UK large-scale solar to compete with other ‘established’ renewables for support

Facebook
Twitter
LinkedIn
Reddit
Email

The UK’s department of energy and climate change (DECC) wants ‘established’ renewables to compete against each other for support under its upcoming contracts for difference (CfD) regime.

The CfD regime has been designed to supersede the Renewable Obligation to fund large-scale renewable projects and will be introduced in 2014.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

The UK government’s Consultation on Competitive Allocation outlines plans to allocate the CfD budget between “established” technologies and “less established” technologies.

Under the new proposals, established technologies will have to submit a bid representing the lowest strike price per megawatt hour that they would be willing to accept. Those technologies with the lowest bids will then be allocated CfDs first, continuing with the next cheapest until the budget allocated to the group has been exhausted.

DECC has identified onshore wind (>5MW), solar PV (>5MW), energy from waste with CHP, hydro (>5MW and <50MW), landfill and sewage gas as established technologies.

The department notes that PV is currently more expensive than other technologies listed as established, but believes that module costs will continue to fall significantly for the remainder of the decade making PV competitive – although DECC states that PV’s cost reduction will be “largely driven by large-scale deployment in global markets (notably India, China and the US) rather than UK deployment”.

The move to a reverse auction system follows recent EU guidelines on renewables support, which called for a move towards lowest-cost-wins auctions in order to “expose renewable energy producers to market prices”.

The UK’s Renewable Energy Association’s chief executive, Dr Nina Skorupska, commented: “The transition to auctions acknowledges and could accelerate the cost reductions of the more established technologies, which is good news for industry and rate payers alike. But if it is rushed it will undermine investment, so we are glad to see government has listened to our concerns and will consult industry before reaching a decision.”

However, the renewables sector still has serious reservations about the current route to market for independent generators under the UK’s Electricity Market Reform.

DECC has recognised the problem and has developed a proposal for an ‘off-take of last resort mechanism’ that would provide a guaranteed minimum price for independent renewable generators. DECC is also undertaking a CfD market readiness report which is working on how current Power Purchase Agreements (PPA) could be changed to better complement the CfD regime.

DECC’s consultation on competitive allocation will close on 12 February 2014.

Read Next

September 17, 2025
US renewables developer Longroad Energy has reached financial close for its 400MW 1000 Mile solar project in the US state of Texas.
September 17, 2025
Spanish renewables developer and operator Acciona Energía has commissioned its 412MWp Juna solar PV plant in Kawani village in the western state of Rajasthan. 
September 17, 2025
Spanish IPP Velto Renewables has acquired a portfolio of 53 operational solar assets in Spain with a combined capacity of 260MW.
September 17, 2025
Struggling Swiss solar manufacturer Meyer Burger has formally entered into a debt moratorium, with the possibility of rescuing the entire group now looking unlikely.
September 17, 2025
Nexamp has secured US$350 million through a long-term financing facility to expand its 6GW utility-scale solar and battery storage pipeline in the US. 
September 17, 2025
Chinese module producer DAS Solar is planning a 5GW manufacturing facility focused on producing high-efficiency back contact cells.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK
Solar Media Events
October 7, 2025
Manila, Philippines
Solar Media Events
October 7, 2025
San Francisco Bay Area, USA