CFD 2017 ALLOCATION ROUND

After a long period of speculation the Department for Business, Energy and Industrial Strategy (BEIS) has finally published the draft Budget Notice for the second Contracts for Difference (CfD) Allocation Round.

The second round will open on 3 April 2017 to Pot 2 (“less established”) technologies which covers Offshore Wind, Advanced Conversion Technologies (with or without CHP), Anaerobic Digestion (with or without CHP), Dedicated biomass with CHP, Wave, Tidal and Geothermal.

DBEIS intends to release £290m (per year) for projects commissioning in 2021/22 and a further £290 million (per year) for projects commissioning in 2022/23.  However, it is important to note that this is only a draft budget and the final figures may vary.  The final budget will  be confirmed no later than 10 working days before commencement of the April allocation round.

Draft administrative strike prices have been set for all technologies, except Geothermal, the strike price for which will be set subject to the findings of a current call for evidence.

 The strike prices have been set to enable the cheapest 19% of projects within each technology to compete, and there will be competition since the budget means that there will be more potential projects than budget and an auction process will be triggered as occurred in the first allocation round. 

Unlike the first allocation round no minima will be applied but a cumulative maxima of 150 MW (equivalent to a budget maxima of £70m) has been set for the support offered for fuelled technologies (Dedicated Biomass with CHP, Advanced Conversion Technologies and Anaerobic Digestion).