The UK government has announced the reinstatement of ‘Pot 1’ technologies such as onshore wind and solar PV for the next Contracts for Difference (CfD) allocation round in 2021.
According to Cornwall Insight’s Renewable Pipeline tracker this round’s competitiveness among ‘Pot 1’ technologies is likely to be as follows:
Calculations show that 13 GW of the pipeline could potentially be eligible.* This is split between 5.5 GW of ‘Pot 1’ technologies, 6 GW of offshore wind and a smaller proportion of ~1 GW for ‘Pot 2’ technologies, with a significant proportion being Remote Island Wind (RIW).
The heat map shows the concentration of the potential successful projects. This indicates that of the potential CfD allocation round pipeline, a large majority of which is located in Scotland.
James Brabben, wholesale manager at Cornwall Insight has commented that “the results are revealing not just from a commercial perspective but on the interactions of wider policy and network charging”.
“The onshore wind capacity totals 4.2 GW, a high figure considering the ~13 GW in operation currently. Of this, over 3.8 GW is in Scotland, highlighting the continued concentration of sites here.
“Scotland is also home to all of the RIW pipeline, which totals 900 MW. Dominating this is the potential 450 MW Viking wind farm development on the Shetland Isles. With offshore wind carved into a separate ‘Pot 3’, RIW projects could be in a more competitive position when compared to previous auctions.
“Although the auction is set to be a competitive one, the location of potential applications may cause other issues such as high Transmission Network Use of System (TNUoS) costs for larger sites in Scotland, differences in load factors and site conditions and wider financing and strategic factors at play from project sponsors.
“The pipeline may also change as we head through to 2021. Particularly as some sites continue to look at subsidy-free and merchant options instead, while new sites may also join the queue for the CfD.”
Notes regarding the calculations
- The calculated total pipeline of over 37 GW across 800+ sites was filtered into those “most likely” to bid.
- These “most likely” are categorized as all CfD eligible technologies which have applied for or gained planning permission, or re-applied for and gained permission, post all subsidy scheme changes and closures. Effectively this is from early 2019 onwards.
- Cornwall Insights believe these projects are most likely to be competitive in the auction, as prior to the recent BEIS announcements they would have been aiming to operate subsidy free anyway.
- A separate calculation is made for offshore wind, with all sites likely to be able to build by the delivery years of the next round, likely 2024 to 2026, included.
- The differing scales of projects means there will be a mix of transmission and distribution connections, but their map groups these to align to the 14 distribution regions in order to visually display all of the data on one map.
- Concentrations in each zone therefore represent both larger transmission and smaller distribution connected sites, including offshore wind.