Onshore wind without net subsidy
A Report commissioned by Scottish Renewables from Baringa Partners, a business and technology consultancy, has identified that an additional 1GW (equivalent to 20 large windfarms) of onshore wind could be delivered under the Contracts for Difference mechanism with no net subsidy. Under the CFD regime projects are paid by the Low Carbon Contracts Company (“LCCC”) the difference between an auction strike price and the day-ahead wholesale price at the time of generation. If the wholesale price exceeds the auction strike price a payback is required by the operator of the windfarm. The Report calculates that payouts by the LCCC of £8m per annum in the first 5 years would be more than offset by £7m per annum of payback in the remaining 12 years of CFD’s, all on the basis that wholesale prices for electricity rise and that the strike price is set at £49.40 per MW hour in real 2017 terms.
