MARKETS I UK


Splitting the pot


This year’s CfD budget will be split between technology pots. Within each pot technologies will compete against each other, but less established technologies are not expected to compete against the established technologies.


Pot 1 (established technologies): £50m for projects commissioning in 2015/16, and an additional £15m (i.e. £65m in total) for projects commissioning from 2016/17 onwards.


Pot 2 (less established technologies): £155m for projects commissioning from 2016/17 onwards, and an additional £80m (i.e. £235m in total) for projects commissioning from 2017/18 onwards.


Pot 3 (biomass conversion): No budget released in 2014.


The projects that win the auction will receive 15 year contracts - meaning that the total spend per year for contracts allocated in the first allocation round this autumn will be up to £300m.


In April the Government published a Solar Strategy that set out the actions that Government is taking in partnership with the industry to ensure that the solar sector continues to grow. It included a focus on deploying more solar panels on the top of commercial, industrial and public sector buildings. By attempting to change industry focus the Government has of course upset the companies that were doing well at the ground mounted installations.


Continue consulation


The Government has announced further consultation to tighten aspects of the new plan and will publish decisions as soon as possible after the consultation closes on 24 October 2014, following careful consideration of consultation responses and evidence received.


Subject to this consultation and Parliamentary approval, and any state aid requirements, they intend to implement a decision on the RO through an amendment to the Renewables Obligation Closure Order 2014, with the aim of the changes coming into force on 1 April 2015.


An argument made by several respondents to the May 2014 consultation on proposed changes to financial support for solar PV and by industry representatives at stakeholder engagement events was that introducing early closure of the RO for new large- scale solar PV creates a “cliff-edge” for projects after which no RO support will be available.


It was argued that the risk of missing the 31 March 2015 deadline would dissuade investors from committing investment to projects that were genuinely planning to commission in the final quarter of 2014/15. Industry argued that the single biggest uncertainty for


Spreading construction around will also help more farmers than with recent concentrated developments, and Conergy will continue to acquire new projects across the country.


For larger 5MW+ solar farms, the window of opportunity is closing on ROC builds, and we recommend investors and developers close quickly, even with the Government’s assurances on late grid connections, as we simply don’t know what kind of weather we’ll get this winter.


Looking ahead, CfDs are more attractive to investors than the ROCs, as they offer greater security, and we will bid in the first CfD auction to test the process for our customers and investors.


Overall for the British solar industry, the cost of finance is falling, as is the cost of build and installation, and that is thanks to the strong incentive structures that have been put in place. In distributed generation, falling costs will always be more important than the kinds of incentives and protections sought by the coal, gas, nuclear and wind industries.”


©2014 Permission required. Angel Business Communications Ltd.


projects in the run up to the RO closure deadline would be grid connection delays.


The Government is therefore considering an additional grace period to protect projects against the risk of missing the early RO closure date due to delays in getting connected to the electricity grid, where the delays in securing connection are outside of the developer’s control.


However, the Levy Control Framework (LCF) impact of offering a grace period is uncertain and there is a need to gain a better understanding of the possible impacts of such a grace period.


Robert Goss, MD, Conergy UK, one of the top five biggest builders of solar farms in Britain, and who participated on DECC’s Solar Strategy taskforce last year, commented on the announcements, “As we move towards grid parity it is entirely reasonable to cut back on the support mechanism for solar.


In June this year, the average size of a British solar farm was only 4MWp, so after the handful of larger projects have been built, it will be business as usual on the many good sites still available.


Fears of rural industrialisation proved to be unfounded, and most communities in Britain would prefer a solar farm tucked away behind the hedgerows, to a nuclear power station or new housing estate. The ROCs are well-understood by investors and there is plenty of work to do for companies with aggregated smaller sites on low grade land.


Issue V 2014 I www.solar-international.net 27


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80