Solar and onshore wind came in with lower prices than nuclear generation in the first official auction under the UK government’s “contract for difference” pricing mechanism.
Most solar and wind offers came in around £80 per megawatt-hour, even though the government expected bids of £90 for wind and £120 for solar. Both renewable energy bids compared favourably with a negotiate rate of £92.50/MWh for the £42-billion Hinkley C nuclear project.
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A couple of solar developers appear to have offered a low price of £50/MWh by accident. “The Solar Trade Association will no doubt welcome this as another great leap towards subsidy-free solar,” wrote James Rowe of Hadstone Energy, promoter of the 19-MW Wicks solar farm. “Wick Farm just got there a couple of years before anyone else!”
Even after accounting for outlying price offers, “the results of the bids underline that wind and solar are cheaper than the nuclear option, and require prices for just 15 years, after which they will get the market price,” RenewEconomy reports. “The Hinkley contract increases with inflation for 35 years, by which time it will be something around £320/MWh, according to a recent Austrian study.”