Lift onshore wind CfD cap to help end gas generation

The cap on onshore wind in the upcoming Contracts for Difference (CfD) auction should be lifted, the renewables sector has urged, as part of a five-year plan to end dependence on gas for electricity generation.

RenewableUK’s Renewable Energy Response Plan, which has been published as the government prepares to unveil its own energy security blueprint later this week, proposes replacing gas-fired  electricity generation with new renewable energy options within half a decade.

Measures in the RenewableUK plan include removing the limit imposed on the amount of onshore wind capacity eligible for the next CfD auction, which is due to go ahead later this year.

The government announced last September that £10 million worth of CfDs have been allocated for onshore wind and solar projects up to a ceiling of 5GW of generation capacity.

The plan also proposes raising the £200 million CfD budget available for offshore wind on the grounds that more projects are now shovel-ready than at the time of the government’s announcement in September.

To boost the pipeline of capacity in CfD auctions from 2023 onwards, RenewableUK’s plan says the government should slash the time taken to decide planning applications for offshore wind projects from the current minimum of two to three years and replace it with a new one-year statutory timeframe.

This should be backed up with “urgent” reform of the planning regime for onshore wind in England, which RenewableUK says is blocking nearly all new projects from going ahead.

In addition, Ofgem should tackle the “enormous disparities” in the way renewable energy generators are charged for using the grid, which can be 15 times more expensive in Scotland than in England and Wales, according to RenewableUK.

The plan would unlock a further 25% growth in renewable power by 2030 on top of the rapid expansion already set to take place this decade, claims the renewables umbrella body.

Dan McGrail, chief executive of RenewableUK, said: “We can start on this by doubling down on what we can get in this year’s clean power auctions, to protect consumers from global price shocks in the future.

“If we remove the cap on cheap onshore wind and solar capacity in this auction, then shovel-ready projects could be generating power by next year. And we risk being penny-wise but pound-foolish if we don’t take this opportunity to invest a small amount extra in offshore wind for a huge payback to consumers, alongside growing our domestic supply chain.

“There’s a pressing case for Ofgem reforming grid charges for renewable generators, as the current system actively deters investment in some of the UK’s largest and most productive projects at a time when we desperately need new power sources.”

Also ahead of the energy security plan’s publication, the government announced today that it has commissioned the British Geological Survey to advise on the latest scientific evidence around fracking.

The move potentially opens the door to a lifting of the moratorium on shale gas extraction, which was announced in November 2019 by then minister of state for energy Kwasi Kwarteng, due to concerns about the risk of earthquakes resulting from hydraulic fracturing operations.

The government says a report is expected before the end of June on whether there is any further evidence that shale gas extraction can be carried out safely.

Both announcements follow yesterday’s publication of the latest report from the Intergovernmental Panel on Climate Change (IPCC).

It says that while the levelized costs of wind and PV solar have been falling over the last decade, those of nuclear power have risen.

The IPCC report adds there are ‘fewer opportunities’ for cost reductions in nuclear and carbon capture and storage (CCS), which typically rely on large plants, than in smaller and more modular technologies like wind and solar.

However, the report says carbon dioxide removal methods, like CCS and direct air capture, will be required to counterbalance residual greenhouse gas emissions in the energy sector.

It adds that electricity systems powered predominantly by renewables are becoming “increasingly viable” although it will be ‘more challenging’ to use these sources of power to supply the entire energy system.