UK allocates GBP205mn for fifth CfD round

The UK Government has announced its plan to provide up to GBP205 million (US$247.72 million) in financial backing for the fifth annual flagship for the fifth Contracts for Difference (CfD) allocation round (AR5). 

The financial scheme covers GBP170 million (US$205.43 million) for established technologies such as offshore wind and about GBP10 million (US$12.08 million) budget available for tidal stream projects. 

The CfD scheme is London's flagship mechanism for supporting new British low-carbon electricity generation projects, having awarded contracts to nearly 27GW of low-carbon capacity to date. Although CfD strike prices have historically fallen, a rising weighted average cost of capital (WACC) and the resulting increase in the levelized cost of energy may result in higher strike prices in the upcoming AR5.