‘Wave of new investment in independent renewables forecast under FiT CfDs’

Colin Prestwich, Head of Regulation for SmartestEnergy which purchases energy from more than 600 independent generation sites, comments:

Colin Prestwich said:

“We welcome more detail regarding the FiT CfD arrangements, and are pleased that the Levy Control Framework has been set at a reasonable amount. We believe FiT CfDs will be good for independent generators and will encourage more investment by businesses, communities and farmers in renewable energy projects.

“Wind generators in particular are likely to benefit from the greater certainty of income which a CfD provides as it will insulate investors against the increased price volatility which comes from having more variable generation on the grid.

“The single counterparty should give investors more confidence, though there are a few more important details that need to be known. Investors will still be waiting to see what the strike prices are next year before making their investment decisions though.”

Intervention in PPA market now unnecessary

“The guaranteed price for generators offered by CfDs will also see more Power Purchase Agreement (PPA) suppliers enter the market and stimulate competition.

“We expect the market for short-term PPAs to flourish with the introduction of CfDs and strongly believe that any intervention by Government aimed at improving competition will ultimately prove unnecessary.”