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United Kingdom

United Kingdom

Non-UK projects could bid for CfDs

UK: The UK government's energy department is considering opening up the Contracts for Difference (CfD) subsidy scheme to non-UK projects from 2018.

Dong's Walney extension was one of five offshore projects to receive an early CfD contract
Dong's Walney extension was one of five offshore projects to receive an early CfD contract

The Department of Energy and Climate Change (Decc) has released a policy paper outlining plans to open the subsidy scheme, launched under the Electricity Market Reform programme this year.

The paper highlights parts of the CfD process that need to be reviewed before offering it out to non-UK projects that can send energy to the UK. The move could leave it open for Scotland to receive subsidies if it votes to leave the UK in next month's referendum. .

Decc said the move to open up CfDs to foreign developers would increase competition to drive down costs and help secure the country's energy security.

The first competition round for the contracts is due to take place this autumn; this will be for projects in Great Britain.

Decc said complications with foreign regulations and a review of the contracts will mean non-UK projects will be unable to bid for contracts until "2018 at the earliest".

Foreign developers would need to compete with UK projects for the contracts and be subject to similar terms and conditions.

This move by the UK government differs from the Swedish government, which, last month, refused to pay subsidies to a Finnish project even though the energy was being transported into Sweden. The refusal was backed up by the European Court of Justice.

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