Abstract
Difference (CfD) or a premium FiT, pFiT. The CfD entitles the generator to receive (or pay) the strike price less a reference price (which could be negative, requiring the generator to make a payment), but the generator must sell the power for whatever price can be secured in the market place. The pFiT is an agreed fixed payment per MWh produced that supplements the generator’s sales in the market. These should be contrasted with the classic FiT in which the generator receives a fixed amount per MWh regardless of the market price and is automatically dispatched without the need to secure a buyer, and the current system of supporting renewables in the UK, which is a via Renewable Obligation Certificate, ROC. Under the ROC scheme an onshore wind generator would be issued one ROC per MWh that they could sell in the market for ROCs, as well as selling their power. Suppliers would be required to secure and surrender a certain number of ROCs proportional to their sales, or pay a buy-out price that would be returned to generators in proportion to their ROCs, amplifying the value of these ROCs to the generator. Figure 1 shows the evolution of the ROC value and the wholesale (day-ahead) price, which together provide the return to on-shore wind. (Off-shore wind receives two ROCs/MWh, reflecting the need for greater subsidies to cover the higher cost.) It shows that the ROC scheme looks rather like a pFiT, in that the ROC price, corresponding to the pFiT premium, is fairly stable, although its future predictability and credibility may
Submitted Version (
Free)
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call