There have been no bids for new offshore wind farms in the government’s CfD auction this week, according to a news report.
- The contracts for difference (CfD) auction due to be announced tomorrow has not had bids for any big new offshore wind farms.
- Industry bosses have repeatedly warned of the need for reform to the CfD system – with strike prices no longer costs effective” amid soaring inflation.
- This could hamper the UK’s efforts to attract investment for the energy transition.
The Times, citing sources, said the contracts for difference (CfD) auction due to be announced tomorrow has not had bids for any big new offshore wind farms.
Industry bosses have repeatedly warned of the need for reform to the CfD system – with strike prices no longer costs effective” amid soaring inflation.
Scottish Renewables, Renewable UK and Energy UK said in July the industry’s capacity to invest is being “eroded” and said a larger budget for AR5, currently at £205m, should be increased.
The Times said the AR5 auction had failed to procure bids for any big new wind farms.
It said five projects with a combined 5GW were eligible but their developers – Vattenfall, ScottishPower and SSE – have all given warnings over cost inflation.
If correct, it would be a major blow to the UK’s offshore wind ambitions of 50GW by 2030.
Allocation Round 5 is the first annual auction since the scheme’s inception, and comes after AR4 – which secured 11GW of capacity across wind solar and tidal – was branded the “most successful ever”.
The CfD mechanism sees a contract offer, providing develpoers revenue certainty over the price customers will pay.
That price has plunged over recent years, and recent contracts have been below power prices – but cost inflation meant AR5 may need to see prices go up to address that.
The government, however, has not increased the price on offer.