A Study of Zero Bid Wind Farm for Future Scotland’s Energy Demands—A New Approach

Abstract

Offshore wind is in a rapid transitional phase, pushed worldwide by efforts of those to reduce climate change. Wind power is becoming a commercialised, unsubsidised competitive form of low carbon generation of renewable energy. Marketplaces reflect this growing trend with the first introduction of subsidy free bids in a tender for the Dutch and German governments. The analysis of surrounding literature of subsidy free bids and governmental policies revealed that integration of subsidy free bids have been carried out to various extents. Bids like those seen in the German and Dutch governments have been done in accompaniment with supportive policies and measures. For the UK, a possible subsidy free bid could be developed under the Scottish Sectoral Marine Plan. Owing to that, this paper investigates the feasibility of a subsidy free bid for the Scottish government. Utilising the Department for Business, Energy and Industrial Strategy (BEIS) levelised cost of electricity (LCOE) metric were inserted into a detailed excel spreadsheet. This paper calculates multiple financial scenarios under the LCOE metric to provide an insight into the possible scenarios of which different models of subsidy free bids can be implemented. The main parameters associated with the BEIS metric and calculator design were investigated. These included financial cost predictions, discount rate, generational capacity and net capacity factors. The final conclusion of the generated output data, showed it was indeed possible to adopt a subsidy free bid under the current UK contract for difference (CfD) scheme under strict and favourable conditions.

Keywords

• levelised cost of electricity
• renewables
• wind energy
• contract for difference