Along with industry, we welcome the recent consultation on allowing onshore wind and solar to compete for CfD’s in future Allocation Rounds, the next being scheduled for 2021.
While we believe that these industries would thrive even where they’re not permitted to compete, it would not at the rate required to support the more ambitious targets which government has set. Therefore, it’s reassuring to see Westminster in agreement with this assessment.
Similarly, we welcome the UK Government’s approach to diversity of technology and associated geography.
For instance, allowing floating offshore to compete as a separately defined technology is positive as is an acceptance that system flexibility, including the efficient integration of battery storage, is critical.
The suggested move of offshore wind into its own pot is also potentially positive – for both offshore wind, where like will be compared with like, and the other less established technologies – as this will allow them to compete on a more even playing field.
This move should be welcomed by the industry as recognition of the excellent work achieved in making offshore wind more established and driving down costs, so much that other less established technologies were priced out of previous rounds.
Industry will be keen however to hear more detail around what capacity caps and administrative strike prices Government proposes.
A read of the figures in the consultation, which BEIS is keen to stress are illustrative only, might nonetheless give a sense of direction of travel.
Those numbers appear to indicate 1GW of onshore wind and solar procured at prices of £33-34 per MWh, 2012 prices, with offshore wind at 5.5GW priced at c£45 per MWh.
Linked to the level of capacity caps is the suggestion in the consultation that these caps might become more flexible or “soft”.
Again, we view this as a positive move in principle as it should ensure that a large project which is “last in the door” and would otherwise exceed the cap isn’t ruled out automatically simply on that basis but is instead reviewed against wider considerations including value for money.
A clear gap in the consultation is any indication of how planning rules in England might be changed to accommodate and even encourage more onshore wind development.
The current planning regime in England largely prevents further onshore wind development.
Developers will be keen to track any updates in this space, and it is certainly a key point we expect to see in responses from industry after the consultation closes on 22 May 2020.
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