National Audit Office criticises UK CfDs

UK: The Government's public spending watchdog, the National Audit Office (NAO), has criticised the decision to hand out early contract for difference deals (CfD), saying consumers' interests were not protected.

by David Weston 27 June 2014

Dong's Walney extension was one of five offshore projects to receive the subsidy

In April, the Department for Energy and Climate Change (Decc) awarded eight planned renewable projects, including five offshore wind farms, CfD subsidies.

The NAO report said the deals might lead to developers making bigger profits by setting the subsidy prices too high.

It goes on to say that the deals will not deliver value for money and will leave a reduced budget for future subsidy rounds.

The CfDs will cost consumers £16.6 billion over the lifetime of the contracts, according to the NAO.

The subsidies will ensure that the projects receive a guaranteed price for the electricity produced.

The offshore wind projects to receive support are: Dong Energy's 258MW Burbo Bank, 1.2GW Hornsea 1 and the 660MW Walney Extension; Repsol and SSE's 664MW Beatrice development; and the 400MW Dudgeon site being developed by Statkraft and Statoil.

All projects are currently under development and will be able to claim the subsidies from 2015.