“The landscape is generally quite good in terms of how it can evolve and how it can develop,” Anastasios Christakis, COO of Queequeg Renewables, told our colleagues at PV Tech Premium at last month’s Renewables Procurement & Revenue Summit, where he spoke about the policy environment for UK solar projects.
Hosted by Solar energy portal Publisher Solar Media in London, the event brought together around 200 industry experts to discuss the financial landscape of Britain and Europe, and speakers were generally optimistic about the direction in which renewable energy investment would take in Britain, with the Contracts for Difference (CfD) program being a popular policy.
“We view the CfD scheme as very attractive from a generator perspective for several reasons,” said Francisco del Rio, head of Power Sales Europe at NTR plc. His colleague, NTR investment director Shane Power, will speak at another Solar Media event, the CP2030 summit, which will take place from June 30 to July 1 in London. The summit will provide an opportunity to connect with key decision makers, explore investment opportunities and collaborate on solutions to navigate complex supply chains and policy frameworks; view the agenda And book tickets on the event website.
“One of them, yes [that the contracts are] in the long term, up to twenty years, which ensures a stable inflow of money and predictability and stability in terms of price,” del Rio added. “That also opens the door to financing and raising debt, and with low margins on interest rates. Moreover, indexation is also attractive because it hedges operating costs, which are normally linked to longer-term inflation.”
The sheer scale of the plan is something to behold; the most recent round, allocation round 7a, saw CfDs awarded to a record 155 individual solar PV projects with a capacity of 4.9 GW, at a price 10% lower than the previous round.
“[It’s] It is a good plan and it has helped create bankability for the projects we have,” said Christakis. “It obviously has its limitations, but overall we see that it is working. [and] has worked and can usefully take the lessons from the previous rounds and apply them to the next rounds, to make it even better.”
Other experts at the summit suggested that the CfD scheme offers the greatest long-term benefit because fundamentally changing Britain’s energy mix from one reliant on fossil fuels to one reliant on clean energy will simply take time, and processes such as the CfD scheme have ensured that transition is financially viable for developers and investors.
“There is a short term and a long term,” says Matt Parry, head of energy and energy demand at REA, who spoke during the first panel of the summit. “[The UK government] is doing quite well in the long term, encouraging investment in renewables and building out battery storage and long-term energy storage (LDES).”
Read the full interviews about the purchasing and turnover of sustainable energy on PV Tech Premium (subscription required).
