A good time for onshore wind and solar  

In recent years, there have probably been very few UK Government announcements or publications relating to the UK’s decarbonization ambitions that have not mentioned offshore wind, which has rapidly emerged as an established renewable energy technology. But there is also accelerating interest by investors in onshore wind and solar PV, the dependable older cousins of offshore wind, that are again emerging from the shadows. The first onshore wind turbines in the UK began generating electricity in 1991, gradually introducing diversity to a renewables sector that was dominated by hydropower and waste, with a large number of projects being commissioned in the 2000s. The growth in solar PV was propelled by the introduction of the Feed-in Tariff (FIT) scheme in 2010. Gradual cuts to FITs and the government’s decision in 2015 to end subsidies for onshore wind represented a temporary set-back for onshore wind and solar PV. But, as will be discussed in this article, policy and economic changes have created the right environment for renewed growth for onshore wind and solar PV.  

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 gas-fired 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.  

Solar value chain 

In terms of the supply chain, for solar PV, there have been some challenges resulting from tensions around the supply of panels from China. To address this, the Solar Stewardship Initiative (SSI), led by SolarPower Europe and Solar Energy UK, aims to develop a responsible, transparent and sustainable solar value chain. The SSI is currently consulting on the SSI Code, which is a positive development that will aid developers in securing supply contracts that comply with relevant global standards.  

One ongoing challenge for all renewable energy projects, from which onshore wind and solar PV projects have not been immune, is securing a grid connection. The connection queue, which operates on a “first come, first served” basis, together with the potential need for grid reinforcement works, mean that both distribution and transmission connected projects can face delays. This is also another area where welcome reform is being implemented. For transmission connected projects, National Grid recently held a Transmission Entry Capacity amnesty which allowed projects, which are unlikely to proceed, to terminate their agreements with National Grid at minimum or no cost, with the aim of shortening the queue. As a longer-term solution, amendments to the Connection and Use of System Code will introduce milestones to be met by applicants for connection, to ensure only viable projects remain in the queue. For distribution connected projects, change is also afoot. The Energy Networks Association, representing the electricity distribution companies, recently published a plan for reform, which tables reform options such as prioritizing mature projects that are closer to delivery above those that may be “blocking” the queue, and coordination of works that are required to be made to the distribution and transmission systems.  

What is clear is that in the race towards decarbonization and energy security, there is recognition of the key role that onshore wind and solar PV can play.  

For a list of the sources used in this article, please contact the editor. 

Antony Skinner & Justyna Bremen 


Antony Skinner is Partner and Justyna Bremen, Senior Expertise Lawyer, in Ashurst’s Projects and Energy Transition team. Ashurst is a leading international law firm with world class capability and a prestigious global client base. The firm’s in-depth understanding of its clients and commitment to providing exceptional standards of service has seen it become a trusted adviser to local and global corporates, financial institutions and governments on all areas of commercial law.