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En-Route to market in 2020?

Tim Dixon
Tim Dixon Wholesale Team Leader

On 14 January, the latest update of the Renewable Energy Planning Database (REPD) was published, giving an overview of current and planned renewable energy projects across Great Britain and Northern Ireland.

The update has revealed the total capacity of renewable energy and storage projects across England, Scotland and Wales classed as ‘awaiting construction’ or ‘under construction’ currently stands at 29.9GW. The majority of this is classed as ‘awaiting construction’, making up 24.7GW of the total pipeline capacity. Underlying political uncertainty at the latter end of 2019, on top of a lack of available support schemes, reduced investor confidence and impacted the number of new renewables projects commencing construction activities.

The principle question for us looking at the year ahead is what route-to-market these pipeline projects will opt for. Under the assumption that the majority of offshore wind projects will be looking to secure a deal through the Contracts for Difference scheme or be developed as extensions to existing sites, just over 15GW of projects will still need to seek an alternative route-to-market. Our research into subsidy-free developments reveals only a handful of renewables projects have publicly confirmed route-to-market plans. Presently Utility power purchase agreements (PPAs) remain the leading option, but this option may not continue to dominate in 2020.

3.3GW of standalone battery storage is classed as ‘awaiting construction’ or ‘under construction’ in Great Britain. While many of these will be optimised by in-house trading teams, others will be looking for a competitive and comprehensive flexible asset PPA deal to ensure they achieve the greatest value from their project across a range of revenue streams.

With rising media attention surrounding the climate crisis and market innovations such as building basket PPAs for consortia, we can expect growth in corporate PPA (CPPA) deals. Towards the end of 2019, news that supermarkets and tech giants were turning to CPPAs gives further weight to this argument, with the large onshore wind pipeline in Scotland being particularly attractive for prospective CPPAs. At the end of last year, for example, Tesco PLC and Amazon.com Inc signed CPPAs with ScottishPower to receive energy from onshore wind assets in Scotland.

We will continue to follow renewable generation development closely, with our Subsidy-free Renewables Tracker service set to launch in the coming weeks. We are also commencing our second market survey of the flexible asset PPA market, looking at offtaker service provision and managed capacity of battery storage assets. For further information on these, please contact James Brabben at j.brabben@cornwall-insight.com.

 

You may also be interested in…

Report | Flexible Asset PPA Market Report

Podcast | Into the unknown: A discussion on subsidy-free renewables

Blog | Constraints – can’t stop loving you

Training course | Balancing Mechanism: commercial opportunities

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