UK to open new CFD auction for onshore wind, solar projects

London — The UK government is preparing to open a new Pot 1 Contracts for Difference auction for onshore wind and solar, renewable energy sector associations told S&P Global Platts Monday.

This would reverse an effective moratorium on onshore wind since 2015 and large, ground-based solar since 2017, when the Renewables Obligation was closed and Pot 1 CFD auctions for mature renewable technologies were suspended -- leaving the field open only to Pot 2 "emerging technologies," notably offshore wind.

"Further detail on the size and timing of the auction is needed, but it is expected that the auction would deliver new capacity at the kind of low prices seen last year in a similar auction for offshore wind, which secured contracts at below the current wholesale price of electricity," RenewableUK said.

"We've heard a first auction is due next year, with the emphasis on community engagement," said the Solar Trade Association's Jack Dobson-Smith.

A 2021 auction would enable "greater deployment of the cleanest, cheapest forms of power generation today, cutting costs by GBP200-300 million annually," the STA said.

An official announcement from the Department for Business, Energy and Industrial Strategy was due shortly, it said.

RenewableUK estimates there are 4.6 GW of shovel-ready onshore wind projects that have cleared the local planning process.

The STA said there was a pipeline of 7 GW of solar projects in development.

Onshore wind and solar were "the most cost-effective forms of new energy generation," said Sam Hall director of the Conservative Environment Network.

"Polling shows a large majority of people support onshore wind, however it is right the planning system will give communities the final say over new projects," he said.

UK onshore wind additions fell to 629 MW last year, from a high of 2,683 MW in 2017.

A little over 300 MW of solar were added in 2019, according to STA estimates, down from just under 4,000 MW in 2015.

Large solar PV projects would be "competitive" with the lowest offshore wind CFD strike prices seen to date, Dobson-Smith said, at around GBP39.00/MWh ($49.79/MWh).