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Maximizing revenue
The UK ' s ambitious decarbonization goals , together with recent recognition of the role of renewables in the UK ' s energy security , have created a more hospitable policy landscape for onshore wind and solar . The fact is that for the UK to reach its goals , it cannot ignore technologies that already have a proven track record . Significantly , in 2020 , the UK Government announced that support under the Contracts for Difference ( CfD ) regime would once again be open to onshore wind and solar . While there has been growing momentum for subsidy-free projects , often underpinned by corporate power purchase agreements , the policy shift still represents a positive signal to investors .
The development of battery storage as a commercially viable technology has also presented a valuable opportunity for onshore wind and solar . Co-location of battery storage with generation technologies allows intermittent generators such as solar and onshore wind to maximize revenue through storage at times of low demand and low prices , to respond at times of high demand and high prices . Recent high electricity prices have created a particularly favorable environment for renewables ( in particular , renewable projects not supported by a CfD which requires payments back to the CfD counterparty when prices are above the strike price ). Battery storage enhances the opportunity to maximize revenue through revenue stacking – for example , by the addition of ancillary services such as frequency response offered to the system operator .
Market reform
From a policy perspective , the UK Government ' s current Review of Electricity Market Arrangements ( REMA ), which is considering reforms to the current wholesale electricity market structure , is also intended to benefit renewables . The key driver for
REMA is for the wholesale electricity market to be better equipped to deal with an energy mix that is very different to when the current trading arrangements ( in the form of the " New Electricity Trading Arrangements ") were implemented over 20 years ago . While no final policy decision has yet been made on what reforms will be introduced , nodal or zonal pricing , as well as pricing segmentation between different generator types , are among those being considered . These options may allow consumers to benefit from the cheaper cost of renewables ( in contrast to , for example , the more expensive gasfired generation ). While there is some concern about the implications of locational pricing on renewables generators , if the design is right , the benefits for solar and onshore wind could include greater community support for projects which would yield lower prices for them .
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