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United Kingdom

Rudd evasive on next CfD auction

UK: Energy minister Amber Rudd has refused to be drawn on questions over whether there will be a second contracts for difference (CfD) auction. But if one does go ahead, onshore wind is unlikely to be eligible.

Amber Rudd faced questions from the energy and climate change parliamentary committee
Amber Rudd faced questions from the energy and climate change parliamentary committee

Rudd was facing questions from the energy and climate change committee; a group of MPs set up to hold the energy department to account.

When asked when there would be an announcement on the next auction, the energy minister said: "I will be making an announcement on the CfD, but that won't be for a little while."

Questioned about whether there would be a second round, Rudd replied: "I can't confirm that at the moment."

At the RenewableUK Global Offshore Wind event in London at the end of June, Rudd told delegates there would be an announcement "in the next few weeks".

Rudd did confirm, however, the government's plans to close the CfD auctions to onshore wind. "Our manifesto set out that there would be no more subsidies for onshore wind, and we will be implementing those terms of the manifesto," Rudd said.

Alaistair Carmichael, a Scottish Liberal Democrat MP, asked Rudd whether she "anticipates onshore wind being part of the next CfD [auction]"?

"I wouldn't, no," replied Rudd.

Earlier in the meeting, Rudd had praised the CfD auction process as it "demonstrated that we can procure electricity more effectively through a market mechanism".

Permanent secretary to the department Stephen Lovegrove agreed. He said he was pleased the UK could hold auctions for renewable projects. "That is clearly the way in which we are going to continue in bringing renewables forward, because we do need to keep an eye on the costs."

The government has already put in motion plans to end the renewables obligation support mechanism for onshore wind a year earlier than planned as part of its manifesto pledge to end subsidies for the sector.

Chair of the energy and climate change committee, Angus MacNeil, a Scottish National Party MP, said: "It is deeply worrying that [Rudd] has said onshore wind will not be able to access the government's guaranteeed price contracts for difference.

"Onshore wind remains the cheapest form of clean power and consumers may get less new capacity installed for their money if energy levies are used to fund more expensive forms of low carbon power," he added.

The renewables obligation is being phased out to be replaced by CfDs. The first CfD auction in February awarded contracts for 748MW of onshore capacity across 15 projects, and two offshore projects totalling 1.1GW received support in the auction at an overall average of £98.86/MWh (€141/MWh).

Update: Amber Rudd spoke to business leaders in London about how the UK government plans to tackle climate change, whilst also improving the country's economic security. "We are committed to taking action on climate change and we are clear that our long-term economic plan goes hand in hand with a long-term plan for climate action," she said. You can read the full speech here.

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