of reforms running in parallel with the AR7 auction – including connections reform and the Strategic Spatial Energy Plan – will be aligned.
Scottish Renewables chief executive Claire Mack (pictured) said the CfD parameters are a “promising step forward to build much needed momentum behind Scotland’s impressive pipeline of clean energy projects”.
Mack welcomed the introduction of a separate clearing price for fixed-bottom offshore wind projects in Scotland that she said will help capture economic opportunities in the country and deliver better value for consumers.
“An ambitious budget will be needed to ensure this year’s full potential can be maximised,” she added.
“Next steps must also include the design of an enduring solution to transmission charging, as part of wider strategic planning of our energy system, to create the fairer system we need.
“It is right the scheme continues to evolve so that it can respond to the inflation and supply chain pressures facing all major infrastructure projects. We continue to encourage the UK government to engage closely with industry on future design of the scheme.”