UK Renewable Energy Review – March 2023

UK Accelerates Decarbonisation Efforts

The UK is pushing to decarbonise industry and install more renewable energy capacity, especially from offshore wind. Renewable power generation is rising and so is support for other clean energy technologies, including hydrogen production and nuclear fusion.

The Offshore Wind Prize

Scotland’s First Minister Nicola Sturgeon said at the end of January that the Scottish Government would do all it can to support the success of offshore wind. Energy transition needs to be accelerated and priority should be put on working together with industry for achieving the shared just transition ambition, Sturgeon said at the Scottish Renewables Offshore Wind Conference in Glasgow.

“We live in a world right now where it's not difficult to see and be reminded - almost on a daily basis - of all of the challenges crowding in on us,” the first minister said.

“But we have every reason to be hopeful, optimistic and upbeat about the future - because the prize, the massive prize, if we get this right is a greener, fairer, more resilient energy system; our country here in Scotland that successfully, fairly and justly makes that transition to zero; and a country, albeit relatively small in scale, that plays a disproportionate part in helping the world save the planet for future generations.”

Offshore wind and the green hydrogen industry offer “enormous industrial and economic opportunities” for Scotland, Sturgeon said, but added that those opportunities could be maximised if there is greater collaboration across government, developers, and the supply chain.

A lot of the opportunities in the supply chain will be connected with manufacturing, therefore, Scotland needs to invest in ports to support fabrication, the first minister noted.

“The need to accelerate our energy transition, that we all recognise, and secure the benefits of our renewables assets and success, has never been a more urgent imperative. And so, our priority – our shared and collective priority - must be to intensify the work we do together to achieve those shared ambitions, for the benefit of our own generation, but also for the benefit of the generations who will come after us,” Sturgeon concluded.

Meanwhile, The Crown Estate announced in January it had signed Agreements for Lease for six offshore wind projects which could begin to generate green electricity by the

end of the decade and have the potential to generate around 8 gigawatts (GW) of renewable electricity, enough for more than seven million homes. Three of the six projects are located off the North Wales, Cumbria and Lancashire coast, and three are located in the North Sea off the Yorkshire and Lincolnshire coast.

The signing of the agreements and the projects planned have the potential to make a major contribution to the UK Government’s target of 50 GW of offshore wind capacity by 2030, The Crown Estate said.

“The UK’s offshore wind achievements to date are nothing short of remarkable, and this next generation of projects point to an even more exciting and dynamic future,” said Dan Labbad, CEO of The Crown Estate.

Minister for Energy and Climate Graham Stuart said:

“Offshore wind is at the heart of our goal to secure clean, affordable and resilient energy supply for all in the UK, while bringing major business, investment and job opportunities along with it.”

Offshore Wind Capacity Additions and Renewable Generation Hit Records

The UK government’s latest available statistics for the July-September 2022 period showed that renewable generation grew by 18% compared to the same period of 2021, due to both capacity growth – as wind generation grew by a record 2.8 GW — and more favourable weather conditions. Wind, solar, and hydropower output rose due to more favourable weather conditions for all renewable technologies, as well as increased wind and solar capacity, the Department for Business, Energy & Industrial Strategy said in December. Over one year to September, 3.4 GW in new renewable capacity was added, up by 6.9%. Most of the new capacity was in offshore wind, at 2.8 GW, continuing strong year-on-year growth that began in the first quarter of 2022.

UK wind capacity grew by 3,511 MW last year – enough to power more than 3.4 million UK homes a year, according to research by RenewableUK based on its EnergyPulse data. Offshore wind additions hit an annual high of 3,193 MW, while onshore wind capacity added 318 MW, ten times lower than offshore wind, RenewableUK said.

“Just two small turbines went operational in England in 2022, so we need to see substantial changes to enable consumers and local communities to benefit fully from the benefits that this popular low-cost technology offers,” RenewableUK’s Chief Executive Dan McGrail said.

“That means changing the rules which skew the planning system unfairly against onshore wind in England, putting it back on a level playing field so that it can compete fairly against other clean technologies.”

Industry Calls For Budget Measures To Secure Green Growth

The low-carbon energy industry warns that the UK could lose its competitiveness in clean technology deployment and supply chain if the government does not introduce new measures to preserve Britain’s key role in renewable energy development.

The UK needs a clear government plan to continue attracting clean energy investment, five energy trade associations representing more than 750 companies wrote in a letter to the Chancellor Jeremy Hunt in early February 2023.

“Despite our industry’s commitment to the low carbon energy transition, we are concerned that there is no clear government plan to deliver green economic growth and continue attracting clean energy investment into the UK,” the chief executives of RenewableUK, Energy UK, the Nuclear Industry Association, Scottish Renewables, and Solar Energy UK wrote in the joint letter.

Currently, inflation, unfavourable exchange rates, and rising costs of raw materials and labour are pushing up prices across all sectors of the economy, including for clean energy projects, they said.

“Many developers and supply chain companies were seeing very small margins before, which will now disappear completely without a more sustainable approach to pricing clean energy solutions, and a reformed capital allowances regime,” the associations warned.

They are calling for key steps in the Spring Budget to address the potential loss of competitiveness compared to the US and the EU.

“The UK can no longer take its competitive advantage as a mature market for granted. The passage of the Inflation Reduction Act (IRA) in the US, the REPowerEU package and further interventions on state aid rules expected in the EU offer an attractive proposition for clean energy investors.”

By contrast, the UK’s Electricity Generators Levy has 0% relief for clean power generators.

“If the UK is to stay ahead in the global race for clean energy, it needs to adopt bold measures to retain and boost private investment in the energy transition,” the trade associations say.

RenewableUK’s CEO Dan McGrail said, “Investments in renewable energy and new supply chains may dry up unless the Chancellor takes decisive action and implements the key measures which we have set out in our letter to secure tens of thousands of high quality jobs and attract billions in private investment.”

Hydrogen, Industry Decarbonisation and Nuclear Fusion

The Environment Agency published on 3 February regulatory guidance on the production of hydrogen from methane with carbon capture, otherwise known as ‘blue’ hydrogen. Operators wishing to produce ‘blue’ hydrogen in England will need an environmental permit from the Environment Agency. As well as providing permitting advice to operators, the guidance gives an insight to the public on how environmental regulations and standards are being applied in order to protect communities from risk of harm, the UK government said.

The government also said it would make available £32.5 million funding to support British industry in efforts to cut fossil fuel use. The funding will back industrial sectors – including construction, mining, and quarrying – in their plans to develop greener technologies and low carbon fuels and move away from gas oil, otherwise known as red diesel.

“This latest round of funding will help to speed up industrial decarbonisation, providing industry and consumers with effective low-carbon alternatives to red diesel while boosting green investment to future-proof the resilience of British industry,” said Minister for Energy and Climate Change Graham Stuart.

The UK government has also established a new delivery body for the UK’s fusion programme, named UK Industrial Fusion Solutions Ltd (UKIFS), to deliver a prototype fusion energy plant at West Burton in Nottinghamshire. The Spherical Tokamak for Energy Production (STEP) plant will be constructed by 2040 to demonstrate the ability to use fusion energy to generate electricity for the UK grid.

Nuclear fusion is still years and many breakthroughs away from achieving the promised potential of limitless carbon-free energy, due to significant technical hurdles, including achieving net energy gain in the fusion reaction.

The UK government’s announcement comes shortly after a major breakthrough for fusion in the US where the US National Ignition Facility in California conducted fusion experiments which released more energy than was put in by the lab’s high-powered lasers.

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