Government’s decision to unlock onshore wind underlines their commitment to reach net zero emissions
02 March 2020
Posted by: Rob Norris
RenewableUK is welcoming the Government’s announcement that cheap onshore wind projects will be allowed to compete for contracts to generate clean power. Onshore wind has a key role to play in helping the UK meet our net zero emissions target at the lowest cost for consumers.
A new Contracts for Difference (CfD) auction will allow cheap renewable sources like onshore wind and solar to compete for contracts which enable new projects to be financed – the first such auction since 2015. In order to meet our net zero emissions target, the Committee on Climate Change advised Government that the UK needs to quadruple the amount of power we generate from renewables. Last year, in the absence of these contracts, just one new onshore wind farm was completed in the UK.
Further detail on the size and timing of the auction is needed, but it is expected that the auction would deliver new capacity at the kind of low prices seen last year in a similar auction for offshore wind, which secured contracts at below the current wholesale price of electricity.
A new auction will allow the pipeline of shovel-ready onshore wind projects – those that have already gone through the planning system and secured consent – to compete for contracts to provide new renewable generation capacity. It is vital that the UK secures new power sources to meet net zero and avoid an energy gap as coal power ends in 2024.
The popularity of onshore wind has grown in recent years and the latest Government polling shows 78% public support, with just 6% opposed.
New onshore wind can bring billions of pounds of new infrastructure investment that will create new jobs and benefits to help level the economy. Already onshore wind powers the equivalent of over 8 million homes a year and the industry supports over 13,000 UK jobs. There is widespread backing from business and environment groups for developing low cost onshore wind, including the CBI and Make UK, as well as the National Farmers Union and the RSPB.
RenewableUK’s Chief Executive Hugh McNeal said: ““The Government is pressing ahead with action to meet our net zero emissions target quickly and at lowest cost to consumers and businesses. Backing cheap renewables is a clear example of the practical action to tackle climate change that the public is demanding, and this will speed up the transition to a net zero economy. As one of the UK’s cheapest power sources, new onshore wind projects will be a huge boost for jobs and investment in local economies across the UK”.
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2. A report by BVG Associates “The Power of Onshore Wind” (June 2018), commissioned by ScottishPower Renewables, innogy, Statkraft and Vattenfall, showed that five Contract for Difference auctions (each for 1GW of capacity) would deliver a strike price of £49.40/MWh in 2019 in 2017 prices, falling to £45/MWh in 2025. This would provide a £1.6 billion net payback to the consumer over the 15-year CfD period
3. A study by Baringa (2017) showed that onshore wind would clear at a strike price of £49.40 per MWh in 2017 prices. There would be a net payback to consumers over the lifetime of such projects, because this is cheaper than the projected wholesale price of electricity.
4. Comments from a wide range of organisations calling for onshore wind to be allowed to compete in CfD auctions can be found in this blog “Voices in support of onshore wind”
5.The 2019 CfD auction results for offshore wind are available here. A RenewableUK blog on CfD auctions by our Head of Policy and Regulation Rebecca Williams is available here.
6. More details on onshore wind deployment last year, including the one projects which went ahead under previous Government policy, are available here.
7. The Committee of Climate Change report on Net Zero (May 2019) is available here.