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The role of Onshore Wind in the Green Recovery

Clare E Foster, Head of Clean Energy, Partner, Banking and Finance, Shepherd and Wedderburn

As England faces a month-long lock down, only one thing is certain - no-one can confidently predict what will happen next. More than ever we must look forward and focus on the positive – the opportunity for a green recovery and what better place to start than the clean energy sector and onshore wind. Onshore wind has to be part of the solution to meet the legislative net zero targets and there is plenty of opportunity:

  • to deploy at scale technology proven to produce the lowest levelised cost of electricity, at a lower risk than other technologies;

  • to kick start a pipeline of consented onshore projects which have to date been unable to proceed, as there was no viable route to market for the last five years;

  • to invest - the financial sector has huge appetite for clean energy, and onshore wind falls squarely in the sweet spot - we have a bright green policy signal to the investment community that the UK is supportive of onshore wind; and

  • for the developers and supply chain, with significant economic activity and job creation at a time when COVID has devastated the UK economy and generated recession

The re-introduction of the CfD provides a route to market which was badly needed, but the devil will be in the detail - all eyes will be on pot structure, flexibility in in capacity caps and ideally the allocation rounds will move to an annual basis which is needed if we are to triple onshore wind deployment.

We should also be realistic that the CfD cannot be viewed as the single silver bullet needed to get onshore wind back on track: the CfD strike price for onshore wind is likely to be very low, (albeit as a revenue stabilising mechanism rather than a subsidy it does provide certainty to funders) and we cannot assume that the financial debt structures used 10 years ago will be fit for purpose now. We need to revisit risk appetite and see how merchant risk and corporate PPAs can be structured to best effect. Innovation around market design and structuring will be key to unlocking the opportunities and that will be the focus for the industry, in tackling challenges including investment, planning, grid reinforcement and aviation issues.

It does seem the planets are aligning for a resurgence in the onshore wind market. It will take a concerted effort to reach the deployment figures required (the Committee on Climate Change refer to an increase from 13 gigawatts (GW) now to 35GW by 2035). I believe the challenges facing the onshore wind industry are not insurmountable, and Onshore Wind Energy 2020 provides the perfect opportunity to explore some of the solutions.

I along with my colleagues Colin Robertson, Colin Innes and Liz McRobb look forward to joining you and engaging with industry experts from across the UK in what we know will be an insightful and thought-provoking conference.

Find out more about Onshore Wind Energy 2020 | 03 November | Virtual



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