This project aims to map out the expected scale and pace of growth of such generation and explore the potential for continued operation, life-extension/refurbishment, or repowering of these assets.
The research will establish or estimate the capacity volume and output characteristics of renewables coming off contract over the next decade and characterise the challenges and costs associated with their extension and post-contract operation. The project will also explore options for direct generator support, including specific challenges around dedicated CfD auctions as currently being considered by the government for onshore generators, and revenue cap-and-floor mechanisms, to reduce revenue risks for generators.
Additionally, it will investigate consumer interests and potential involvement through mechanisms like Power Purchase Agreements (PPAs) and a Green Power Pool. This element will combine desk research with interviews to understand the feasibility, design, and institutional issues involved in striking a balance between merchant tail generators and potential consuming organisations. The project aims to provide policy recommendations to support the continued operation and integration of post-contract renewables into the electricity market.
The UCL Centre for Net Zero Market Design researches policy and market reforms for a low-carbon UK electricity system, focusing on surplus energy, investment, and global energy transitions.
Publications
Policy brief: Post-contract renewables: a source of cheap low-carbon power?
The climate crisis is worsening and European energy markets are still volatile three years plus after the invasion of Ukraine, making the need to move to Net Zero energy ever more urgent. In 2002, the UK Government introduced the Renewables Obligation (RO) support scheme for renewable electricity projects to encourage investment in low-carbon power, but the scheme closed to new projects in 2017 and financial support for parts of the scheme is starting to run out - so what next for the move to low-carbon energy? This new policy brief from Michael Grubb and Katrina Salmon argues the case that these renewable support contract end dates actually present an opportunity to fully realise the benefits of past investment in renewables in ways that offer cheaper electricity, if we think and act smart.