This month saw a letter sent to Boris Johnson signed by 157 Members of Parliament (35 Conservatives among them), urging the Government change its course in relation to onshore wind.
This isn’t particularly surprising in itself – it is now generally accepted that onshore wind represents the cheapest form of renewable electricity available – but what it highlights once again is that we are yet to answer some of the big questions facing the sector to create long-term certainty and visibility once and for all.
The real question is: are the right policies in place to ensure short-term growth for onshore wind and rapid growth in the number of schemes being developed, particularly in the context of the Net Zero ambitions for 2050?
Thus far, the Government’s response has been to say that onshore wind can now rely on merchant projects (where the projects live with the risks associated with long term power pricing that underpin their revenues) and projects which rely on corporate power purchase agreements (PPA) where large corporates pay for the generated power at prices which give developers and their funders sufficient revenue certainty.
There can be little doubt that what is commonly known as the “subsidy free” market is taking off.
There are developers leading the way, speaking publicly about merchant projects in certain parts of the country as well as those supported by a corporate PPA.
That said, it is similarly inarguable that allowing onshore wind to compete in the public CfD auctions would accelerate deployment rates considerably, re-opening the door more quickly for project finance debt to be deployed in support of new low cost development (at a time when that debt tends to be restricted to projects supported by the relatively illiquid corporate PPA market and is generally absent from the merchant market).
This view is shared by many, not least Banks Renewables who this month launched a legal challenge against onshore wind’s exclusion from the CfD auctions.
What is also often overlooked in debate around our clean energy targets is the fact that our existing renewables capacity will start to reach the end of its natural design life within the relative near term.
The process of “repowering” (where turbines are replaced – perhaps with taller, more powerful versions now available on the market) will begin in earnest as we proceed through the 2020s.
By 2050, all of our existing capacity will need to have been considered from this perspective.
We therefore need not only policy certainty to provide the platform for what is required here, but a planning system which is ready to handle the repowering that will be required to get us there.
The Prime Minister undoubtedly has a lot on his plate, but decisive action to support clean energy, including onshore wind, needs to be near the top of his to-do list – the fight against climate change, the future of the UK’s energy system and our ability (or not) to meet our Net Zero ambitions depends on it.
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