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Renewable subsidies: A change of heart

Gareth Taylor reports on a surprising turnround by the Government.

The UK Government has launched its consultation for round four of the Contracts for difference auctions, effectively reversing its earlier ban on financial support for established technologies.

The CFD awards developers a guaranteed “strike price” for electricity which is based on a competitive system which is intended to give value to the consumer. Schemes bid against each other with contracts being awarded to those with the lowest strike price.

The inclusion of established technologies such as onshore wind and solar photovoltaic recognises that they offer value for money compared to other, more early-stage technologies.

While the first subsidy-free schemes are in the pipeline, the ability to apply for CFD will give comfort to developers which will in turn support the supply chain and wider industry.

The consultation report also makes clear that liaising on projects with the community at an early stage is essential, as is ensuring that the local area benefits from the project throughout the lifetime of the scheme.

The next round of CFD is due to take place in 2021 and is highly likely to be open for onshore wind and solar PV greater than 5MW.

Galbraith believes this announcement will reinforce investment in the sector, but planning policies remain a barrier to development in the North of England.

We have seen renewed vigour in the market place over the past 12 months, with multiple developers bidding for options over sites as they look to secure their pipelines and we continue to act for both developers and landowners in realising their schemes.

This latest round, announced on March 2 by the Energy Secretary, Alok Sharma, will also be open to solar, with proposals to include floating offshore wind.

The scheme will also be changed to facilitate the deployment of energy storage.