THE UK LOOKS TO ACCELERATE RENEWABLES DEVELOPMENT

UK REVIEW

The UK Looks To Accelerate Renewables Development

The UK is accelerating clean energy investments and developments as part of its strategy to achieve net-zero emissions by 2050 and reduce its dependence on imports of fossil fuels in the wake of the Russian invasion of Ukraine.

Capacity additions of wind and solar energy are growing, while the government looks to support investment in other clean energy technologies, including hydrogen and carbon capture, utilisation and storage (CCUS).

Over the past few months, the UK has held its biggest renewable energy auction for a total of nearly 11 gigawatts (GW) of clean energy, and has stepped up funding for research and innovation, as well as support to hydrogen projects.

In 2021, the UK’s electricity generation mix continued to evolve and move away from fossil fuels and towards renewable alternatives, although renewable generation dropped to 39.6% of generation from 43.2% in 2020 due to less favourable weather conditions for renewable generation, the Department for Business, Energy & Industrial Strategy said in its statistical release at the end of July.

Following a record high in 2020, renewable generation declined by 9.3% although 2021 is still the second highest on record. The decrease was mostly the result of less favourable weather conditions, particularly wind speeds, but also sun hours and rainfall.

Offshore continues to be the leading wind technology in 2021, accounting for 55% of all wind generation in 2021, the UK government said. Offshore first outstripped onshore generation in 2019, although offshore capacity still lags onshore. Offshore wind plants benefit from coastal winds that generally blow at stronger speeds and for a longer period. Moreover, offshore turbines tend to be newer and larger devices, thus yielding a higher load factor.

Overall, installed renewables capacity grew by 3.7% in 2021, the statistical report found.

Renewable Capacity Set To Soar

Installed capacity from renewable sources is set to surge in the coming years as the UK held in the summer its largest renewables auction to date.

The UK’s Fourth round of Contracts for Difference scheme, the biggest renewables auction so far, secured almost 11 gigawatts (GW) of clean energy - enough to power around 12 million homes, the UK government said in early July. The round secured the 11 GW across a range of clean technologies, including offshore wind, solar, onshore wind, and - for the first time ever - floating offshore wind and tidal stream – helping to boost British energy security and independence with cleaner, more affordable and diverse energy created in the UK.

Scottish renewable energy projects won contracts for 3 GW to sell their power in this UK auction – at record low prices, Scottish Renewables said. Offshore, two projects off Scotland’s east coast won Contracts for Difference in a competitive UK Government auction process – at just £37.35 per megawatt-hour, 6% cheaper than in previous auctions.

Onshore wind made a comeback with around 1.5 GW of projects awarded, while solar PV secured around 2.2 GW worth of CfD deals, the independent energy research and business intelligence company noted.

“The results back UK’s ambition to increase its renewable energy share to combat the high electricity prices in the country, driven by the spike in natural gas prices following Russia’s invasion of Ukraine. With these awards, we expect annual renewable energy installations in the UK to grow over the next three years,” Rystad Energy says.

According to the company, solar PV and onshore wind are each set for an annual average installation rate of 2 GW -3 GW between 2024 and 2026. Furthermore, the UK government plans to hold a CfD auction each year starting in 2023, in an effort to further boost renewables, the energy research firm said.

Offshore Wind Accelerating

The Crown Estate has also identified five broad ‘Areas of Search’ for the development of floating offshore wind in the Celtic Sea – a region rich in natural resources, including world-class wind resource that can be developed with floating turbines. It is intended that these areas will deliver 4 GW of floating offshore wind power by 2035 – kick-starting industry in the region and providing power to almost four million homes, The Crown Estate said.

Six fixed offshore wind projects, with the potential to generate renewable electricity for more than 7 million homes, have been given the green light by the Secretary of State for Business, Energy and Industrial Strategy to enter into an Agreement for Lease with The Crown Estate.

UK’s offshore industry investments could generate 26,000 new green energy jobs by 2030, according to research by Robert Gordon University (RGU), but only if investment conditions were right.

Solar Sector Shines

In the solar power sector, the UK currently has around 13 GW of capacity additions in the pipeline, as well as 15 GWac of installed solar capacity, of which utility-scale projects account for 10 GW, most of which is owned by investment funds, Rystad Energy said in a June renewable energy overview.

By contrast, the majority of solar projects in the pipeline are led by independent power producers (IPPs) or large-scale developers, Rystad Energy notes.

Despite ongoing supply chain issues and volatile commodity prices which may cause some players to postpone projects, the energy research firm expects the UK’s total cumulative capacity for utility solar will surpass 11 GW by the end of this year. Further out, Rystad Energy estimates utility-scale solar capacity will exceed 23 GW by 2030.

Despite the phase-out of the subsidies in 2019, new solar deployment has rebounded since then, after the growth trend had slowed between 2016 and 2019. The rebound was the result of the falling cost of solar panels and increase in development expertise and efficiencies, Rystad Energy reckons.

Funding for Hydrogen Research and Innovation Increases

The UK government has also recently announced more funding for hydrogen projects and research.

Jane Toogood was appointed in July as the UK’s first Hydrogen Champion, who is expected to play a vital role in bringing industry and government together to realise the government’s hydrogen ambitions. The UK aims to support up to 10 GW of hydrogen production capacity by 2030, aiming to run annual allocation rounds for electrolytic hydrogen, and designing, by 2025, new business models for hydrogen transport and storage infrastructure. These targets are

expected to put the UK on track to make it a world-leading hydrogen economy, attracting billions of pounds in inward investment and supporting 12,000 jobs across the country. The government published in August a call for submissions to the 2022 Hydrogen Business Model and Net Zero Hydrogen Fund Electrolytic Allocation Round.

The 2022 HBM/NZHF Electrolytic Allocation Round aims to kickstart the low carbon hydrogen economy across the UK, helping meet the aspiration of up to 2 GW of low carbon hydrogen production capacity in operation or construction by 2025. The Round is also aimed at supporting projects to deploy at scale at the earliest opportunity, advancing the government’s aim to deploy up to 10 GW of low carbon hydrogen production capacity by 2030, with at least half from electrolytic hydrogen production capacity, and to do so at affordable costs by harnessing economies of scale.

Commenting on the recent government announcements to support hydrogen, RenewableUK’s Policy Analyst for Emerging Technologies Laurie Heyworth said:

“The Government’s landmark announcement on the way in which British companies will be able to access funding for green hydrogen projects will kickstart the private investment we need to build up a whole new industry in the years ahead. The Hydrogen Business Model operates in a similar way to Contracts for Difference which have turbo-charged the growth of wind energy in the UK and enabled rapid and massive cost reductions. Green hydrogen will add vital flexibility to our future energy system as it can be used in a wide range of ways to replace expensive gas.”

“We’re looking forward to working closely with the Government’s new Hydrogen Champion, Jane Toogood, on measures to speed up the roll-out of green hydrogen as a clean super-fuel which will help us to decarbonise sectors such as transport and energy-intensive industries where progress has been too slow so far,” Heyworth added.

Innovative biomass projects across the UK were awarded in early August £37 million in funding. A total of £32 million government funding was allocated to increase UK production of sustainable biomass, which can be used as a renewable energy source. Another £5 million goes to support innovative new technologies that will generate hydrogen from biomass and waste.

In recent months electric vehicle registrations are bucking the trend of an overall decline in car sales in the UK amid supply chain issues and a lack of semiconductors, the latest data from the Society of Motor Manufacturers and Traders (SMMT) showed. While total UK new car registrations fell by percent to 112,162 units in July, battery electric vehicle (BEV) uptake grew by 9.9% to 12,243 units to achieve a 10.9% market share for the month.

Although this is the weakest monthly uplift recorded by BEVs since the pandemic, overall growth in the year has reached 49.9% to deliver a 13.9% market share, SMMT said.