Onshore wind cost of capital report-cover

Cost of Capital Benefits of Revenue Stabilisation via a Contract for Difference

We need to see major changes in the way the United Kingdom (UK) produces, manages and uses energy. This is essential to achieving the UK Government’s three energy objectives of decarbonisation, security and affordability. 

Onshore wind plays an important role as part of the renewable energy mix in the UK and in 2017 it provided 31.7% of renewable capacity. The capital-intensive nature of onshore wind projects, combined with the wholesale electricity market exposure, means the investment case for onshore wind technology is challenging without a form of revenue stabilisation to mitigate wholesale market risk.

Arup was commissioned by ScottishPower Renewables to explore how a Contract for Difference (CfD) can impact onshore wind financing. 

Read the report to find out how revenue stabilisation via a CfD can increase the appetite of investors and the availability of finance as it reduces wholesale price risk. The increased certainty improves project viability and also allows investment to come forward at a lower cost of capital, lowering the levelised cost of energy for an onshore wind project by between £6/MWh and £12/MWh relative to position where no stabilisation is provided. 

Download the report: