Independent renewable generators supply 7.6% of UK power demand with £1 billion of clean electricity
1 August 2018, News release from SmartestEnergy Ltd
Innovative entrepreneurs are "indispensable” to low-carbon transition
Independent renewable generators are central to Britain's low-carbon
transition and now supply 7.6% of UK power demand with clean
electricity, reveals SmartestEnergy's fourth annual Energy Entrepreneurs
Report, released today.
Last year energy entrepreneurs outside the traditional electricity
supply sector invested over £376 million in 1007 commercial-scale
projects, adding 2.4GW of new renewable capacity.
In the four years since SmartestEnergy began tracking independent
renewable energy generation across the UK, almost £2.5 billion has been
invested in projects above 50KW, more than doubling independent capacity
from 4.7GW to nearly 11GW - 40% of UK renewable power.
In 2015 independents generated more than £1 billion of electricity
from a total 5,467 projects, enough to power 6.2 million households and
the equivalent of taking 8.9 million cars off the road.
Robert Groves, CEO of SmartestEnergy, said: "Energy entrepreneurs
are indispensable to Britain's energy future, driving change towards a
flexible, efficient, low-carbon power system. They are creating new
jobs, improving our energy security, and helping to meet climate change
targets, and there is evidence that rapid growth in renewables can bring
down electricity prices.
"Traditional electricity supply companies are in no shape to deliver
the change that is needed. The Big Six are suffering in this low-carbon
transition - share prices and dividends are falling, companies are
laying off staff and some are even breaking themselves up. These
incumbents are slow moving, beset by problems, and lack funds for
investment.
"By contrast, the energy entrepreneurs are small, nimble and
innovative. They have attracted a global pool of capital to invest in
Britain's renewable capacity and are taking advantage of technologies
like wind and solar which are rapidly coming down the cost curve. They
are starting to invest in battery storage which will play a key role in
our future energy system and offers exciting new business
opportunities."
Solar grows 83% but wind slows
Independent solar capacity grew by 83% in 2015 with 696 new projects
providing over 2GW of capacity despite the end of ROC (Renewables
Obligation Certificate) subsidies in April 2015. It is the dominant
technology in England and the second biggest in Wales.
Growth in onshore wind slowed with only 233 new projects across the
UK adding 263MW, a 7% increase in capacity - far less than the 690MW
added in 2014. This may have been due to factors such as increased
difficulty in securing planning consent or grid access in different
parts of the country, ahead of subsidy cuts in 2016. Nevertheless, the
technology took the lion's share of investment in Scotland and was also
top in Wales.
Renewable developers were responsible for building 408 independent
projects last year representing 89% of the new capacity, a total 2.15GW.
They have built more than a third of all independent renewable projects
(37%), and 77% of the market by capacity. Many sites are sold on to
fund managers after completion as they offer a steady long-term return.
Businesses invested in 155 new onsite generation projects with a
capacity of 99MW, saving on rising power bills, boosting energy security
and cutting their carbon footprint. Retailers and wholesalers with
supermarket and warehouse roofs ideally suited to solar panels were the
most active sector, developing 88 new projects. There are now 728 sites
around the country accounting for 13% of all renewables projects and 6%
of capacity. They produced almost £100 million worth of electricity in
2015.
Farmers and landowners built 209 new projects in 2015 with a
combined capacity of 56MW, providing valuable new revenue streams, often
on low-quality land. Together they account for 28% of all renewable
projects and 5% of the market by capacity.
Waste disposal operators added 77MW with two big energy from waste
projects and a small sewage gas scheme. The sector provides 6% of
renewable capacity from 224 projects.
Eight new large-scale community projects added 10MW of new capacity
taking their share of the independent market to 1.65%. Across the UK 83
large-scale projects are now in operation generating nearly £16.5
million of power a year, providing revenue to support amenities in often
fragile rural communities.
Government must restore confidence to meet legally-binding climate change targets
Independent generators now face a crisis. Wholesale electricity
prices fell more than 20% in 2015, largely as a result of cheap oil and
gas. Although overall independent renewables capacity grew 28% over the
year the wholesale value of the electricity it generated dropped by more
than 4%.
This comes just as the government has axed the subsidies that
supported the growth of the sector, and uncertainty over future energy
policy is pushing up the cost of capital for renewables projects.
Growth is likely to continue while there are projects in the
pipeline with guaranteed subsidies, the report says, but it warns that a
policy framework supporting independent generators and investors is
essential for Britain to be confident of meeting its climate change
targets.
Britain has a legally binding commitment to source 15% of all
energy, including heat and transport, from renewables by 2020. To
support this it has set a target of generating 30% of all electricity
from renewables by 2020.
"Government must ensure that the right framework is in place to
ensure continued investment in building our renewables capacity," said
Robert Groves.
"It needs to restore confidence to the industry by providing stable
policy and certainty. It should ensure that the capacity market allows
all participants to compete on a level playing field and it should work
with the industry to develop frameworks to encourage the roll out of
energy storage and maximise its ability to accommodate the growing
amount of renewables on the grid."
The report highlights the potential of battery storage, as
independent generators seek innovative ways to extract more value from
existing projects and make future projects viable. The first
independents are already installing commercial scale units, allowing
them to store intermittent solar and wind energy to sell when it is most
profitable.
Electricity storage has been identified as one of three key
innovations in a "smart power revolution" by the National Infrastructure
Commission, which could save UK consumers £8 billion a year by 2030.
Battery prices are falling rapidly, making it an increasingly
attractive solution for independents. It will also provide opportunities
to earn money by providing Demand Response and a range of other grid
services.
Growth in renewables varies by region
England, Scotland and Wales all saw double digit growth in
renewables projects in 2015, but differences in geography, climate and
planning consents are reflected in choice of technology.
England added more than 2GW of new capacity across 791 projects at a
cost of £316 million. It saw the greatest growth in capacity, 36%,
while project numbers were up 24%. Solar is the dominant technology
making up 52% of total renewable capacity, followed by onshore wind 17%
and energy from waste 7%.
Wales added 195MW of capacity in 108 projects at a cost of £31
million - a growth of 27%. It saw the greatest growth in projects, up
30%, albeit from a low base, while capacity grew by 27%. Onshore wind is
the dominant technology (47% of renewable capacity) closely followed by
solar (38%) and biomass (5%).
Scotland added 135MW of capacity with 108 projects at a cost of £30
million. Projects were up 14% but capacity only grew 6%. Onshore wind
accounts for the lion's share of renewable capacity in Scotland (85.6%)
with much smaller contributions from hydro (4.7%) and landfill gas
(4.4%).
The Highlands & Islands region of Scotland supplies 5.2% of all
independent renewable generation in the UK, the most active region. Its
571MW of mainly wind projects, include a significant number of
community-owned turbines in remote and rural locations. Fifteen new
sites take its total to 158.
Yorkshire follows closely behind with 503MW of capacity supplying
another 4.6% of independent renewable power. It added 74 sites during
the year to take total numbers to 469.
Cornwall, Devon and Somerset are hotspots for investment in solar in
particular with 738 sites across the region. They added 108 sites last
year and now account for 10% - or 1.13GW - of the total independent
capacity across the UK.
Independent Generation by County (Capacity, Projects, New Capacity, New Projects)
1.Highlands and Islands: 571MW; 158; 67MW; 15
2.Yorkshire: 503MW; 469; 89MW; 74
3.Cornwall: 423MW; 293; 101MW; 41
4.Cambridgeshire: 420MW; 120; 111MW; 19
5.Wiltshire: 401MW; 93; 202MW; 20
6.Aberdeenshire: 382MW; 148; 4MW; 13
7.Hampshire: 371MW; 125; 70MW; 14
8.Devon: 370MW; 262; 74MW; 42
9.Kent: 351MW; 108; 88MW; 20
10.Somerset: 337MW; 183; 66MW; 25