All contracts signed for the UK Government’s CfD Round 4 scheme | Tech Reddy


All 99 contracts offered through the fourth Allocation Round (AR4) of the UK government’s Contracts for Difference (CfD) scheme have been signed and returned to the Low Carbon Contracts Corporation (LCCC).

A total of 93 individual projects across Great Britain will now proceed to work with LCCC to meet the contractual milestones specified in the CfD, supporting the development of the projects and the delivery of almost 11GW of energy. The first AR4 projects should be online in 2023-24.

According to LCCC, the total estimated nominal budget impact of AR4 projects will be less than zero in the first three years of delivery, with an increase in 2027-28 corresponding to the sharp increase in generation capacity coming in line He outlined that cash flows under the CfD are always subject to current prices at the time of generation, however, the AR4 portfolio will return money to the CfD scheme at current market prices.

Given the size and diversity of AR4, LCCC has automated the process used to produce, distribute and receive signed contracts. While the manual process used in previous allocation rounds saw 16 contracts produced and returned within ten days in AR3, this year’s process saw all 99 contracts issued and returned within a shorter time period. With allocation rounds expected to be annual from March 2023, this process will save time and resources for stakeholders across the scheme.

Projects must now pass their Initial Conditions Precedent within twenty working days. This contractual stage is the first step in the journey of CfD projects to construction and operation.

George Pitt, Chief Financial Officer of LCCC said: “We are delighted to welcome these projects into the CfD portfolio and look forward to putting them to work, whether with our established CfD partners or new stakeholders. 2022 has been a landmark year for the CfD scheme, and the diversity and scale of the AR4 projects proceeding is a huge mark of confidence in it. In the midst of unprecedented times, this new generation of energy projects is benefiting communities and businesses across the length and breadth of the country , as well as protecting the long-term health of our environment, economy and society.”

Kwasi Kwarteng, UK Business and Energy Secretary, said: “Our renewable energy auction scheme has been an outstanding success, with the latest round securing enough clean energy to power twelve million British homes and the price of clean energy falling even further.

“Having signed contracts means the projects can go ahead and deliver jobs and opportunities across the country. This will help secure our domestic supply of cheaper renewable energy and lower the price of energy for millions of British households as we let’s move away from expensive fossil fuels.”

Several offshore wind farms with a combined capacity of nearly 7 GW are among the winning projects. With an overall budget of £295 million, the fourth round saw £210 million allocated to the vessel supporting offshore wind projects, and a further £24 million for floating offshore wind projects. It also saw the price per unit (MWh) of offshore wind secured in this round reaching £37.35/MWh, almost 70% less than that secured in the first allocation round in 2015.

The winning projects include the 1080 MW


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