UK's CfD budget increased

UK: The government has increased the yearly budget available to renewable energy projects competing in the first contracts for difference (CfD) financing round to £300 million (EUR 384 million).

Energy secretary Ed Davey has increased the budget for CfDs

In July, the Department for Energy and Climate Change (Decc) said projects could apply for a share of £205 million a year. The increase has been made possible because of lower estimates of costs for other policies, such as the Renewable Obligation.

Decc also confirmed the first competitive round of financing will open on 16 October – two days later than originally planned. Decc delayed the auction to allow time to finalise the budget. Projects will now have until 30 October to submit applications.

Access to funding is based around the type of technology used. Established technologies, which include onshore wind, will now compete for a slice of a £65 million yearly budget.

The original £50 million budget will be used for projects due to come online in 2015/16. The additional £15 million will be for projects commissioned from 2016/17 onwards.

Less established technologies, like offshore wind, now have an annual budget of £235 million from 2016. Similarly, the original £155 million budget will be for projects commissioned in 2016/17 with the extra money being used for later projects.

Under the CfD scheme, renewable energy projects will be handed a 15-year contract, which guarantees a set price for the electricity produced.

For wind projects, the guaranteed prices will be £95/MWh produced onshore and offshore sites will receive £155/MWh. The prices will progressively decrease to £90/MWh and £140/MWh respectively by 2018/19.

Five offshore projects, including Dong Energy's 750MW Walney Extension, have already been awarded CfDs in an early, non-competitive round of funding.

In August, the energy department released a policy paper outlining plans to open the CfD scheme to non-UK projects from 2018.