UK proposes extending low-carbon power generation support scheme

By Nina Chestney

LONDON, May 14 (Reuters) - The British government is proposing extending its support for low-carbon power generation through the contracts for difference (CfD) scheme which guarantees a minimum price, until the end of March 2030, it said on Thursday.

Under the CfD scheme, qualifying projects are guaranteed a strike price, at which they can sell electricity, and renewable power generators bid for CfD contracts in a round of auctions.

It has awarded contracts to about 16 gigawatts of new renewable power capacity so far. The next allocation round of contracts is scheduled for 2021.

In a consultation document, the government said: "In order to ensure the scheme can continue to support new low carbon electricity projects in the future, the government is also proposing to extend the CfD scheme delivery years until 31 March 2030."

The government said higher levels of wind deployment will be needed to meet its 2050 net zero emissions target. Therefore, it is considering to help floating offshore wind projects get to commercial deployment.

"We are proposing that floating offshore wind is classified as a separate technology with a distinct administrative strike price, so that projects may compete in future auctions for less established technologies," it said.

Among other proposals, the government is considering excluding new coal-to-biomass conversions from future rounds of the scheme.

The consultation closes on May 29, after which the government will analyse the responses.

(Reporting by Nina Chestney; Editing by Kirsten Donovan)