Contracts for Difference (CfD) amendments: consultation response

Published: 12 March 2018

Energy Systems Catapult and the Energy Technologies Institute welcome the opportunity to respond to the Department for Business Energy and Industrial Strategy (BEIS) consultation on proposed amendments to the Contracts for Difference (CfD) scheme.

BEIS is seeking views on proposed amendments to the CfD scheme, which provides support for new low carbon electricity generation projects, to enable it to continue to support new generation and provide best value for bill payers in coming years.

The ETI and ESC’s response focuses on its expertise in bioenergy and gasification and is informed by its work in modelling low-carbon energy system transitions.

Key points

  • The ETI and ESC support the proposal to update the definition of gasification to encourage deployment of more innovative designs. We believe that incentivising gasification systems, which use clean syngas to deliver higher efficiencies, could be used to produce other energy vectors such as heat, biomethane and fuels. It is the flexibility which makes gasification an important, scenario resilient technology.
  • The ETI and ESC do not believe that the proposed approaches, as presented, will have the desired effect and believe this could create unexpected and undesirable side effects. Our view is that only a criterion that requires clean syngas to be produced at a point before use in generation will incentivise the innovations required to deliver significant future benefits, and our recommendations are based on this position.

The greenhouse gas criteria under the CfD should encourage the use of feedstocks that deliver the greatest overall carbon reductions. However, the greenhouse gas criteria calculation does not include carbon stock change or displacement effects. The ETI and ESC appeal to BEIS to reconsider the extent to which the limit is reduced if presented with evidence demonstrating that feedstocks could deliver a carbon saving when carbon stock change and displacement effects are taken into account.

This publication sets out the written evidence submitted by Hannah Evans (Bioenergy Practice Manager) on behalf of the ESC and Geraint Evans (Bioenergy Programme Manager) on behalf of the ETI.