Onshore wind ‘to be cheaper than new gas generation’ in Scotland

wind_farmA report by leading think tank Policy Exchange, has demonstrated that onshore wind is on course to be cheaper than new gas generation in Scotland.

Policy Exchange’s report Powering Up: The future of onshore wind in the UK estimates that the cost of onshore wind should fall to £60/MWh by 2020 as a result of using technology advances and a focus on sites in high wind speed areas of the country – predominantly Scotland.

This continuing cost reduction make onshore wind cost competitive with new gas plant and significantly cheaper than other options, including nuclear.

 

The report recommends ways for onshore wind to continue on a subsidy free basis as part of the UK’s Contract for Difference scheme. It highlights that this would effectively signal an end to onshore wind development in England. In the first CfD round, 10 of the 15 projects were located in Scotland, accounting for 73% of the total capacity, with the remainder in Wales (24%), and England (3%). Support for onshore wind is significantly higher in Scotland (71% of the public are in support) than in England (support drops to 61%).

The paper puts forth a number of proposals including:

  • Fast-tracking the Energy Bill to minimise uncertainty for onshore wind developers
  • Allowing new and repowered onshore wind projects to participate in renewables CfD auctions
  • Capping and reducing the amount paid to new and repowered onshore wind projects, such that they effectively become ‘subsidy free’ by 2020
  • Increasing community ownership and community benefits from onshore wind

Maf Smith, Deputy Chief Executive, Renewable UK, commented: “Onshore wind is the lowest cost option for Government if we are to de-carbonise and replace old capacity set to close over the next few years. Onshore wind is supported by a clear majority of the British public and is a great British success story, delivering high UK content and investment into the UK economy. The further north we go in our economic powerhouse, the greater the economic importance of onshore wind.

“Industry shares Government’s ambition to end subsidy and this report confirms that onshore wind has now arrived at the point where it can compete head to head with high carbon alternatives like gas. The challenge is how Government supports onshore wind moving into a competitive market place.”

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