The UK government has launched a consultation seeking views from industry on how to make supply chains across the low-carbon electricity generation sector more competitive, productive and efficient as part of the Contracts for Difference (CfD) scheme.
Consultation proposals include more rigorous questioning and scoring of questionnaire responses, along with introducing an interview – allowing for greater scrutiny of CfD applications – and raising the pass mark to make qualification more robust.
The potential changes will ensure generators commit to a range of actions to increase competitiveness of supply chains, driving down the cost of energy generation, the UK government said.
UK Energy Minister Greg Hands (pictured) said: “The Contracts for Difference scheme has helped the UK become a world leader in renewable energy, drive down costs and reduce our exposure to volatile global fossil fuel prices.”
The consultation also includes a suggestion to extend the Supply Chain Plan process to cover some emerging renewable energy technologies, including floating offshore wind.
The aim is to ensure supply chain plans are included for technologies expected to experience significant growth and mass deployment in the next CfD round.
Supply chain plans are the government’s main tool to ensure CfDs can grow the low-carbon economy.
The plans are put forward by developers of projects that have a capacity of 300MW or more in their CfD application and assessed in a questionnaire before they can compete in the CfD auction.
In the CfD questionnaire, applicants choose the supply chain plan commitments they wish to make, these are then tested for quality and ambition ahead of an application being passed, while ensuring the UK fully abides by its international obligations set out by the World Trade Organisation and in the EU-UK trade agreement, the government said.
It added that the changes will help ensure the fifth CfD round delivers increased benefits when it opens in 2023.
Business and Energy Secretary Kwasi Kwarteng has the ability to terminate a contract as a last resort if generators do not fulfil the supply chain plan commitments they have made.
The consultation is also inviting views on excluding sites from future application either for not signing the contract offered or for termination of the contract before or for failing to meet the delivery milestone.
The government is also launching a Call for Evidence seeking views on the potential for further changes to supply chain plans for future allocation rounds.
