Scottish Power boss: Onshore wind and energy storage policy key to net-zero transition
EXCLUSIVE: Following the success of its Offshore Wind Sector Deal, Scottish Power's chief executive would now like to see the UK Government implement similar policy frameworks for onshore wind and energy storage.
Published in March, the UK’s Offshore Wind Sector deal has been credited with keeping the nation’s renewables market attractive to global investors in the face of uncertainties caused by Brexit.
It sets a long-term vision for the industry under an overarching aim to ensure that one-third of the UK’s electricity will be generated at offshore wind facilities by 2030, by which point the Business, Energy and Industrial Strategy (BEIS) department believes that the number of jobs in the sector will triple.
Now, as it looks ahead at how to set roadmaps for reaching its newly introduced 2050 net-zero goal, Scottish Power’s chief executive officer Lindsay McQuade would like to see the UK Government produce similar policy frameworks for energy storage and onshore wind.
Scottish Power has been investing in wind power since the 1990s when, McQuade told edie, the sector was viewed as “tree-hugging” and not profitable in the short or long term. Since then, the company has shifted to 100% wind power, having sold off its last gas assets last autumn.
But while the company has a sizeable portfolio of onshore wind farms, the majority of its growth is in offshore arrays, including East Anglia One, which should take the crown of the world’s largest when it opens in 2020.
— ScottishPower (@ScottishPower) May 15, 2019
McQuade puts this trend down to the decision to exclude onshore wind assets from the Government’s Contracts for Difference (CfD) process in 2015 and the closure of the Renewables Obligation (RO) scheme in 2018 – both policy decisions she would like to see re-assessed in the early stages of the UK’s journey towards net-zero by 2050.
“I find that the Government has worked really hard to create the onshore wind industry; the Renewables Obligation did exactly what it was intended to – fostering an industry and creating sizeable generation capacity,” McQuade said. “Indeed, it was the platform for offshore wind.
“And the CfDs are a market mechanism that’re much more competitive in focus and aimed at driving costs down. We’d like to see that policy tool used to best effect, so the decarbonisation agenda can be helped in the most cost-effective way.”
Value for money
McQuade went on to highlight the cost benefits of policy support for onshore wind, citing a recent RenwableUK study which found that allowing onshore arrays to compete for Government subsidies at auction could reduce the average household electricity bill by £50 per year. Moreover, Scottish Power’s own research has found that participation in the CfD and the stabilisation mechanism would cut the cost of wind power by £6-12 per MWh.
With calls to ensure that the Government sets up policy frameworks which support a “just” transition to a zero-carbon economy, in which no geographical regions or social classes are left behind, now mounting, McQuade sees onshore wind as a clear choice.
“For me, onshore wind is not only the cost-effective option but also readily deliverable,” she said.
“There is a lot of activity in the development pipeline, which has been fostered through the RO period and through CfD, showing that onshore is ready for that competition. All of the tools are there and are, in part, what I’d like to see reinvigorated”
The bad news is that we could be waiting some time for this “reinvigoration”. Speaking to the House of Lords earlier this week, junior business minister Lord Henley said that Ministers currently have “no plans” to reverse its decision to exclude onshore assets from the CfD auctions, due to the fact that offshore turbines and farms can be built on a larger scale.
Recharging your batteries
To complement its shift to 100% wind generation, Scottish Power recently made its first major investment in energy storage in the form of a 50MW battery system at its 215-turbine Whitlee wind farm.
McQuade told edie that the project, due to be completed at the onshore facility by the end of 2020, will be the first of many for the company, which has pledged to funnel £2bn into UK-based renewable energy infrastructure by the end of the year.
“We’ve got huge plans in this space because we see a synergy in operation between new battery storage and existing onshore wind infrastructure,” she explained.
“I would love to see onshore wind, solar and battery storage all coming together to help the electricity system of the future become a reality.”
Despite the ambition of her own company, McQuade noted that she had seen other firms in the utilities space and beyond deterred from investing in energy storage by “complex” policy and revenue mechanisms, as well as the risks involved for investors in backing a technology which is in its relative infancy.
In response to the issue, the UK Government is providing £20m through a “Storage at Scale” competition, to help commercialise energy storage projects that would be able to compete with more established technologies. In the private sector, investment firm Thrive Renewables and renewable project developer Aura Power are similarly offering businesses the chance to access to battery storage installations at no extra cost in a bid to boost uptake.
For McQuade, however, the solution lies in helping businesses to view energy storage as not just a suite of technologies that could be installed on-site at scale, but as something that will “re-shape” the relationship between energy users, generators and suppliers.
“You can talk about the scale of storage – from pump storage, which provides large-scale mega-batteries, to lithium-ion batteries, which are one of the most successful technologies right now – but, at the end of the day, we’re all going to need batteries in our homes and at our offices when we’re all driving electric cars,” she concluded.
“Our relationship with energy and the dynamism of that interaction between assets and consumers is undoubtedly going to change.”