The UK government could deliver 1GW of new onshore wind capacity at no additional cost to consumers over and above the long-term wholesale price of power, according to a new report for Scottish Renewables.
The report - An analysis of the potential outcome of a further ‘Pot 1’ CfD auction in GB - was produced by Baringa Partners. It said that delivery is dependent on mature renewables being able to bid in auctions for long-term contracts.
An auction would result in further reductions in the cost of onshore wind, which the UK government already believes to be on track to be the lowest cost form of electricity generation in the UK, Scottish Renewables said.
The report said the auction is expected to clear at £49.40 per megawatt hour.
However, the current auction process is not open to onshore wind or solar power.
Scottish Renewables said: “Successful onshore wind projects would receive limited ‘top-up’ payments over and above the wholesale price of power in the first years of their operation, but would then pay back a greater amount to the public purse over the remainder of their contract as the wholesale power price increases.”
Scottish Renewables chief executive Niall Stuart said: “The UK government has already published research showing that onshore wind is on track to be the cheapest form of electricity generation in the UK, and this report shows that the industry is continuing to drive down costs.
“The study’s findings reinforce that onshore wind can make a significant contribution to ministers’ ambitions for the Industrial Strategy.
“However, the report also shows that we will only deliver those benefits at scale if onshore wind and other mature renewables are able to bid again for long-term contracts for clean electricity generation.”
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