The Aldersgate Group has renewed calls for subsidy-free Contracts for Difference (CfD) auctions to be introduced.

The influential business group today published its own manifesto report, dubbed ‘A healthy environment, a competitive economy’, as the country’s political parties begin to ratchet up their general election campaign.

Alongside central calls for the urgent publishing of a detailed clean growth plan and the development of a low carbon industrial strategy, the group has brought back calls for the introduction of so-called subsidy-free or market stabilising CfDs for mature technologies.

Ever since the Conservative government excluded solar and other ‘pot one’ technologies from competing in future CfD auctions the prospect of subsidy-free alternatives has been mooted.

In February last year then-energy minister Andrea Leadsom said that her department was consulting with the renewables industry over what it had termed “market stabilising CfDs”, but warned that the lead time to develop such a policy would be lengthy.

At the time the industry speculated as to how such a policy would work in practice, with one particular option being that the government would only pay support equivalent to that of a new-build gas project connected at the same time. While the project would technically be supported financially, it would not constitute a subsidy as it would not receive a premium above that of the cheapest energy generation available.

The Aldersgate Group says the introduction of such CfDs would help decarbonise the power system in “the most cost-effective way”.

Also included in the group’s manifesto are calls for a “suitable replacement” of the Levy Control Framework – timely as an announcement was expected within March’s budget statement, but was pushed back until the autumn – and continued support for more flexible power solutions including energy storage.

Nick Molho, executive director at the Aldersgate Group, said the government must not “neglect the importance” of ambitious low carbon and environmental policy.

“The UK has significant strengths across the low carbon economy, a market which is already worth over $5.5 trillion globally and is rapidly growing following the Paris Agreement on climate change. The next five years are a unique opportunity to consolidate the UK’s competitive advantages and put its businesses in the best possible position to tap into growing export opportunities,” he said.

His stance was echoed by Steve Waygood, chief responsible investment officer at Aviva Investors, who said the provision of ambitious climate policies by the next parliament was “essential”.

“We need policies to direct capital towards the resource efficient and low carbon infrastructure that the UK so urgently needs to build in order to maintain a globally competitive and resilient economy,” Waygood added.

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