The results of the sixth auction round (AR6) of the government’s Contracts for Difference (CfD) program have been released by the Department for Net Zero and Energy Security (DESNZ).
A total of 93 ground-based solar projects, with a combined capacity of 3.3 GW, scored support. AR6 did indeed get the highest budget ever for a round of funding, which reached a total of £1.5 billion after the Labor government announced a £500 million increase on July 30.
Strong market involvement meant competitive pricing, which resulted in clearing prices for solar, onshore and offshore wind energy being more than 18% below their administrative strike prices.
Energy Secretary Ed Miliband hailed the success of AR6, saying: “This auction has delivered a record number of solar projects that strengthen our mission for a solar revolution. We have advanced onshore wind energy, secured the largest commercial floating offshore wind project in the world and put the offshore industry back on its feet.”
Solar PV achieved a strike price of £50.07/MWh, above the prices achieved in both AR4 (which was £45.99/MWh) and AR5 (which was £47.00/MWh, the maximum allowed price for the auction). Although it was called “disastrous” by Miliband as it failed to win any offshore wind contracts, the outcome of AR5 was positive for the solar sector, with 56 solar projects secured, with a total capacity of just over 1.9 GW.
This auction round breaks a record set in AR4, when 66 solar projects, worth 2.2 GW, yielded CfDs.
EDF Renewables’ Longfield Solar Energy Farm, a Nationally Important Infrastructure Project (NSIP) with a generating capacity of 400 MW that was granted a Development Consent Order (DCO) in June 2023, won 299 MW in AR6. Longfield is the first solar development with a capacity of more than 50 MW to secure a CfD.
This was the highest allocated capacity. The smallest was 8 MW for Burton Top Farm, developed by Boultbee Brooks.
Last year, Low Carbon welcomed the AR5 results after CfDs were offered for 10 solar projects with a capacity of more than 350 MWp. In AR6 it won four projects with a combined capacity of just over 125 MW.
According to Cornwall Insight, solar’s CfD success stems from a strong pipeline of assets in many UK regions and its competitive advantage over onshore wind. Despite this positive outcome, combining operational and future CfD contracted capacity, total solar PV capacity in Britain is expected to reach at least 23.3 GW – well below the 50 GW target set in Labour’s Green Prosperity Plan.
This article was originally published entirely on our sister site, Current±.
