Onshore wind farms could deliver power to consumers at a lower cost than high-efficiency gas plants if given access to contracts for difference, according to a new report by consultancy firm Arup. The research, commissioned by Scottish Power Renewables, found that onshore wind projects could be built with a strike price of no more than £50 to £55/MWh, making them effectively “subsidy-free”. The report says this would be a suitable range for an administrative strike price – or strike price cap – for a “market stabilisation” contract for difference (CfD), which would be designed to give developers the certainty afforded by a guaranteed price whilst offering no overall subsidy. The range is based on two different calculations of the level of a “subsidy-free” strike price. In the first instance, a figure of £47/MWh was reached by forecasting the revenues which could be generated by onshore wind projects in the wholesale, balancing and ancillary services markets and subtracting the cost of integrating the projects into the power grid.
Utility Week 25th July 2017 read more »