UK government to contest challenge to CfD RES subsidy scheme

LONDON (ICIS)–The UK government department for business, energy and industrial strategy (BEIS) will contest a challenge to the legality of its main mechanism for supporting producers of renewable energy (RES), a spokesman told ICIS.

Renewable energy company Banks Renewables lodged a judicial review against the contracts for difference (CfD) subsidy scheme, the company said last week , on the basis of the exclusion of onshore wind farms from the process.

Banks Renewables operates ten wind farms in Scotland and northern England with an installed capacity of 224MW.

A further two wind farms with a combined capacity of 150MW the company plans to build in Scotland were barred from the current third round of CfD auctions.

National Grid has extended the bidding window in the auction from 15 to 29 August and informed qualifying applicants of the legal challenge.

“Our CfD scheme has supported the investment of £490m annually in renewable technologies and more than 50% of our energy now comes from low-carbon sources – a vital part of our move to becoming a net-zero-emissions economy by 2050,” said the BEIS spokesman.

“We run the scheme lawfully and will be contesting this claim.”

The UK government has excluded onshore wind and solar from CfD auctions since the second round of auctions in 2017.

CfD auctions have so far favoured offshore wind and ICIS analysis previously showed between 1.9GW and 6GW of new offshore wind capacity is likely to be awarded CfDs in the current round.

ICIS Horizon modelling forecasts installed offshore wind capacity reaching 29.6GW by 2030, an increase of 21.4GW. This is based on the UK government’s target of 30GW of offshore wind by 2030.

By comparison, ICIS Horizon forecasts 16.6GW of onshore wind by 2030, an increase of only 3.6GW.