Onshore wind in the UK: what the subsidy changes mean for clean energy
For several years, onshore wind was effectively locked out of the UK’s main support scheme for new low carbon power. When government policy shifted and onshore wind was allowed back into Contracts for Difference (CfD) auctions, it quietly changed the outlook for some of the cheapest clean energy technologies we have.
Why the subsidy shift matters for onshore wind
Onshore wind and solar PV are among the lowest cost sources of new electricity in the UK. When they can compete in CfD auctions, they can secure long term price certainty and bring affordable low carbon power onto the grid.
When onshore wind was excluded from new CfD rounds, many otherwise viable schemes stalled. Developers faced:
- More exposure to wholesale power price swings
- Greater difficulty in financing projects at scale
- Local communities seeing fewer benefits from low cost, local generation
Allowing onshore wind back into the scheme puts it on a more level playing field again. It means:
- Cheaper, low carbon electricity has a clearer route to market
- Projects in some of the windiest parts of Europe can move forward with more confidence
- Consumers benefit from technologies that do not pay for fuel and have predictable long term costs
For the climate, the timing matters too. The UK has a legal target to reach net zero greenhouse gas emissions by 2050, and Scotland has committed to 2045. Bringing more onshore wind onto the system is one of the most practical ways to decarbonise electricity quickly.
What the Contracts for Difference scheme actually does
The Contracts for Difference scheme is the UK government’s main mechanism for supporting new low carbon electricity generation.
At its heart is a simple idea:
- Each project that wins a contract is given a long term strike price for its electricity
- If the wholesale market price is below that strike price, the scheme tops up the difference
- If the wholesale price is above the strike price, the project pays back the difference
This gives developers revenue stability while protecting consumers from overpaying when market prices are high. Contracts have historically run for around 15 years and are awarded through competitive auctions.
For onshore wind projects, that stability can:
- Lower the cost of capital and unlock more investment
- Support projects in more challenging locations, not just the easiest sites
- Help community and council stakeholders see long term, predictable local benefits
How the auction process drives cost and performance
CfD contracts are awarded through reverse auctions. Developers bid the price at which they are willing to deliver power. The most competitive bids win contracts until the budget for that round is allocated.
This process has already had a dramatic effect on some technologies:
- Offshore wind prices fell sharply over successive allocation rounds as developers competed on efficiency and scale
- Innovation in turbine design, foundations and operations has been pushed faster by the pressure to deliver more for less
Bringing onshore wind and solar back into that competitive framework matters because they are already some of the cheapest options for new generation. As they re join auctions, the expectation is that:
The overall cost of meeting net zero electricity targets is reduced compared with a system that leans more heavily on expensive technologies
Strike prices for onshore wind and solar will stay low compared with other new build options
Project teams will keep pushing for better yield, better availability and smarter operations
Onshore wind and the UK’s net zero targets
The UK’s net zero commitments are ambitious. Hitting them requires a rapid build out of low carbon generation across technologies, not just offshore wind and nuclear.
Onshore wind plays several important roles:
- Speed – projects can often move from consent to operation faster than more complex technologies
- Cost – no fuel costs and relatively modest construction costs make onshore wind highly cost competitive
- Location – projects can be sited close to demand centres or in resource rich rural areas, supporting local economies
- Flexibility – repowering existing sites with modern turbines can increase output without starting from scratch
However, none of this is automatic. Onshore wind still has to navigate planning rules, community expectations, noise constraints, grid connection challenges and long term asset performance.
That is where careful engineering and clear evidence make a difference.
How Xi supports onshore wind and renewable energy teams
Xi Engineering Consultants works across the full life cycle of wind projects – from early feasibility to operation, repowering and beyond.
For onshore wind developers, owners and operators we typically help to:
- De risk project design
Use advanced simulation and measurement to understand structural behaviour, vibration, noise and foundation performance before you commit to full build. - Optimise energy yield and availability
Combine modelling and operational data to diagnose under performance, refine control strategies and improve asset uptime. - Manage noise and environmental impact
Model acoustic behaviour around turbines and wind farms, design mitigation measures and provide clear documentation for planners and stakeholders. - Support planning and stakeholder engagement
Translate complex technical findings into clear, visual evidence that local authorities, communities and investors can understand and trust. - Prepare for repowering and life extension
Assess how existing assets are performing, what upgrades are possible and how best to sequence works to minimise downtime.
You can engage Xi for a focused, data led review of a specific challenge, or as an ongoing engineering partner across multiple sites and project stages.