Non-UK projects may get CfDs

The UK government is considering offering Contracts for Difference (CfD) support to foreign renewable power generators from 2018.

The Department of Energy and Climate Change (DECC) has released a policy paper on the major issues around such a move, which could reopen the possibility of large-scale export of power to the UK from Ireland.

DECC said: "Opening the EMR CfD scheme to projects from outside UK in due course is an aspect originally announced in 2012. This type of support would be the first of a kind in Europe and, reflecting this, we need to find ways of addressing a number of complex issues."

To date the CfD policy, processes and systems have been designed for projects located in the UK, and will be extended to cover Northern Ireland from 2017.

Opening the CfD scheme to projects located outside the UK, with the "challenges and complexities" that entails, would require most aspects of the EMR policy design to be reviewed, notably the allocation of CfDs, the CfD contract itself, and the supporting institutional framework, said DECC.

"We will need to ensure and if necessary develop eligibility criteria that have a similar policy effect as they do for UK and Northern Ireland projects, without treating non-UK generators unfairly," it added.

The government is "minded" that non-UK renewables applicants would apply for CfDs in competition with UK projects.

Although the subject is not mentioned by DECC, policies on future support arrangements between the UK and foreign generators could become even more complex if Scotland votes for independence in a referendum next month.

In 2013 a Memorandum of Understanding was signed between the UK and Ireland to explore the benefits of renewable trading between the two. But earlier this year, the plans lost momentum after the Irish energy minister confirmed no early deal was possible.

Three Irish developers had announced large renewables projects for export to the UK  –  Bord na Mona, Mainstream Renewable Power and Element Power.