CfD Auction Success
London, September 4th, 2024 – NextEnergy Capital is pleased to announce that all four of its Contract for Difference (“CfD”) auction bids across both its UK Private Fund, ‘NextPower UK ESG’, and in-house development company, ‘Starlight’, were successful in the sixth allocation round (“AR6”) auction announced by The Department for Energy Security and Net Zero on the 3rd of September 2024.
The winning CfD bids by NEC cover the full generating capacity of 165.8MW across four solar assets with solar prices successfully secured at a fixed price of £50.07, representing a £3-4 increase on the same 2012 pricing terms when compared to last year’s fourth and fifth allocation rounds (“AR4” & “AR5”). Approximately 3.3GW of solar capacity was successful in AR6 which makes it the most successful auction to date and another important step forward for the UK’s Net Zero transition plans.
The CfD mechanism was introduced by the UK Government in 2014 to support low-carbon electricity generation by reducing financial risks faced by developers of renewable assets and providing 100% secure, inflation-linked regular income to drive further investment into cheap renewable energy in the UK.
Michael Bonte-Friedheim, CEO and Founding Partner of NextEnergy Group, said:
“Our success in the government’s latest CfD auction further cements NextEnergy Capital as one of the world’s largest specialist solar+ investment managers, with four projects with a generating capacity of c.166MW securing successful bids. The CfD mechanism continues to provide stability to investors in new solar projects in the UK by providing long-term contracted revenues which match the contracted revenue strategies of all NEC funds. The success of the whole AR6 auction should provide further comfort to all investors in the UK renewable infrastructure space.”
Paul Barwell, Head of Energy Sales at NextEnergy Capital, commented:
“The fixed price of £50.07 represents roughly £69.50 in terms of 2024 pricing terms and further demonstrates strong government support towards developers of renewable assets whilst providing a further boost of confidence in the UK renewable energy landscape. This pricing cements new-build solar infrastructure as the cheapest source of decarbonised new-build power generation in the UK.”