UK Increases Renewable Energy CfD Budget By Over 50%, Allocating £1.555 Billion For AR6

The UK Department for Energy Security and Net Zero Emissions has increased the allocation of the sixth round (AR6) budget for renewable energy contracts for difference (CfD) in the UK by over 50% from the initial budget in March 2024, reaching £ 1.555 billion.

At the beginning of this year, the UK government announced a budget of 1.025 billion pounds for the Contract for Difference (CfD) AR6, with the majority (800 million pounds) going towards offshore wind power; The share obtained by the solar photovoltaic project is 120 million pounds.

According to the revised notice, the budget has now been updated to £ 1.555 billion, an increase of £ 530 million. Including: The total amount of the first type of subsidy reaches 185 million pounds, and solar photovoltaic will compete with onshore wind power and remote island wind power; The total amount of the second type of subsidy is 270 million pounds, which includes tidal currents, floating offshore wind power, and geothermal power; The third type of subsidy is for offshore wind power, with a total allocation of £ 1.1 billion. Although offshore wind power did not attract any bids in the previous round of bidding, the government still regards offshore wind power as the "pillar" of the country's clean energy mission.

The highest execution price for this auction has not changed and remains unchanged, as follows: 73 pounds/MWh for offshore wind power; Onshore wind power costs £ 64/MWh; Solar energy costs £ 61/MWh; Floating offshore wind power costs 176 pounds per MWh; Geothermal £ 157/MWh; Tide 261 pounds per MWh; This auction is expected to be held in August 2024, and the winning project will be announced in September of this year.