Global Onshore Wind Market Report

One of the main demand drivers for onshore wind in the UK is the auctions designed through the Contract-for-Difference mechanism. The government announced the AR 4 CfD auction with a total budget of GBP345 million, where GBP15 million was allocated for onshore wind, solar, and hydropower for a max of 3.1GW. The auction results marked a comeback of the onshore wind sector, as the round secured almost 1.5GW of onshore wind power, including 900MW of mainland projects (Wind Europe, 2022). The government confirmed that it would continue to support onshore wind through annual Contracts for Difference auctions. Subsequently, as part of the Energy Security Plan, in March 2023, the government announced plans to launch CfD AR-5 with an initial budget of GBP205 million for both established and emerging technologies, including onshore wind (Government of UK, 2023).

The expansion of onshore wind industry in England is driven not only by CfD auctions but also by the strategy to revoke bans and tackle the adverse effects of wind farm opposition. Such announcements have attracted the interest of developers and investors, as evidenced by the substantial number of projects commissioned after the subsidy ban was lifted in 2020 (The Guardian, 2020). Here, the government reallowed subsidies for onshore wind farms and to participate in government contracts. In September 2022, the regulators announced streamlining onshore wind permitting procedures by relaxing rules of environment approvals and simplifying the Environmental Impact Assessment (EIA) for wind turbines (IEA, 2023). Besides this, the government further eliminated the ‘De Facto’ ban on wind farms, allowing easy approvals and loosening restrictions (The Guardian, 2023). In association, it aims to include local communities for rapid approvals by allowing ownership, which is expected to ease approvals and stimulate investments in the technology, thus paving the path for robust expansion in the coming years. 

The wind energy sector has significant potential in the UK, as in 2022, the country produced one-fourth of its electricity from wind energy (Wind Europe, 2023). As onshore wind farms are confined to Scottish land due to limited land availability, repowering with advanced turbine technology can surge capacity installations in other parts of the UK (IEA, 2023). To encourage repowering, the British government in 2023 mentioned providing steady support to the repowering segment under the Energy Security Strategy. Besides, onshore wind farms are not eliminated from the CfD mechanism, which guarantees a minimum strike price to renewable developers, and repowered farms can compete in CfD allocations (Government of UK, 2023). Thus, OEMs have a vast opportunity as instead of installing new wind farms, regulators focus on expanding the current legacy wind farms. Among notable developments, Octopus Energy, in partnership with EWT, plans to repower 1,000 onshore wind turbines in the UK (CURRENT, 2022) and Hagshaw Hill wind farm is set for repowering with a capacity of 80MW and a 20MW battery storage facility (The Guardian, 2023).

Even though to regain momentum, the regulators reinitiated subsidies on onshore wind projects, subsidy-free projects through the PPA route have a strong presence that offsets the need for public funding. For example, Vattenfall inaugurated one of the largest onshore wind farms in 2023. When fully commissioned, it will have a total capacity of 240MW. The energy will be provided through a route-to-market PPA to South Kyle for 15 years (Vattenfall, 2023). Another unsubsidised onshore wind farm with a capacity of 50MW came online at the end of 2021, Amazon’s first renewable project in the UK. This is the first of the four projects, where all together, it will provide 529MW of renewable energy to AWS data centres, fulfilment centres, and corporate offices by 2025 (Amazon, 2021). Further, UK telco BT has signed a 10-year PPA with the Renewables Infrastructure Group TRIG to procure renewable energy from a 35MW Scottish wind farm (DCD, 2023). Thus, with simplifying permitting procedures and the announcement of remote island wind farms, PPAs are also expected to expand for the onshore wind sector.

Energy storage is another area with substantial expansion potential for its ability to address the system instability caused by intermittent nature of onshore wind turbines. In order to accelerate the commercialisation of innovative longer-duration energy storage projects, in Q42022, the government awarded GBP33 million to successful projects under the Longer Duration Energy Storage programme (Government of UK, 2023). Further, the UK Infrastructure Bank commits to providing GBP62.5 million to support battery storage development (ETN, 2023). Private sector capital is also making inroads in the space, such as DIF Capital providing GBP200 million in funding for grid-scale battery energy storage project developments (DIF, 2023).