Contracts for difference

  • Low carbon generation

    Learning curves and the many moving parts of the CfD Auctions

    Learning curves are an important part of the toolbox of energy system modelling, representing the benefits of learning by doing and the economies of scale. The learning rate describes how as production doubles capacity cost reduces, so a learning rate of 15% would imply that as production doubles, costs would...

  • Energy Market Design

    Are prices going to rise in Contracts for Difference Allocation Round 5?

    A number of factors may be about to put an end to the trend for falling energy prices in the Contracts For Difference (CfD) scheme. The CfD scheme has provided strong subsidy support whilst also providing consumers robust levels of protection. High investor confidence and steady reductions in capital costs...

  • Energy Market Design

    Financing Net Zero: A (revenue) cap on UK merchant financing opportunities?

    On 13 October 2022, we hosted the latest instalment of our ‘Financing Net Zero’ webinar series. The session, sponsored by Shoosmiths, focused on opportunities and challenges for merchant financed renewable projects amid the current wholesale price volatility.   In recent years, due to the increasing success-rate and profitability of renewable projects,...

  • Regulation and policy

    Government to consult on the introduction of Cost-Plus-Revenue Limit

    The government issued its Energy Prices Bill on 12 October. The bill will put in law a number of the already-announced mechanisms that will be used to support households and businesses this winter including the Energy Price Guarantee and the Energy Bill Relief Scheme. Also announced alongside this is the...

  • Energy Market Design

    How does REMA impact energy generation, flexibility and consumers?

    The Review of Electricity Market Arrangements (REMA) is the largest review programme of GB electricity market arrangements for a generation. It comes at a time when European energy markets are suffering extreme turmoil. Depending on the outcome there could be significant implications for generators, flexibility providers, and, indirectly, consumers. REMA...

  • Energy Market Design

    REMA: electricity market design choices

    Electricity markets will serve as the foundation for the future GB energy system.  This article examines some of the market design decisions that will be considered by the Review of Electricity Market Arrangements (REMA). Market design goals At its most simple, a well-functioning market will attract enough potential “buyers” and...

  • Low carbon generation

    Head to Head: CfD vs RESS

    2022 has been busy for renewable developers in Great Britain and Ireland, with both the fourth allocation round of the Contracts for Difference (CfD) scheme and the second round of the Renewable Electricity Support Scheme (RESS) concluding this summer. We compared the latest results of the CfD and RESS schemes...

  • Low carbon generation

    Energy System Reform: Ofgem shares plans for Britain’s energy system

    Against the backdrop of record high and volatile energy prices, Ofgem set out on 8 July its view on key aspects of the GB energy system where it considers significant reform is required to deliver a resilient, low cost, low carbon energy sector. Recent developments in the energy market, such...

  • Energy Market Design

    Can we fix the wholesale energy market this winter to lower prices and should we want to? 

    The Review of Electricity Market Arrangements (REMA) is intended to discuss and decide on appropriate market arrangements for 2035 in a Net Zero, low marginal cost, renewables-dominated market. It is unlikely it has the scope or capability to intervene in the market arrangements ahead of this winter. Therefore, some new interventions...

  • Low carbon generation

    3G meets in-person| Lots discussed in our low carbon user group

    Last week I took a trip to sunny central London to attend Cornwall Insight’s Green Generators Group (3G), which is the user group for our low carbon generation service. In what felt like a novelty after a two-year hiatus of face-to-face forums, I was joined by my colleagues Dan Starman...

  • Low carbon generation

    CfD Auction Secures Greatest Amount Of Renewable Capacity To Date

    Yesterday, the government released the results of the fourth round of the Contracts for Difference (CfD) scheme, securing almost 11GW of renewable capacity across 93 projects, nearly double the 5.8GW awarded in Allocation Round 3 in 2019. The greatest capacity – at 7.0GW - has been secured from new offshore wind projects,...

  • Low carbon generation

    RESS 2 – Five key insights

    Higher costs drive up auction clearing price It’s been a tumultuous couple of years since RESS 1. As the world recovers from the COVID-19 pandemic and the conflict in Ukraine continues, stresses and strains are being felt across many sectors of the economy, and infrastructure is no exception. Pent up...

  • Home supply and services

    Windfall taxes are not the only solution to the energy crisis

    The energy market is in a state of transition, with geopolitical concerns threatening to undermine energy security and subsequent wholesale energy rises pushing up bills. It is inevitable that policymakers will look at how best to deliver an affordable energy system for consumers. The temporary, targeted energy profits levy, or...

  • Energy storage and flexibility

    Unlocking routes to market

    On 19 January 2022, a webinar hosted by Cornwall Insight in partnership with the law firm Weightmans focused on routes to market for renewable projects that may not secure a contract during the fourth allocation round of the 'Contracts for Difference' (CfD) auction, which opened in December 2021. In the...

  • Low carbon generation

    Our Renewables Pipeline Tracker: In with the new – scoping projects and progression through planning stages

    Our latest Renewables Pipeline Tracker was published on 11 June, and this blog provides a summary of some of the recent developments in our coverage of the pipeline for new build and repowering renewables assets in GB. What’s new? Seabed leasing rounds, scoping projects and CfD announcements Since our previous...

  • Low carbon generation

    Renewables Pipeline Tracker: Higher, faster, stronger – the changing nature of offshore wind

    Having released our October 2020 Renewables Pipeline Tracker report, which covers the latest developments for pipeline renewables sites across GB, this blog explores our recent findings on the pipeline and in particular offshore wind. The Renewables Pipeline Tracker is updated quarterly and includes information across over 1,000 prospective renewables sites...

  • Home supply and services

    COVID-19-driven changes to electricity Third Party Charges

    The impact of COVID-19 on the energy sector has been a hot topic for the last few months. As we progress further into the UK’s lockdown period we are now beginning to piece together the wider picture of effects across energy Third Party Charges (TPCs). These impacts are expected to...

  • Low carbon generation

    Lessons from a lock down

    We are all facing a new, simpler existence. For my part, I have been self-isolated for three weeks. My little flat in central London has become almost my entire existence, my days have settled into a simple routine, and I've had plenty of time to reflect. Although COVID-19 presents an...

  • Low carbon generation

    Editor’s Pick | The green shoots of the Capacity Market auctions

    A pivotal year for the Capacity Market (CM) draws to a close, with the first long-term auctions for capacity since 2018. But for once the CM is the least interesting thing happening in the market, and the scheme itself seems out of step with the net zero future. In this Energy...

  • Energy storage and flexibility

    Storage story: a regulatory run-down

    While electricity storage has long been recognised as a crucial solution to mitigating the drawbacks of some types of renewable generation, it has taken some time for the regulatory and charging framework to catch up. It has taken years, but recent progress on the licensing and exemptions from some final...

  • Low carbon generation

    Cornwall Insight and the UK EfW market

    As the UK has continued its evolution towards decarbonisation, one of the lesser talked about success stories has been in energy from waste (EfW).  EfW in the UK has grown to around 50 operational plants processing around 12mn tonnes of residual waste (but with capacity to potentially process nearly 14mn...

  • Low carbon generation

    Scottish government calls for auction system review after CfD AR3 results

    On 20 September, BEIS announced the results of the Contracts for Difference (CfD) Allocation Round 3 (AR3). The auction results cleared at record low prices with 2023-24 delivery year prices at £39.65/MWh and 2024-25 prices at £41.61/MWh. The results drew criticism from the Scottish government despite projects in remote islands...

  • Low carbon generation

    Record low clearing prices in Contract for Difference Allocation Round 3

    Record low clearing prices in Contracts for Difference (CfD) Allocation Round 3 indicate the continued and rapid cost reductions for offshore wind resulting from competitive auctions. Prices below £40/MWh (in 2011-12 money) are extremely low in the context of previous auctions. Even when converted to 2018 money, these equate to...

  • Commercial and market outlook

    Editor’s Pick | Real-time pricing approved for NZ spot market

    This article was originally published on 31 July 2019 in Energy:2030. The New Zealand Electricity Authority (EA) has decided to settle the spot market on prices determined in real-time (RTP). In its decision, issued on 27 June, the EA said this is the largest change to the wholesale spot market...

  • Commercial and market outlook

    Editor’s Pick | Unplugged: stakeholders up the pressure on White Paper

    A month is a long time in politics. The euphoria surrounding the introduction and passage of the legislation for 2050 net zero target has proved short-lived, and the government has been pushed very much onto the back foot following the publication of the Committee on Climate Change (CCC)’s 2019 scorecard...

  • Low carbon generation

    Constrained development: Scottish wind and the issues of network charging

    Northern Scotland is home to a significant proportion of GB renewables, particularly onshore wind capacity. The region is also likely to be a leader in new capacity developments and we are working directly with a number of developers looking to finalise new subsidy-free projects here. Under subsidy schemes, there is...

  • Announcement

    Gareth Miller’s Interview at Inspiratia Offshore Wind Conference 2019

    Our CEO, Gareth Miller, was interviewed at the Inspiratia Offshore Wind Conference 2019, where he discussed his thoughts on a range of issues affecting the market today. Talking about his expectations on the contract for difference (CfD) allocation round three, Gareth said that Cornwall Insight Benchmark Power Curve models suggest that we...

  • Commercial and market outlook

    Five things we learnt from Energy Spectrum 668

    With five of the Big Six having published their segmental accounts – breakdowns of financial performance and costs across generation and supply business areas – it is readily apparent that, in general, margins are on a downward trend. In this week’s Energy Perspective, we suggest that, while some suppliers were losing money...

  • Commercial and market outlook

    Five things we learnt from Energy Spectrum | 659

    In this week’s Energy Perspective, we set out the main developments in the GB Capacity Market since the November 2018 ruling by the European Court of Justice that led to its suspension including, most recently, the European Commission’s confirmation it is to undertake a full investigation into the scheme. The business case...

  • Low carbon generation

    Cornwall Insight: evaluating drivers of low-carbon investment in a subsidy free world event

    On 17 October 2018 Cornwall Insight hosted a successful and well attended event where the future of support for renewable power generation, against the backdrop of the significant gap between current deployment levels and what must be delivered to meet decarbonisation goals, was discussed. Cornwall Insight experts discussed how although...