British government caps prices for wind and solar power

The British government has presented key points for an energy price law which includes a price cap for electricity from renewable energy plants and nuclear power plants. Unless such plants are remunerated via contracts for difference (CfD), a fixed price is to be introduced under a cost-plus-revenue model »to stop volatile and high gas prices dictating the cost of electricity produced by much cheaper renewables.« A voluntary opt-in for CfD models, where revenues generated above an agreed fixed price are paid back, is also to be part of the legislative package. The measures are to take effect from the beginning of next year for a limited but unspecified period. Details on this »will be subject to a consultation to be launched shortly.«
The British solar industry association Solar Energy UK criticized the »in haste«-announcement. Especially for operators of smaller plants, »who have been excluded from ministerial discussions so far«, the effects are unclear without the announcement of details. Separating low-cost renewables from gas-fired generation price trends is in the interest of consumers and generators, Solar Energy UK says, and the renewable industry is »ready and willing« to participate in this. However, the government's current announcement sends »another very bad signal to investors.«
Solar Energy UK and Renewable UK had in early September expressed their explicit support for a proposal to transfer ongoing fixed feed-in tariff contracts to a new CfD-based system.

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