UK consultancy Cornwall Insight has urged energy department BEIS to introduce a price floor to support construction of onshore wind and solar projects.
In a letter to Energy Minister Claire Perry, the Norwich outfit said the UK government would miss “steepening demands imposed by carbon budgets” unless it “urgently re-examines its policy for mature and established renewable technologies”.
“Whilst there have been significant reductions in costs in onshore renewable technologies, this does not make investments credible in projects if they are to rely predominantly on wholesale power price signals,” wrote chief executive Gareth Miller.
Under Cornwall Insight’s Contract for Difference floor idea, a generator would receive protection against wholesale reference prices below a guaranteed price.
The generator would only be able to realise upside in power prices above the floor price to the extent any sums received under the floor had been fully repaid first.
The consultancy believes the floor could be delivered with “minimal changes” to how CfDs are currently auctioned and administered.
The letter to Perry was backed by developers including Airvolution, Eneco and Fred Olsen Renewables plus trade bodies Renewable Energy Association and Solar Trade Association.
“Representatives of our group would welcome the opportunity to discuss our proposals with you or senior officials at the earliest opportunity, noting the relevance to the ongoing five-year Electricity Market Reform review and the anticipated white paper during 2019,” added Miller.