Following the UK Government announcement of details of the next round of the Contracts for Difference scheme, Andrew Hedges, climate change and clean energy partner, and Rob Marsh, partner and co-chair of the renewable energy practice in the London office of Norton Rose Fulbright, comment:

 Andrew Hedges comments:

“If backed by a well-sized budget (which is an important and open question), this is fantastic news for UK renewables. Considering the innovation that has been happening in merchant projects in recent years, we expect this will underpin exciting hybrid projects that combine CfD and merchant elements.

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This news is important to corporate buyers. They would no longer be the main long-term revenue option for UK onshore projects, thus reducing their competitive leverage. That said, the CfD auction process for onshore projects would enable buyers to see what the market considers the lowest price is for a long-term revenue solution.”

Rob Marsh comments:

“There have been whispers in recent months about renewed support for onshore technologies and this consultation is a positive signal that the Government recognise a need to stimulate and enable growth in these sectors. More will be required (notably in the context of the consenting regime) to make a meaningful difference and to unlock the potential of extension of life and repowering opportunities, but this is a significant step forward in itself.”