Arup has found a so-called market stabilisation Contract for Difference is “urgently needed” to bring forward investment in UK onshore wind.
Research carried out for ScottishPower Renewables showed a CfD strike price cap in the region of £50-55/MWh would enable delivery of onshore wind to the consumer at a similar price to that of a new gas-fired power station.
Arup head of economics Filippo Gaddo said: “Onshore wind investors are fully exposed to fluctuations in the wholesale electricity price, increasing the risk and cost of investments.
“Access to a market stabilisation CfD mechanism would make a significant difference to driving efficiency – ensuring that the UK’s transition to low carbon generation progresses in the most cost effective manner.”
SPR policy director Lindsay McQuade added: “Arup’s report clearly shows that access to a market framework would enable onshore wind to continue delivering cheap electricity some £40/MWh cheaper than new nuclear against the proposed strike price cap of £50-£55/MWh.”
The ‘Enabling Investment in Established Low Carbon Electricity Generation’ report is available to download here
Image: Whitelee wind farm (SPR)
