CfD Stakeholder Bulletin — 26 July 2021
Summary
DESNZ published its response to the eight-week Call for Evidence on renewable energy policy design that closed 8 March 2021. The response acknowledges that the CfD scheme faces procurement challenges requiring both short-term incremental improvements and longer-term structural changes. These longer-term changes will be considered as part of wider electricity market reform led by BEIS.
Why it matters
The government explicitly acknowledges CfD procurement problems but defers structural reform to broader market design work. This creates uncertainty for developers as incremental fixes may not address fundamental auction design flaws, while the timeline for comprehensive reform remains undefined.
Key facts
- •Call for Evidence ran 14 December 2020 to 8 March 2021
- •Government acknowledges CfD procurement challenges need both short-term and long-term fixes
- •Longer-term changes integrated into wider electricity market reform
Areas affected
Related programmes
Memo
Contracts for Difference: Stakeholder Bulletin 26/07/2021 Published – Government response to the Call for Evidence: Enabling a High Renewable, Net Zero Electricity System Today we published the Government’s response to our Call for Evidence: Enabling a High Renewable, Net Zero Electricity System, which ran from 14 December 2020 to 8 March 2021. The Call for Evidence sought views on how a wide range of renewable policies should adapt over the next decade, cementing the UK’s pathway to net zero. The Contracts for Difference (CfD) scheme has been hugely successful in delivering renewable generation whilst reducing the costs of technology. However, we are aware that challenges have emerged over time in procuring renewables through the CfD that will need short-term incremental improvements and longer-term change. We recognise any longer-term changes will need to be considered holistically as part of a wider approach to the electricity market being spearheaded by BEIS. We have provided a summary of responses received, which will inform our approach to the long-term future of renewable support and the future design of the CfD scheme. The Government response can be found on GOV.UK here: https://www.gov.uk/government/consultations/enabling-a-high-renewable-net- zero-electricity-system-call-for-evidence We would like to thank all stakeholders that responded to this Call for Evidence, with detailed and insightful views that have been well received by several teams across BEIS. This is part of an ongoing engagement with stakeholders and further consultation will be undertaken on any future policy proposals. General Data Protection Regulation This stakeholder bulletin is being circulated to people who have opted in to the Contract 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 Contract 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.