Skip to main content
News Supply

CfD auction set to be highly competitive with over 10GW likely to compete

Image: John Allan.

Image: John Allan.

The upcoming Contracts for Difference (CfD) auction is set to be highly competitive, with over 10GW of capacity likely to compete.

Analytics company Cornwall Insight calculated that 13GW of projects in its Renewable Pipeline tracker could potentially be eligible in Allocation Round 4 (AR4), which is set for 2021.

The CfD auction was heartily welcomed by the energy industry for its inclusion of Pot 1 technologies, such as onshore wind and solar, which haven’t been included since 2015.

A large portion of the 13GW will likely be these Pot 1 technologies, with Cornwall Insight finding that 5.5GW are likely to be in this set. The rest will consist of 6GW of offshore wind and ~1.0GW for Pot 2 technologies, of which a significant proportion will be Remote Island Wind (RIW).

James Brabben wholesale manager at Cornwall Insight said that the results were “revealing”, both from a commercial perspective and in terms of wider policy and network charging.

"The onshore wind capacity totals 4.2GW, a high figure considering the ~13GW in operation currently. Of this, over 3.8GW is in Scotland, highlighting the continued concentration of sites here.”

The group filtered down its calculated total pipeline of over 37GW across 800+ sites in the UK to find those most likely to bid, based on which were eligible and when they gained planning permission.

Cornwall Insights’ analysis also found that the large majority of the potential CfD AR4 pipeline is in Scotland.

This is helped by Scotland being home to the entire RIW pipeline, adding a total 900MW, Brabben explained.

"Dominating this is the potential 450MW Viking wind farm development on the Shetland Isles. With offshore wind carved into a separate 'Pot 3', RIW projects could be in a more competitive position when compared to previous auctions.

“Although the auction is set to be a competitive one, the location of potential applications may cause other issues such as high Transmission Network Use of System (TNUoS) costs for larger sites in Scotland, differences in load factors and site conditions and wider financing and strategic factors at play from project sponsors.

"The pipeline may also change as we head through to 2021. Particularly as some sites continue to look at subsidy-free and merchant options instead, while new sites may also join the queue for the CfD."

Last week, the Department of Business, Energy and Industrial Strategy confirmed that the timeline for the auction will go ahead unchanged despite disruption due to COVID-19. There is currently a consultation underway, looking at potential changes to technology pots, an extension of the negative pricing rule and a relaxation of energy storage metering requirements.


End of content

No more pages to load