A new report from the National Infrastructure Commission (NIC) argues that onshore wind power projects should be allowed to participate in the Contract for Difference (CfD) auction scheme again. Following a government decision in 2015, such projects were excluded from the second CfD auction in 2017.
When participating in the CfD auction process, operators make bids in terms of proposing a fixed cost per megawatt hour of electricity generation. Once a winning project goes online, operators are paid the difference between the agreed price and the market price. While this encourages electricity generators to invest in low-carbon technologies based on guaranteed returns, it also helps protect consumers from higher prices when wholesale electricity costs increase.
While both offshore and onshore wind power have benefited from advances such as cheaper production, advanced lubricants like those from Mobil UK stockists, and larger turbines, onshore wind power is believed to offer the best value for consumers. Many even believe well-placed onshore windfarms could effectively operate subsidy free, with guaranteed pricing only being needed to protect generators from volatile wholesale prices
The NIC report also proposes raising the country’s 2030 target for renewable electricity generation from 30% to 50%, with a long-term aim of reaching 70¬–80% by mid-century. It also highlights how strict planning regulations could also hinder the progress of onshore wind power in England.
The government must now issue a response to the report within six months, although it is not obliged to implement its recommendations.