Contracts for Difference draft strike prices
Today, the Department of Energy and Climate Change announced the proposed strike prices that will be available from 2014 – 2019 for renewable electricity including onshore and offshore wind, tidal, wave, biomass conversion and large solar projects. This support comes from within the £7.6 billion Levy Control Framework, as previously announced.
Strike Prices effectively remove price volatility risk for electricity generated from low-carbon sources, under new long-term CfDs being established by the Energy Bill. This ensures greater certainty to generators and therefore a better deal to consumers.
They form a core component of the Government’s strategy to bring forward investment in affordable low-carbon electricity generation – including renewables, Carbon Capture and Storage and new nuclear.
CfDs are vital to give investors the confidence they need to pay the up-front costs of major new infrastructure projects, and will help ensure that renewable energy makes up more than 30% of the UK’s electricity mix in 2020, helping to significantly decarbonise the power sector by 2030.
These prices are broadly comparable to the support levels available under the Renewables Obligation, with a number of adjustments to account for the benefits of CfDs.
CfDs will make it cheaper to deliver low-carbon generation by around £5 billion up to 2030, because they will deliver cost of capital reductions that cannot be achieved through existing policy instruments.
Technology | Draft Strike prices £/MWh (2012 prices) | ||||
---|---|---|---|---|---|
2014/15 | 2015/16 | 2016/17 | 2017/18 | 2018/19 | |
Anaerobic Digestion | 145 | 145 | 145 | 140 | 135 |
Hydro | 95 | 95 | 95 | 95 | 95 |
Offshore Wind | 155 | 155 | 150 | 140 | 135 |
Onshore Wind | 100 | 100 | 100 | 95 | 95 |
Large Solar PV | 125 | 125 | 120 | 115 | 110 |