RenewableUK recommends CfD reforms

Industry group RenewableUK today published a report that sets out proposed reforms to the UK government’s contracts for difference (CfD) scheme, the country’s main mechanism for supporting new renewable energy projects.

The organisation said that since its establishment in 2014, the scheme has been very successful, with the latest auction last week securing 9.6 GW of renewable energy capacity across 131 projects. However, ambitious subsequent auctions will be needed to achieve the government’s clean energy objectives, it added.

Its report, Revitalising the Contracts for Difference Scheme, outlines five actions to help boost deployment. RenewableUK calls for more market-reflective auction parameter assumptions, including realistic reference prices and load factors. It also calls on the government to provide long-term certainty to developers and the supply chain by setting specific targets for each technology in future auctions. Further suggestions include extending the length of CfD contracts from 15 to 20 years and offering more flexibility on the year in which developers can deliver their projects. In addition, it urges progress on the ongoing CfD reforms outlined in the government’s Allocation Round 7 and future allocation rounds consultation.

RenewableUK’s chief executive Dan McGrail said several of the recommendations can be implemented without significant legislative reform in time for the next auction in 2025.

“The new government has set ambitious targets for renewable energy, extending across fixed bottom and floating offshore wind, onshore wind, and solar PV. The industry is ready to work with government to achieve these, and the reforms set out in this new report outline practical steps to provide long-term assurance to developers and the supply chain, whilst building on returning investor confidence following this year’s encouraging auction results,” McGrail commented.

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