United Kingdom: CfD AR4 auction with no contracts for biogas plants and biomass, one waste-to-energy project

The fourth round of British Contracts for Difference (CfD) ended on 7 July 2022. According to the official government website, contracts went to 93 projects with a total capacity of 10,792 MW, mainly photovoltaics, onshore and offshore wind. For biogas and biomass this is a disappointment: they included no anaerobic digestion and no biomass with cogeneration.

How technologies were divided

In CfD, technologies were divided into so-called pots, each with a separate budget. According to the AR4 budget notice of 25 November 2021, pot 1 included, among others, onshore wind, photovoltaics, waste-to-energy with CHP, hydro, landfill gas and sewage gas. Pot 2 grouped less mature technologies: advanced conversion technologies (ACT), anaerobic digestion above 5 MW, dedicated biomass with CHP, floating offshore wind and others. Pot 3 was offshore wind.

Price caps (ASP)

Administrative Strike Prices (ASP) are the maximum rates that a project of a given technology can obtain. In AR4 they were given in 2012 prices:

What won

Seven technologies appeared in the results. Of those of interest to us, the only one was waste-to-energy with CHP: one project with a capacity of 30 MW and a strike price of 45.99 GBP/MWh (in 2012 prices). The same price came out for photovoltaics (66 projects, 2,209 MW). Offshore wind reached 37.35 GBP/MWh. In pot 2, contracts went to floating offshore wind, tidal stream and wind on remote islands.

As the law firm Slaughter and May notes, no contracts went to ACT, anaerobic digestion and dedicated biomass with CHP projects.

What follows from this

In AR4, technologies with very different costs competed for a contract: photovoltaics and wind ended at prices of around 40–46 GBP/MWh, while the cap for anaerobic digestion was 128 GBP/MWh. Anaerobic digestion had a separate category in pot 2 in AR4, but shared its budget with ACT, biomass with CHP and floating offshore wind, and even so no AD project received a contract. For British biogas, other sources of revenue therefore became increasingly important, including support for injected biomethane (the Green Gas Support Scheme) and the settlement of energy exports. We write about the change of system after the feed-in tariff in a separate post on the Smart Export Guarantee.