Shrinking solar deployment darkens UK’s record low-carbon electricity mix

Despite low-carbon sources providing more than half of all UK energy generation for the second time, the Government has been urged to address policy barriers that have "unnecessarily impeded" the development of solar technologies over the last two years.

Government data released on Thursday (26 October) revealed that a three-month period between June and August 2017 marked the second time the generation from renewables and nuclear accounted for more than half of the UK’s electricity mix. The Energy Trends data revealed that low-carbon sources set a new record, with 53.4% of the UK’s electricity sourced from technologies such as wind, solar and nuclear.

The data acts as confirmation for provisional statistics released at the end of September. The record generation is an increase of almost 7% compared to the same time last year. Nuclear’s share of the mix increased from 21.3% in the second quarter of 2016 to 23.6% in 2017. The UK Government factors fewer days lost to outages as the reason for the increase, as there was no change in capacity.

Renewables’ share of generation reached a record high 29.8% in the second quarter of 2017. Wind capacity growth was one of the main factors in this increase, with capacity increasing by 21%. Output from coal also fell to a record low of 2.1%.

However, the Renewable Energy Association (REA) notes that solar photovoltaic (PV) deployment growth has been declining for the last two years. Following a 50% growth in capacity between January and September 2015, growth fell to 18% between the same months in 2016 and in 2017 deployment has only grown by 6%.

The REA believes that the decline in growth stemmed from Government policies restricting routes to markets for solar PV technology. In December 2015, the Government announced a 64% cut to domestic solar tariffs, for example.

Commenting on the second-quarter data, REA’s head of policy and external affairs James Court said: “This is another milestone in the journey towards a more affordable, flexible, and consumer-focused energy system. This success has been facilitated by the rapid fall in cost for renewable technologies such as solar and wind, which are now the most cost-effective means of new power generation.

“The Government must address the policy barriers which have unnecessarily impeded their deployment over the last year and give the industry clarity around how the market will be structured in the 2020’s.”

Cost of Energy

While subsidies have helped the solar industry grow, a major new report published earlier this week highlighted the adverse impact they were having on business energy costs. The Cost of Energy review, led by economist and academic Professor Dieter Helm, examined how the costs of electricity can be kept as low as possible as the UK looks to achieve security of supply while meeting carbon goals.

The review found that ‘legacy costs’ from key green policy frameworks such as Renewables Obligation Certificates (ROCs), feed-in tariffs (FiTs) and Contracts for Difference auctions (CfDs) are a major contributor to rising energy costs.

It recommended that these mechanisms should be ring-fenced into a legacy bank to exempt businesses from all associated costs. FiTs and CfDs should then be gradually phased out and merged into a unified ‘Equivalent Firm Power’ (EFP) capacity auction, according to the review.

With solar growth shrinking, the Energy and Climate Intelligence Unit (ECIU) has warned that onshore wind could be headed for a similar fate. The non-profit believes that 1GW of new onshore wind farms would be £30m cheaper a year than offshore wind, and £100m less than new nuclear or biomass plants, but that “outdated” policies could cost the UK around £1bn over the next four or five years.

Onshore wind has been locked out of the UK’s CfD framework since 2015, with the current auction process only open to less established renewable technologies such as offshore wind. Last month, the latest CfD auction saw the cost of offshore wind set a record low-strike price of £57.50 per MWh.

Matt Mace

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