April 7 (SeeNews) - The two solar projects of 33 MW in total that made the lowest bids in the UK’s first Contract for Difference (CfD) auction will not be built, it was confirmed this week.
Hadstone Energy's 19.1-MW Wick Farm solar photovoltaic (PV) project and the 13.78-MW Royston solar scheme were to sign CfDs at a strike price of GBP 50.0 (USD 74.3/EUR 68.4) per MWh. Both were planned to be completed in the 2015-16 period, but the CfD register published by Low Carbon Contracts Company (LCCC) shows they will not proceed.
When the results of the first CfD auction were announced in February, many were surprised by the strike price of GBP 50/MWh for solar capacity. It is near the market price for electricity and was notably below the average rate for onshore wind in the auction.
Three other solar projects, with a combined capacity of 38.7 MW, won CfDs at a strike price of GBP 79.23/MWh. They will be installed in 2016-2017.
The British government ended support for 5-MW-plus solar projects under the Renewables Obligation (RO) mechanism with effect from April 1, 2015. Thus the CfD auctions remained as the only option for large-scale solar parks to get some support. That, however, is not at all easy given that solar projects compete for CfDs with onshore wind.
“That no large solar farms will be built in the next year under either the RO or CfDs is a tragedy, as we predicted these types of projects could be cheaper than gas in just 3 years with stable policy support,” commented Leonie Greene, head of external affairs at the Solar Trade Association (STA).
(GBP 1 = USD 1.486/EUR 1.369)