More than 2GW of solar has won contracts in the UK’s latest renewables auction clearing at a strike price of £53.40/MWh (US$64.19/MWh).
The country’s Department for Business, Energy and Industrial Strategy (BEIS) confirmed today the results of the fourth allocation round (AR4) of the UK’s Contracts for Difference scheme, revealing a total of 66 solar projects totalling 2.2GW had secured contracts.
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The auction’s results confirmed the winning strike price for solar to be £45.99/MWh (US$55.30/MWh), however the auction’s prices are based on pricing in 2012 which, when taking into account inflation, mean projects will be paid £53.40/MWh – or £0.0534/kWh – for the ten-year duration of the contract.
Of those contracts, five are to begin generating power within the 2023/24 financial year, with the rest set to come on stream in 2024/25.
The solar projects contracted capacities range in capacity from 6MW to 112MW. The 112MW contract awarded is for Cleve Hill, a project with a planned capacity of around 350MW that, when complete, will become the country’s largest solar farm.
Chris Hewett, chief executive at national trade body Solar Energy UK, said the auction results cemented solar as a “major part of the solution to Britain’s energy crisis”.
“Solar and wind are now undeniably the cheapest, as well as the cleanest, way to power the country,” he said.
Developer JBM Solar was the biggest winner, securing 320MW of contracts, while other notable winners include utility ScottishPower and Lightsource bp, which secured 288MW and 130MW respectively.
Finlay Colville, head of market research at PV Tech publisher Solar Media, described the auction results as a “massive positive for the UK industry”.
“The results probably far exceed anyone’s expectations, and will offer a number of developers and investors security to go ahead with build over the next few years. And the risk free proposition of the winners in the CfD auction will also provide a buffer for some of the other projects under development that require more work and an alternative means of financing through PPAs,” he said.
In total and across all technologies, CfD AR4 will support 11GW of renewables coming onstream in the UK, with offshore wind securing the bulk – some 7GW – of capacity at a price of £37.35/MWh (£43.37/MWh including inflation).