Template-Type: ReDIF-Article 1.0
Author-Name:  David M. Newbery
Title:  Contracting for Wind Generation
Classification-JEL: F0
Pages:  
Volume:  Volume 1
Issue:  Number 2
Year:  2012
Abstract:  The UK Government proposes offering long-term Feed-in-Tariffs (FiTs) to low-carbon generation to reduce risk and encourage new entrants. Their preference is for a Contract-for-Difference (CfD) for all generation regardless of type. I argue that a standard CfD is unsuitable for on-shore wind, where a fixed FiT appears less risky. The estimated extra trading and balancing costs of a CfD for on-shore wind might be £56 million/yr by 2020 and £170 million/yr for all wind. The extra costs of investment risk could be comparable and additional. 
Handle: RePEc:aen:eeepjl:1_2_a02
File-URL: http://www.iaee.org/en/publications/eeeparticle.aspx?id=18
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