- So ministers moved on again. The new scheme employed Contracts for Differences (CfDs) to try to drive down the costs of certain technology “winners” (primarily offshore wind) in a similar manner to NFFO.
- It is too early to say for sure how that will work out, but there is an eerie parallel between the early tranches of NFFO and CfDs, which were expensive but largely delivered, and the later tranches, where prices fell below what were widely-regarded as the thresholds for viability, and deployment consequently disappointed.
- Whilst CfDs may be different for reasons that are not apparent to those who have looked critically at the economics of the favoured technologies, NFFO should at least be a warning not to count the chickens (projects commissioned and run profitably for a few years) before the eggs (contract prices and volumes) have hatched.
- CfDs left Summerleaze in the cold, because (a) they were focused on intermittent technologies, and Summerleaze had always preferred to invest in energy that was there when it was needed, and (b) they favoured scales of investment that were mainly achievable by the government’s corporate clients, beyond the resources of most entrepreneurial SMEs.
