February 28, 2020

RO roll off to boost merchant wind volumes

1 min

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The UK’s Renewable Obligation (RO) scheme oversaw almost 20GW of wind growth before its closure to new capacity in 2017. From 2022 onwards, RO subsidies begin to roll off and wind farm owners will face a new set of challenges as merchant wind operators, e.g.

  1. Price exposure – hedging output, managing balancing risk and understanding the impact of price cannibalisation as correlated wind & solar volumes increase
  2. Wind optimisation – with the end of RO revenues, wind plants will no longer be economic at negative power prices (growth in merchant wind may dampen negative price signals)
  3. Wind repowering – early wind developments often had the best sites with significant value upside from repowering, but planning & consent hurdles

RO roll off to boost merchant wind volumes