Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty’s Government what are their plans for the next Contracts for Difference bidding round; when they expect the round to open for bids; when they expect it to close; when they expect to announce the winners; how much funding is available; and whether they intend to apply any new conditions, different from Round 1, and if so, what.

On 9 November 2016, we published information relating to the second Contracts for Difference (CFD) Allocation Round, which will open in April 2017. This included reconfirming the budget of £290m annual support for 15 years for ‘Pot 2’/less established technologies for projects starting to generate from 2021/22 or 2022/23.

The CFD Counterparty Body - The Low Carbon Contracts Company - has published the CFD implementation plan, which sets out key indicative dates in relation to the second allocation round. The plan includes the shortest and longest likely duration from the allocation round opening to when contracts are awarded. This is approximately between 4 and 6 months depending on whether or not there are any reviews and appeals through the process.

There are some variations from Round 1. The minima for wave and tidal, which applied to the 2015 CFD round, will not be extended as the expected costs for Wave and Tidal Stream remain high relative to other less expensive technologies in Pot 2.

We have also introduced a temporary cumulative cap of 150MW (equivalent to a budget maximum of £70m) on fuelled technologies for this round. The Government believes that it is appropriate and proportionate to impose a temporary maxima while we review these technologies and consider the recent Call for Evidence on fuelled technologies in the CFD.

Wave, tidal stream and fuelled technologies all remain eligible to compete in Pot 2 for CFD contracts, alongside geothermal and offshore wind, which will help to drive costs down.