Utility Week

4 | 1st - 7th August 2014 | utILItY WEEK Contracts for Difference pots 1 and 2: what are the technologies? Budget for CfDs the government has announced its Contracts for Difference (CfD) funding allocation plans out to 2020/21 in line with the Levy Control Framework. £200m the amount budgeted for CfD allocation per year until 2020/21 £50m per year for established technologies (pot 1) £155m per year for less established technologies (pot 2) £1bn the amount reserved for additional projects up to 2020/21 £0 the amount currently allocated to biomass projects up to 2020/21 Pot 1 Onshore wind, PV, energy from waste with combined heat and power (CHP), 5-50MW hydropower, and landfill and sewage gas Pot 2 Offshore wind, wave and tidal, advanced conversion, anaerobic digestion, dedicated biomass with CHP and geothermal story By NUMBErs T he European Commission on 23 July approved the UK's plans to subsidise renewable energy generation through its Contracts for Differ- ence (CfD) regime. A statement from the Com- mission said it has concluded that the CfD regime "promotes the generation of electricity from renewable sources and is in line with EU state aid rules". Commission vice-president in charge of competition policy, Joaquin Almunia, said: "It is a fine example of how to promote the decarbonisation of the economy with market-based support mechanisms, at the low- est possible cost for consumers." In addition, the Commission approved the UK's plans for five fast-track FID (final investment decision) enabling contracts for offshore wind projects totalling more than 3GW of capacity and worth £9.7 billion. "The Walney, Dudgeon, Hornsea, Burbo Bank and Beatrice windfarms together will provide 3.3 per cent of the UK electricity generation capacity, which should help the UK meet its 2020 renewable target and reduce greenhouse gas emis- sions," the European Commis- sion said in a statement. Notably, the Commission did not approve the same 'fast track' contract for biomass conversions, which Utility Week understands will be dealt with as a separate submission. UK energy secretary Ed Davey welcomed the Commis- sion's decision, saying it shows that the UK's Electricity Market Reform (EMR) plans are "urgent and needed to turn around the historic neglect of the sector". The CfD scheme forms a central part of EMR, which seeks to secure the country's power supply while decarbonising the energy sector, at the lowest cost to the consumer. Plan for renewables CfD gets European approval "Government is stacking the deck against solar, the most popular form of local energy, by starving the industry of resources" Leonie Greene, head of external affairs at the Solar Trade Association, responding to the draft budget for CfDs out to 2020/21. She said the amount of support provided in the budget for expensive offshore wind was an "absurd decision" 30% government has committed to ensuring that at least 30% of the uK's energy comes from renewable sources by 2020 and CfDs are a key part of its strategy to achieve this A move away from the Renewables Obligation towards a Contracts for Difference (CfD) regime could encourage more direct power purchasing agreements (PPAs) between large firms and energy generators, said Dr Gordon Edge, director of policy at Renewable UK. In the US, internet giant Google pioneered such partnerships, with other firms including Microsoft and Walmart following suit. Edge believes CfDs will make it easier for the UK to offer similar agreements and that this could accelerate the realisation of renewables plans as well as bring- ing fixed-price benefits to energy- intensive users. CfDs could open way for large PPAs EnErgY CfD special...

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