64) WACC-A-MOLE: Implications of the rising cost of capital for the fifth round of the Contracts for Difference scheme.

The Energy Essentials Podcast from Cornwall Insight

Soaring inflation and interest rates*, combined with supply chain issues and labour shortages, have pushed up the cost of capital and increased the costs needed to finance renewable projects. With the latest round of the Contracts for Difference (CfD) scheme now ongoing, many in the industry are concerned that administrative strike prices are set too low for projects to be financially viable given the rising capital costs.

In this podcast, Research Analyst Jamie Maule, and Senior Modeller Tom Edwards – co-authors of our insight paper WACC-A-MOLE: Implications of the rising cost of capital for the fifth round of the Contracts for Difference scheme – discuss the impacts of a high cost of capital on the UK’s renewables sector and the success of both prospective and previously commissioned projects under the CfD scheme.
*information accurate at the time of recording