Oxera’s assessment of the impact of the proposed Contracts-for-Difference (CfDs) strike prices and contract terms has been published today. Oxera was engaged by ScottishPower to assess the impact of the proposed CfD strike prices and contract terms in the draft Electricity Market Reform (EMR) Delivery Plan (August 2013) on the economics of onshore and offshore wind.
Oxera’s analysis suggested that:
- The proposed CfD strike prices and contract terms were a less attractive investment proposition than the existing Renewables Obligation (RO) support mechanism.
- The expected financial returns for onshore and offshore generation projects were significantly lower than the hurdle rates for these technologies identified as needing to be met by the Department of Energy & Climate Change.
The financial impacts of varying contract terms to address the consequent likely shortfall in deployment of wind generation were also calculated.