UK details plans for future of the CfD scheme

The U.K. government on Nov. 24 confirmed that coal-to-biomass conversion projects will be excluded from future allocation rounds under its Contracts for Difference (CfD) scheme. Dedicated biomass with combined-heat-and-power (CHP) will continue to be eligible.

The U.K. Department for Business, Energy and Industrial Strategy made the announcements as part of its response to a public consultation on proposed amendments to its CfD scheme. The public consultation closed on May 29, 2020.

The amended CfD program will include three pots for next year’s allocation round. Pot 1 includes established technologies, including onshore wind projects of more than 5 megawatts (MW), solar photovoltaic projects of mor ethan 5 MW, energy from waste with CHP, hydro projects between 5 MW and 50 MW, and landfill gas and sewage gas projects. Pot 2 includes less established technologies, including advanced conversion technology (ACT) projects, dedicated biomass with CHP, floating offshore wind, geothermal, remote island wind projects with greater than 5 MW of capacity, tidal stream projects and wave projects. Pot 3 is focused exclusively on offshore wind.

The government’s move to remove coal-to-biomass conversions from future allocation rounds of the CfD scheme was expected. Some stakeholders, however, expressed concern that the change would adversely affect the development of bioenergy with carbon capture and storage (BECCS). In its response, the BEIS said the government continues to look at BECCS separately from the role of coal-to-biomass conversions. The government also noted it developing a new cross-government Biomass Strategy that will look at how biomass should be sourced and used across the economy to best contribute to the U.K.’s net zero target. The Biomass Strategy is expected to be published in 2022.

The BEIS also opened a new public consultation on Nov. 24 that invites views on changes to the CfD’s supply chain policy, proposed drafting changes to the CfD contract to implement decisions taken in the government response, and proposed minor and technical changes that aim to improve the operation and clarity of CfDs. Additional information is available on the BEIS website.