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To 6 GW… and beyond! Offshore wind in the CfD scheme

Lee Drummee Analyst

The role of Contracts for Difference (CfD) generators in the electricity market continues to expand and Allocation Round 4 (AR4) to be held later in 2021 will expand this role further. By the end of 2020, installed generating capacity supported by the CfD scheme already totalled 5.2GW, providing Great Britain with 22.0TWh of renewable generation. As further projects come online under AR2 and AR3, this Chart of the Week explores those assets scheduled to come online under the scheme in 2021 and their impacts on the wider wholesale electricity market. As of the end of March 2021, operational capacity under the CfD had risen to 5.6GW, with a total of 6.4TWh of generation from these assets during the first three months of the year. Based on the expected start dates of CfD projects from the April 2021 CfD register, operational CfD capacity will rise to 6.8GW by the end of 2021. Using load factor assumptions determined by BEIS in previous CfD allocation frameworks, these plant are then forecast to generate 25.8TWh across 2021. This is almost 10% of total GB generation.   The big driver of this is offshore wind, with almost 3.0 TWh of the forecast 3.8TWh increase coming from this technology. Forecasts indicate that over next winter monthly generation from the CfD fleet could then total between 2.5TWh and 3.0TWh. Whilst this is still only around 10% of monthly demand levels for the winter months, the variable nature of wind generation is increasingly impacting the market over these periods. Already in 2021, we have seen the standard deviation of ...

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