Contracting for Wind Generation

David M Newbery

Economics of Energy & Environmental Policy, 2012, vol. Volume 1, issue Number 2

Abstract: The UK Government proposes offering long-term Feed-in-Tariffs (FiTs) to low-carbon generation to reduce risk and encourage new entrants. Their preference is for a Contract-for-Difference (CfD) for all generation regardless of type. I argue that a standard CfD is unsuitable for on-shore wind, where a fixed FiT appears less risky. The estimated extra trading and balancing costs of a CfD for on-shore wind might be £56 million/yr by 2020 and £170 million/yr for all wind. The extra costs of investment risk could be comparable and additional.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Contracting for wind generation (2011)
Working Paper: Contracting for wind generation (2011)
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