Industry Insights: 2017 a landmark year for clean energy
2017 was a landmark year for clean energy in terms of accomplishments, supporting policies, and planned innovation, with many milestones being reached and breakthroughs achieved. The year was hailed by many in the industry, leading to expectations for 2018 to continue to carry the momentum gathered towards the transition to a low-carbon economy to be extremely high.
One of the pivotal moments of the year arrived early in spring, on the 21st April, when the UK experienced its first full 24 hours without coal generation since the use of fossil fuels began. Cordi O’Hara of the National Grid described it as “a watershed moment in how our energy system is changing”. The significance of this cannot be overstated as coal has been both a vital source of energy and an emblem of climate damage for a substantial amount of time in the public eye. The ability for the UK to be coal-free for an entire day showcases that firstly, the UK is successfully phasing out coal, and secondly, the UK has the potential to utilise alternative, greener sources, thereby raising awareness and knowledge of the clean energy replacements and aiding the transition immensely as champions of renewable energy take the opportunity to educate audiences of the new reality.
In addition to this, the November UN Climate Change Conference (COP23) saw the formation of the Powering Past Coal Alliance, an effort once again led by the UK. This alliance solidifies the UK’s disapproval towards its reliance on coal and reiterates that the UK is actively striving to reduce usage in the short-term, but ultimately, in the long-term, eliminate usage of coal, both nationally and internationally. Sadly, despite this positive news surrounding coal usage, there is still one clear issue that needs to be addressed. This is the statistic that highlights that despite its declining usage in general, coal is still relied upon at peak times, and during the top 10% hours of highest electrical demand, coal provided a sixth of Britain’s electricity. Although this is expected to decline as coal continues to be phased out, it highlights that there is still a lot of work to be done before it can be eliminated from the UK’s energy mix entirely and it is unlikely to occur within the next few years.
Nevertheless, another positive outcome from 2017 was the increased prominence of wind generation as part of the energy mix. In fact, in total Britain’s wind output increased by 14 TWh between 2016 and 2017. To put that amount into perspective, it is enough to power 4.5 million homes and more than the annual expected output of one of the two new reactors being built at the controversial Hinkley Point C nuclear power station. Contrasted against Hinkley Point C, which is set to become the most expensive power station in the world with a current estimated final cost of £20.3 billion, the effectiveness and value of wind generated energy seems even greater. This is because, in addition to the amount of energy generated, the cost is also significantly lower with two of the winning bids from offshore wind developers in the latest round of government auctions for low-carbon electricity having a strike price of £57.50 per MWh. This is contrasted against the £92.50 per MWh strike price for Hinkley Point C which was made in 2012 and is pegged with inflation.
The significant improvement in wind was perfectly complimented by the increase of solar generated power. In 2017, 12GW of solar was generated, surpassing the 2012 estimated forecast of 1GW for 2020. This led to what has been termed by the National Grid as the ‘greenest summer ever’. A point most apparent between the period of 21 June and 22 September 2017, when the carbon intensity of the grid – as measured in grams of CO2 emitted per KWh of power generated – more than halved from its level over the same period four years ago. In addition to this, the summer of 2017 saw 52% of its power from low-carbon sources in comparison to 35% in 2013. Duncan Burt, acting director of operations at National Grid summarised the greenest summer ever by claiming that “we’ve gone from renewables being a part of the mix to often being a significant, majority part of the mix.”
In the wake of this positive news came a warning from the UK Energy Research Centre that balancing intermittent wind and solar would increase costs if the grid is not made more flexible with new measures, such as implementing energy storage solutions. This emphasised the importance of energy storage solutions, such as Powerstar’s VIRTUE, role within the low-carbon future of the new energy landscape and underpinned the need to utilise its ability to be installed in conjunction, and where possible, integrated with renewable energy in order to avoid curtailment of renewable sources on the grid and maximise its output, stability and potential.
Throughout 2017 it was impossible to miss that energy storage solutions in general, whether utilised as a solution to maximise renewables, provide energy cost savings, as a tool to improve the flexibility in the usage of energy or offer supply resilience or indeed, all of the above, have witnessed unrivalled growth. Towards winter 2017, there were encouraging claims that energy storage would both double six times between 2016 and 2030 on a global scale and be critical in supporting the grid to balance demand leading to an increase in the security of the supply across the UK. It is anticipated that energy storage solutions will continue to hit the headlines throughout 2018 with Bloomberg New Energy Finance analyst Yayoi Sekine claiming “The industry has just begun. With so much investment going into battery technology, falling costs and with significant addition of wind and solar capacity in all markets, energy storage will play a crucial part in the energy transformation.”
The final defining achievement for the energy industry in 2017 to be discussed was the UK governments’ announcement that there will be a ban on sales of all new petrol and diesel cars and vans in 2040. This paved the way for electric vehicles (EV) to gain greater adoption and has already seen carmakers such as Volvo and Jaguar Land Rover commit to making only electric or hybrid cars by 2019 and 2020 respectively. Additionally, this month it has led to an announcement from Ford that it will invest $11 billion in electric vehicles by 2022 and have 40 hybrid and fully electric vehicles by that time. However, it must be acknowledged that this positive movement will require huge changes to the energy infrastructure as well as to British private transport for this to become a reality.
The latter is due to issues such as range anxiety, price and availability of EV charging points, all of which need to be resolved before the UK can deliver the same level of convenience with an electric vehicle as is currently experienced by petrol/diesel car owners. It is clear that these changes need to begin immediately in order for the 2040 target to be achieved as well as for the transition to be as smooth as possible and to allow for any teething problems to be addressed with minimum impact and consequence.
In closing, it is undeniable that 2017 was a hugely significant year for clean energy and the proposals made by the government within the Clean Growth Strategy and Industrial Strategy indicate that record breaking achievements in clean energy could become an annual trend. However, there are still some causes for concern, such as the supporting infrastructure for renewables, that require improvement if the transition to the new energy landscape is going to be as smooth as possible.