A monthly snapshot of the ever-changing power outlook in the UK
The UK government’s aim of achieving clean power by 2030 feels ambitious, but there is truth in the saying ‘Fortune favours the bold’. Progress often rewards those who dare to take risks.
Peter Sibley’s recent experience (Nuclear) captures this perfectly, and we’re seeing growing interest from clients and partners in exploring the business case for new power solutions, whether they’re new to them or a new approach in the UK.
Macroeconomics means it isn’t always easy to take risks, but every month in the energy market we see
new commitments, progress with reforms, new ideas, collaborations, trials, new technologies, and helpful research aimed at transforming power and better serving our communities.
The answers aren’t always obvious. Sometimes difficult decisions need to be made. We will continue to share our insights with you through the Power Pulse series and would welcome you to connect and share your own ideas and experiences.
Tom Shilton, Director
Spotlight of the month
The answers aren’t always obvious. Sometimes difficult decisions need to be made
Small but mighty: the rise of small modular reactors
You know something’s catching on when you’re asked to speak to audiences across the UK several times in one month. In recent weeks, I’ve spent a considerable amount of time explaining why technology companies are backing nuclear power globally, and why small modular reactors (SMRs) are of growing interest to data centre providers.
But it’s not just data centres that stand to benefit from this technology. It’s being discussed elsewhere too, from hydrogen production and mining to manufacturing and other high energy demand industries.
I recently summarised the benefits of SMRs in an article for Stantec’s website.
Consistency: Unlike weatherdependent renewables, nuclear energy operates at very high capacity for long durations, delivering a stable, uninterrupted supply.
Space: Nuclear requires significantly less land than wind or solar, freeing up space for other uses and offering flexibility in relation to siting.
Scalability: SMRs’ modular design and potential scalability make them well-suited for supplying clean, reliable power to specific end users or locales.
Ease: SMR vendors and their partners could handle the different stages of the process, from construction and commissioning of the plant to operation and ultimately decommissioning.
Safety: They come equipped with advanced and robust safety features such as fail-safes and passive cooling systems, designed to provide reassurance regarding the management of nuclear safety.
Peter Sibley, Director
Developers may face new contractual and operational obligations
Wind
Ofgem has just concluded a consultation on its GC0117 modification. The proposal aims to harmonise power station connection thresholds across Great Britain, simplifying them to two categories: large (≥10MW) and small (<10MW). This replaces the mismatched thresholds for small, medium and large power stations in England & Wales, Northern Scotland, and Southern Scotland.
The changes, set to apply from June 2027, aim to improve system efficiency, transparency, and consumer benefits while supporting the transition to a low-carbon energy system.
More projects will now be deemed large, so developers may face new contractual and operational obligations, potentially increasing costs or significantly altering project feasibility.
Joseph Padbury, Associate Director Discover what’s changing
POWER PULSE
Grid
Network resilience is vital to all developments, not least critical infrastructure. In recent times, we’ve seen data centres factoring in a different approach to traditional grid connections, whereby they allow for onsite back-up generators as well as full grid resilience. They have two feeds from diverse points on the network so that if one substation or cable goes down, they can instantly switch to the other.
There are cost and programme implications, as you need to factor in additional infrastructure and cable routes (which could have their own complexities eg bridge or river crossings and third-party land agreements) and network capacity. However, it should be considered at the design stage of all critical infrastructure projects, as it allows you to weigh upfront costs against the implications of downtime and plan for necessary resilience in the event of an unplanned outage.
Eleanor Wratten, Associate
Find out more about utility management
Grid resilience should be considered at the design stage
Solar
Great British Energy is investing £200m in rooftop solar PV for schools and hospitals, Great Britain reached a new solar generation record on 1 April, and Solar Energy UK announced that the industry could almost triple its GVA from £1.3bn in 2024 to £3.5bn in 2035.
But what about the ethics of solar panel sourcing? As the market grows, it’s inviting more questions about environmental impact and human and labour rights. This isn’t high on every purchaser’s agenda now, but it could be a ticking time bomb. The same goes for batteries and wind turbines.
Having looked at ethical sourcing and made recommendations to clients, inevitably it comes at a higher financial cost. However, this gap will narrow as the volume of more ethical options grows. Developers need to think about finding the right energy solution and the right ESG solution.
Tom Shilton, Director
Read Solar Energy UK and BiGGAR Economics’ report
Emobility
In March, Eurelectric published a flagship report on the flexibility potential of electric vehicles (EVs). While the topic is not new, the fact that the report has been published by the federation of the European electricity industry, representing 3,500 European utilities, is significant.
‘Smart charging’ is already commonplace in the UK, with suppliers like Octopus and Ovo offering incentives to EV owners that let charging patterns respond to times of stress in the electricity network.
Vehicle-to-grid takes it a step further, allowing vehicles to also export to the network to provide flexibility, for example when there are shortfalls in renewable generation or when wholesale market prices spike. The report estimates that, used in this way, EVs could reduce grid operators’ investment bill from €67bn a year to €55bn a year between 2025 and 2050. We could expect similar benefits in the UK if we give EV owners the option to participate in vehicle-togrid schemes.
Ben Bowler, Technical Director
What else does the report say?
What about the ethics of solar panel sourcing?
Battery storage
We continue to be surprised by the new insights in Volta Foundation’s annual battery report. While it was published back in January, this 500-page, free-to-access document is the definitive source of information on the global battery industry. It’s a must-read for anyone in the battery industry.
Battery storage continues to track a similar path to solar PV, with costs rapidly reducing, technology maturing, and Chinese dominance in the supply chain. More than 69GW of new projects were installed in 2024, with lithium-ion batteries representing over 98 percent of them. Commentators now describe grid-scale storage as the ‘fastest-growing energy technology’.
Eighty percent of the market is for utilityscale front-of-the-meter batteries. The rest are connected to commercial, industrial, and residential facilities. We believe this category is immature and still has vast potential to take advantage of the progress in utility-scale batteries to alleviate grid constraints, support decarbonisation, and reduce energy bills.
Ben Bowler, Technical Director Download Volta’s 2024 battery report
POWER PULSE
Geothermal
I’m being introduced to more people who are experiencing issues with grid capacity and securing a grid connection for their project but who are unaware that geothermal energy could reduce their electrical demand. In some cases, it could offer a source of power and unlock their projects. Geothermal also offers significant potential to decarbonise and reduce operational costs.
A range of proven techniques and recent technology advances mean that geothermal energy is theoretically possible in any location. Opportunities may include heating, cooling, and/or power supply for:
» new housing schemes
» large estates such as universities and hospitals
» industrial sites such as manufacturing
» district heat networks
» data centres
» public sector
» prisons and defence facilities
» supply to the mains electrical grid
Mark Griffiths, Associate Connect with Mark
Geothermal energy is theoretically possible in any location
Hydrogen
The UK government has announced a shortlist of 27 hydrogen electrolysis projects as part of its Hydrogen Allocation Round 2 (HAR2) funding process. They include a new green hydrogen production facility at Grangemouth oil refinery that’s scheduled to stop production later this year.
With industrial and commercial customers facing long delays to connect to the electricity networks, they are starting to investigate other sources of power as well, including from nuclear power plants and the existing gas networks.
Europe and North America are already using their gas distribution networks to supply GW of power to large power-users such as data centres, with some using hydrogen fuel cells onsite to mitigate the associated carbon emissions. With the potential to blend hydrogen into our gas networks, sourced from green electrolysis plants, this could be an effective low-carbon way to meet energy demand in the UK.
Tom Shilton, Director
See who’s on the shortlist
Nuclear
I boldly claimed on a panel last month that we could see small modular reactors (SMRs) collocated with UK data centres within the next five years if certain conditions are met. The audience (of built environment professionals) was divided—some argued 10-15 years, while others said we need to be more optimistic than that.
I posed the same question to an audience of nuclear industry professionals this month. The majority said 5-10 years, while a few joined me at the front-end of the scale with a more positive outlook.
This division of opinion is understandable. The SMR industry is ambitious, but the technology awaits proof at scale and is not yet fully understood by others. There are hurdles to overcome and opportunities that we haven’t yet fully explored that could help drive things forward.
Clearly, if we are to unite people’s vision around an SMR-powered future, we need more consistent messaging around the opportunity, how we’re enabling this to happen, and our progress.
