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Released March 11, 2015 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Renewable energy projects with the potential to supply enough power for more than a million homes have agreed guaranteed prices for the electricity they produce with the U.K. government.
The first auction of Contracts for Difference (CfDs) -- the government's tool for agreeing a fixed, or 'strike' price, for electricity produced at new projects - covers more than 2,100-megawatts (MW) of generation capacity and cost £315 million ($474.4 million). The strike prices are agreed for the first 15 years of a project's life and are designed to boost confidence in developers and potential investors. The auction aims to make projects to be more competitive in order to drive down costs. The government said that the winning projects will cost £110 million ($166 million) per year less than they would have without competition.
Two offshore windfarms, East Anglia Phase 1 in England and Neart na Gaoithe in Scotland, were the biggest projects supported, totalling 1,162 MW of capacity with agreed strike prices varying between £114.39 and £119.89 per megawatt hour (MWh). A further 15 onshore windfarms located throughout the U.K. and totalling 748.55 MW capacity; agreed strike prices of between £79.23 per MWh and £82.50 per MWh. Finally, five solar projects with capacities running from 12 to 20 MW were chosen, alongside two combined heat and power (CHP) projects with a combined capacity of almost 100 MW.
"The auction has driven down prices and secured the best possible deal for this new clean, green energy," claimed U.K. Energy & Climate Change Secretary, Ed Davey. " "This world leading auction has delivered contracts for renewables projects right across the U.K.. These projects could power 1.4 million homes, create thousands of green jobs and give a massive boost to home-grown energy while reducing our reliance on volatile foreign markets."
The government said that only the most 'price competitive' projects were awarded CfDs. It added that the clearing price for solar came in at up to 58% lower than the price would have been without competition, offshore wind at up to 18% lower and onshore wind at up to 17%.
The auction was broadly welcomed by renewable energy groups.
Maria McCaffery, chief executive of RenewableUK, the trade and professional body for the U.K. wind and marine renewables industries, commented: "We are pleased to see these projects, which between them could power over 1.2 million homes and create substantial numbers of jobs as well as much-needed investment in our communities. The prices achieved by the onshore industry show what utter folly it would be to choke off this low cost form of low carbon power."
She added that the offshore wind industry is on course to lower its electricity production costs to £100/MWh by 2020.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
The first auction of Contracts for Difference (CfDs) -- the government's tool for agreeing a fixed, or 'strike' price, for electricity produced at new projects - covers more than 2,100-megawatts (MW) of generation capacity and cost £315 million ($474.4 million). The strike prices are agreed for the first 15 years of a project's life and are designed to boost confidence in developers and potential investors. The auction aims to make projects to be more competitive in order to drive down costs. The government said that the winning projects will cost £110 million ($166 million) per year less than they would have without competition.
Two offshore windfarms, East Anglia Phase 1 in England and Neart na Gaoithe in Scotland, were the biggest projects supported, totalling 1,162 MW of capacity with agreed strike prices varying between £114.39 and £119.89 per megawatt hour (MWh). A further 15 onshore windfarms located throughout the U.K. and totalling 748.55 MW capacity; agreed strike prices of between £79.23 per MWh and £82.50 per MWh. Finally, five solar projects with capacities running from 12 to 20 MW were chosen, alongside two combined heat and power (CHP) projects with a combined capacity of almost 100 MW.
"The auction has driven down prices and secured the best possible deal for this new clean, green energy," claimed U.K. Energy & Climate Change Secretary, Ed Davey. " "This world leading auction has delivered contracts for renewables projects right across the U.K.. These projects could power 1.4 million homes, create thousands of green jobs and give a massive boost to home-grown energy while reducing our reliance on volatile foreign markets."
The government said that only the most 'price competitive' projects were awarded CfDs. It added that the clearing price for solar came in at up to 58% lower than the price would have been without competition, offshore wind at up to 18% lower and onshore wind at up to 17%.
The auction was broadly welcomed by renewable energy groups.
Maria McCaffery, chief executive of RenewableUK, the trade and professional body for the U.K. wind and marine renewables industries, commented: "We are pleased to see these projects, which between them could power over 1.2 million homes and create substantial numbers of jobs as well as much-needed investment in our communities. The prices achieved by the onshore industry show what utter folly it would be to choke off this low cost form of low carbon power."
She added that the offshore wind industry is on course to lower its electricity production costs to £100/MWh by 2020.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
