UK energy department BEIS has urged companies with Contracts for Difference (CfD) to “act fairly” as some look to delay triggering the mechanism amid soaring wholesale power prices.
An Ocean Winds-led consortium has put back its start date for initiating its 15-year CfD contract for Moray East until 31 March 2023, despite the wind farm completing commissioning last month.
This will allow it to take advantage of the record power prices seen in the UK at present. The average wholesale price currently stands at around £170/MWh and has been even higher in recent weeks.
The wind farm is currently entitled to £73.71/MWh for the energy it produces under the CfD regime, but once triggered the sponsors would also be forced to share any upside with the UK taxpayer should the wholesale market price remain above this threshold.
The Moray East decision is in keeping with the rules of the CfD regime, which allows developers to delay initiating contracts as long as the start date falls within the target commissioning window.
A BEIS spokesperson said: “The Contracts for Difference scheme has been hugely successful in boosting UK energy supply and reducing our dependence on volatile fossil fuels, while also cutting costs for consumers, reducing the price of offshore wind by around 65% since 2015.
“Projects will not receive Contracts for Difference payments while they are generating on market terms. We urge companies to act fairly on this matter, recognising the public support they have received for development.”
An Ocean Winds spokesman added: “Moray East is proceeding according to plan within the terms set by the CfD process.”