RUK Cymru head welcomes UK Government announcement on Contracts for Difference

The UK Government has reversed its five year policy of excluding onshore wind and solar energy projects form competing for ‘contracts for difference’ for development of renewable energy projects.

The Contracts for Difference scheme is the UK government’s main mechanism for supporting new renewable electricity generation projects in Great Britain

RUKC has consistently advocated for re-admitting onshore wind and solar to the mechanism given the rapid fall in costs which now make onshore wind the cheapest form of renewable electricity, with a maximum Levelised Cost of Energy (LCOE) of around £49.4/MWh for projects commissioning in 2021 – lower than any fossil-fuelled power. [1]

Commenting on the development, Rhys Wyn Jones, Head of RUK Cymru said,

“This is a very welcome move, and it’s good news for consumers. Providing a clear revenue stabilisation pathway for what is the cheapest form of renewable energy generation has to be the logical response to the clear and imminent challenges we face.

Deep decarbonisation of power, heat and transport require a quadrupling of renewable energy generation and we simply cannot afford to overlook the contribution proven and fast improving technology such as onshore wind can make.”

It is only a part of what we need to do to meet our netzero challenge and we need to see further detail on the size and timing of the auction, but today’s announcement will be welcome news for our members.”

[1] £49.4/MWh is the forecasted strike price for Onshore in a CfD auction, assumed to be the highest LCOE at the time of the auction; BVG Associates (June 2018) The Power of Onshore Wind