REA Member Discussion – CfD non-price factors Call for Evidence
There is a current Government Call for Evidence considering how low carbon power projects could be rewarded for activities beyond power generation as part of a CfD contract. Currently considered with in the call for evidence are potential ways of rewarding activities such as capacity deployment, delivering sustainable supply chains, delivering innovation, and driving skills development – all of which are broadly being termed ‘non-price factors’.
The inclusion of these non-price factors could prove to be important for a range of low carbon generation technologies, which currently find it difficult to compete within price focused allocation rounds, but still have strategically important services they are able to offer the UK energy market. This may also be important for existing RO projects, given a consultation earlier in the year where government sought views on how the CfD could be used to repower existing generation assets, which may potentially also benefit from non-price factors being considered in CfD contracts.
The Call for Evidence also considers three options for how these none-price factors could be included in the CfD. This includes:
• ‘Top-up’ Payments to the CfD Strike Price
• Bid re-ranking based on non-price factors during he auction.
• Amending the valuation formula to benefit non-price factors when considering an applications impact on the CfD budget.
The REA are currently developing a response to the call for evidence and invite members to join a member call this Friday 5th May, 14.30 – 16.00, to discuss the consultation further and feed into our response.
All members involved in low carbon power generation and storage are welcome to attend. Landfill gas members should be aware that this is the same consultation recently discussed in a dedicated members meeting, however you would also be welcome to join this discussion.