Solar industry loses out in green power deals

Cheap and popular solar power has lost out in an auction of contracts for green energy projects worth more than £315 million, the industry has claimed.

Subsidies have been awarded to 27 renewable electricity projects
Subsidies have been awarded to 27 renewable electricity projects

Under the new Contracts for Difference (CfD) auction, subsidies have been awarded to 27 renewable electricity projects – including 11 in Scotland that will provide enough power for more than 600,000 homes.

The winners of the auction were awarded 15-year contracts that guarantee a price for the power generated as part of the UK government’s plan to encourage renewable energy.

Officials said the process would deliver more than 2 gigawatts (GW) of green power capacity and cost £110m less a year than it would have without competition.

But just five solar farms, which were competing with other “established” technologies such as onshore wind and hydro for a share of a £50m pot, have secured contracts for 71 megawatts (MW) of power.

Fifteen onshore wind farms, providing ten times as much capacity, have secured subsidies in the auction.

Offshore wind was competing as a less mature technology in a separate part of the auction that accounted for the majority of the £315m, and secured contracts for two wind farms with a combined capacity of 1,162MW.

Paul Barwell, chief executive of the Solar Trade Association, said: “Unfortunately this result is as disappointing as we predicted. The soon to be cheapest and most popular renewable – solar power – has lost out in a complex auction scheme that favours big players and genuinely established technologies.”

As the results of the auction were unveiled, UK Energy Secretary Ed Davey said: “This world-leading auction has delivered contracts for renewables projects right across the UK.

“These projects could power 1.4 million homes, create thousands of green jobs and give a massive boost to homegrown energy while reducing reliance on volatile foreign markets.”

Niall Stuart, chief executive of trade body Scottish Renewables, said two-thirds of the onshore wind projects that were successful in yesterday’s auction round will be built in Scotland, while the offshore Neart na Gaoithe wind farm in the outer Forth estuary was expected to create “hundreds” of direct and indirect jobs during its construction.

“Scotland’s offshore wind ambitions, however, go far beyond this,” Stuart added.

“There remain almost 3GW of projects with planning permission which will still be looking to secure contracts. Together they could create over 10,000 jobs during construction. For them, the focus is now on the next auction, which is likely to start within the next 12 months.”

The 450MW Neart na Gaoithe wind farm will comprise up to 75 turbines with the capacity to deliver enough power for 325,000 homes. The project, by wind and solar firm Mainstream Renewable Power, is expected to be up and running by 2020.

Mainstream’s chief operating officer, Andy Kinsella, said the outcome of the CfD auction was “the result of seven years of dedication and demonstrates Mainstream’s world-class expertise in project development”.