+44 (0) 1865 952 700 |
Press enquiries
  • This field is for validation purposes and should be left unchanged.


Home/Prospects for subsidy-free wind and solar in GB

Prospects for subsidy-free wind and solar in GB

Over the past few years, the relentless pace of cost declines in wind and solar has seen them firmly cemented as the poster children of the global energy transition. With levelised costs dropping below $30/MWh, onshore wind and solar PV are already the cheapest forms of generation in many countries worldwide. Offshore wind, free of the NIMBY opposition that often beleaguers its onshore counterpart, has also seen recent triumphs, with DONG and EnBW famously winning contracts for the first subsidy-free projects in Germany.

Yet as wind and solar come of age, new challenges mount while old ones remain. Four of them matter most in the European and GB context. First, after a period of uncontrolled deployment that resulted in blown budgets, many European governments all but turned off the subsidy tap, changing the flood of support into little more than a trickle. Second, with growing deployment, system-wide costs of intermittency increase substantially, along with their recognition in the eyes of policymakers. Third, with an existing grid and a relatively limited solar resource, the economics of distributed PV in Northern Europe remains questionable. Finally, low commodity prices make market competitiveness ever more elusive.

These challenges have the potential to stall the growth of renewables in Europe. Large frontrunners – Germany, Italy, Spain – have all seen the previously exponential growth plateauing recently, as generous subsidies rapidly wind down. In GB, with the closure of the RO scheme and the effective exclusion of onshore wind and solar from CfDs, a similar trajectory may play out, despite the expected growth in offshore wind.

Unsurprisingly, politics and economics will shape the trajectory of GB renewables’ growth. In the short- to medium term, politicians will continue picking winners, deciding which technologies receive the increasingly scarce subsidies. In the longer-term, economics is likely to prevail, as further cost declines and a growing role of storage could open up the competition and allow for unsubsidised deployment. In reaching the subsidy-free world, new business models – tapping into additional revenue streams – are likely to emerge, and regulatory changes may be necessary to enable them.

In this study, we explore potential paths for wind and solar in GB, answering the following questions:

  • What level of new-build and retirements should we expect under the current policy regime?
  • How will changes to network charging affect the economics?
  • What cost reductions would be necessary to enable subsidy-free deployment?
  • What is the potential for renewables to access alternative revenue streams?
  • At what capacity levels does the system saturate?
  • How does the economics depend on: fuel prices, carbon prices, and battery cost reductions?
View Report

Our subscription services

Our subscription service provides you with long-term market forecasts, strategic insight reports, interactive client forums and access to our market data and analytics platform.

Interested? Please sign up to receive our complimentary monthly summary reports via email. Simply tick which reports you would like to receive. Please indicate your consent in the box provided and view our privacy policy.

If you would like further information on a particular subscription service or report please enter further information in the box provided.



  • Please find our privacy policy here

  • In October 2014, EU leaders agreed on common climate and energy targets for 2030. These included a 40% reduction in GHG emissions relative to 1990 levels, along with targets for renewables deployment and energy efficiency. However, Europe’s main decarbonisation instrument, the EU ETS Phase III, is well out of step with her stated ambitions. The 20% reduction in GHG emissions by 2020 should easily be achieved. However, the 2030 target requires credible commitment to much more stringent policies, particularly in power, where the economics dictate much of the emission reduction burden should be borne.

    Read More
  • Natural gas markets are growing fast on a global level, with more players, increasingly complex rules and mechanisms, and rising global connectivity. In this global context, Europe sits in a unique position, with an escalating import dependency and an ever growing number of suppliers. Increasingly difficult upstream financing, highly political infrastructure developments, and the intricate evolution of gas-for-power demand will drive the future of the European gas market.

    Read More
  • Commodity prices drive the size and structure of the energy industry perhaps more than any other factor. Long-term commodity price expectations have fallen dramatically across the energy market, and strategies and policies are evolving consistent with these new beliefs. More than $200 billion worth of oil and natural gas assets are currently for sale globally. Coal-to-gas switching in power, which becomes more attractive with falling commodity prices, is firmly on the political agenda in Europe and the US.

    Read More