Utility Week

6 | 13TH - 19TH MARCH 2020 | UTILITY WEEK News Inside story T he government's surprise proposal that onshore wind and solar will be allowed to compete in a contracts for difference (CfD) auction in 2021 has sparked much debate across the sector. The return of price support was broadly welcomed, with a view that it would unlock billions of pounds of investment, create many new jobs and allow the energy sys- tem to be decarbonised at the lowest cost to consumers. However, there have been calls for local authorities to do their part to stimulate the rollout. There are also concerns about whether the proposal to stop low-carbon generators from collecting CfD top-up payments during periods of negative power prices could inflate strike prices. Industry views are being welcomed as part of a con- sultation launched by the Department for Business, Energy and Industrial Strategy (BEIS), which will run until 22 May. Stalled growth Neither onshore wind nor solar projects, as part of the "Pot 1" of technologies, have been allowed to bid for CfDs since the first competitive auction in 2015 and growth has stalled in recent years following the closure of the Renewables Obligation and feed-in tariff (FIT) schemes to new applicants. From a high of 2,683MW in 2017, onshore wind installations fell for the second year running in 2019, to just 629MW. According to recent figures from the government's renew- able energy planning database, the pipe- line of shovel-ready onshore wind and solar projects has swollen to 4.6GW and 1.5GW respectively. The consultation also discusses BEIS's decision not to move offshore wind to Pot 1 or hold technology-neutral auctions. Meanwhile, it raises the possibility of introducing floating wind as a separate tech- nology class within Pot 2. Although its prior commitment to deliver 30GW of offshore wind by 2030 – since raised to 40GW in the Conservative election manifesto – could theoretically be delivered entirely with fixed-foundation turbines, BEIS said this may not work out in practice and floating turbines will likely be needed anyway to meet the UK's long-term emissions targets. Carving out a separate space for floating wind, which would be outbid if forced to compete against other off- shore wind, would allow costs to be brought down over the next decade before the tech- nology is rolled out at a larger scale during the 2030s. BEIS has additionally proposed to: • Prevent generators from collecting top- up payments during periods of negative pricing; • Extend the delivery years for the CfD scheme until 31 March 2030; • Exclude new coal-to-biomass conversions from future auctions; • Strengthen the delivery incentives; • Review the supply chain policy to ensure it supports the local economy; • Update the community benefits guidance for onshore wind to ensure commit- ments are honoured for the full life of a project and create opportunities for local communities to invest; • Address barriers to the co-location of storage with CfD projects; • Link the decommissioning regime for renewables into the CfD scheme; • Make a series of technical changes, including amending the formula for cal- culating the budgetary impact of contracts New wind direction for CfD auctions Persistent calls for the government to level the subsidy playing field for onshore wind and solar were finally answered last week. Tom Grimwood gauges reaction and assesses what such a rollout will require. From a high of 2,683MW in 2017, onshore wind installations fell for the second year running in 2019, to just 629MW

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