CfD Stakeholder Bulletin — 7 July 2022
Summary
The fourth CfD auction allocated contracts to 93 projects totalling nearly 11GW of capacity, almost double the previous round in 2019. Offshore wind strike prices have fallen 70% since the first auction in 2015. Technologies included offshore wind, onshore wind, solar, and for the first time tidal stream and floating offshore wind.
Why it matters
The capacity increase demonstrates demand for long-term revenue certainty, while falling offshore wind prices reflect technology cost reductions and competitive pressure from the auction format. As such, the CfD mechanism continues to transfer technology risk from developers to consumers while securing supply at decreasing costs.
Key facts
- •93 projects awarded contracts
- •Nearly 11GW total capacity
- •87% increase from AR3 in 2019
- •Offshore wind strike prices down 70% since 2015
- •First contracts for tidal stream and floating offshore wind
Areas affected
Related programmes
Memo
Contracts for Difference: Stakeholder Bulletin 7 July 2022 Government publishes Allocation Round 4 results The results confirm that the fourth Contracts for Difference (CfD) auction is the most successful yet. Ninety-three new low-carbon electricity projects across Great Britain have won contracts in the fourth CfD auction (AR4) – more than in the previous three auctions combined. The results, which have been published this morning, also confirm that the auction has delivered record generating capacity, nearly 11GW – almost double (+87%) what was achieved in the last auction in 2019. That’s enough to generate sufficient electricity to power around 12 million homes. More renewable technologies have been successful in AR4 than ever before, including offshore wind, onshore wind, solar, remote island wind, and – for the first time ever – tidal stream and floating offshore wind. AR4 has also delivered a further reduction in offshore wind strike prices. The price per MWh of offshore wind has now fallen by almost 70% since the first CfD auction in 2015. • Full AR4 results • Government press release The successful AR4 projects will bolster Britain’s energy security and further diversify its energy mix away from expensive fossil fuels, reflecting the commitments made in the British Energy Security Strategy. UK General Data Protection Regulation This stakeholder bulletin is being circulated to people who have opted in to the Contracts for Difference stakeholder contact list. We issue these stakeholder bulletins as a convenience to interested parties, however it is not in any way essential to be on this list to participate in major consultations or allocation rounds. Purpose & scope of this list: This list is managed by the Department for Business, Energy and Industrial Strategy (BEIS) (and any successor departments) and will be used to inform interested parties of policy developments relevant to the Contracts for Difference scheme for renewable energy projects (and any direct successor schemes). It is not used for any other purposes. To be removed from the circulation list: Please send a blank e-mail with the subject ‘opt out’ (if the receiving e-mail you use is different to the one you send the e-mail from, include that e-mail address in the subject of the e-mail) to BEISContractsForDifference@beis.gov.uk. If you have received this indirectly and want to be added to this list: Send a blank e-mail with the subject line ‘opt in’ to BEISContractsForDifference@beis.gov.uk. You can withdraw your consent to opt in at any time. We will normally keep your address on this list until you: a) withdraw your consent to opt in, b) the scheme closes without any successor, c) we receive reports your email address is no longer operational, or d) you do not respond to a periodic request from us to reconfirm your desire to opt in.