Thistle Wind Partners UK

Explore our Thistle Wind Partners (TWP) case study to see how MCC developed a bespoke financial model to determine the Contracts for Difference (CfD) strike price. Our work supported TWP’s bid submission for the UK Government’s low-carbon electricity auction rounds, ensuring competitive pricing for the development of 2GW of offshore wind capacity.

What the Client Needed?

Thistle Wind Partners (TWP) required expert financial modeling support to determine the CfD strike price for their bid submission in the UK Government’s low-carbon electricity generation auction rounds. With 2GW of offshore wind capacity under development, TWP required a precise and adaptable financial framework to navigate the competitive bidding landscape and secure government-backed CfD contracts.

How we Helped them?

Bid Model

MCC played a critical role in supporting TWP’s bid submission strategy by delivering:

  1. Development of a Custom CfD Bid Model
    • Built a financial model from scratch to determine the optimal CfD strike price.
    • Accounted for two separate offshore wind farms, each utilizing distinct technologies (floating and fixed-foundation).
    • Integrated project-specific costs, revenue forecasts, and operational assumptions to reflect real-world conditions.
  2. Comprehensive CfD Mechanism Analysis
    • Conducted a detailed review of the CfD framework to ensure full compliance with auction requirements.
    • Evaluated bid submission strategies based on government auction pricing trends and industry benchmarks.
  3. Scenario Analysis and Financial Forecasting
    • Sourced relevant operational and financing inputs to ensure accuracy in cost projections.
    • Designed a scenario analysis tool to test multiple assumptions, providing TWP with a flexible and data-driven decision-making framework.
    • Modeled the impact of financing structures, cost variations, and energy output fluctuations on the strike price.
  4. Bid Optimization Based on Target IRR
    • Calculated the CfD strike price based on the project’s target internal rate of return (IRR) to ensure financial viability.
    • Provided strategic recommendations to enhance bid competitiveness while balancing risk and return.

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