What does the UK’s renewable energy industry want from the next Government?

The next UK Government will have a long to-do list to put the nation on track for a decarbonised electricity mix, whether by 2035 or 2030. Here, we look at the key policy actions the industry is calling for.

What does the UK’s renewable energy industry want from the next Government?

Pictured: Race Bank offshore wind farm. Image: Orsted

The UK’s largest political parties will outline their general election manifestoes this week. Thought leaders from the renewable energy generation sector have gotten ahead of the curve – several industry associations released their policy wish lists earlier this month.

Below, we summarise the shared key themes from these industry recommendations.

Bold, time-bound targets

The incumbent Government has set targets for the UK to host 50GW of offshore wind by 2030,10GW of low-carbon hydrogen generation capacity by 2030 and 70GW of solar by 2035.

Ministers have long been asked to set similar targets for other forms of renewable energy generation, plus energy storage.

Solar Energy UK wants the next Government to set an interim goal of 50GW of solar by 2030, up from 20GW at present. By the same date, in its opinion, the nation should strive to host 30GW of energy storage, up from a current baseline of 8GW.

The UK Marine Energy Council similarly wants to see a 1GW tidal stream target and 300MW wave energy target for 2035.

The hope is that these time-bound, numerical targets can be used to focus minds and develop supporting policy mechanisms with the appropriate urgency.

Business model clarity

Of course, setting a target in and of itself does not guarantee that anything will change.

The UK is falling down the international rankings of the most attractive destination for international clean energy investors, with many commentators observing that this is partly down to the short-termism and chopping and changing that resulted from two changes in Prime Minister in late 2022.

The Association for Renewable Energy and Clean Technology (REA) wants the next Government to publish its timetables for the Contracts for Difference (CfD) auction schemes three years in advance, to build investor confidence. Timetables should include a minimum budget and detail on what level of budget will be allocated to emerging technologies like floating offshore wind and geothermal.

The REA is also advocating the finalization of business models for fast-emerging technologies, such as carbon capture and storage (CCS), building on learnings gleaned from sectors such as hydrogen. This move would clarify how, exactly, the Government would de-risk investment in nascent technologies beyond the initial CAPEX requirements.

Another move that will be key to unlocking private funding is the finalization of the Green Taxonomy, which will define which financial activities can be classified as ‘sustainable’ or ‘transition’ finance.

Additionally floated by the REA and Solar Energy UK is the need for more clarity on how homes and businesses can generate an income by exporting solar to the grid.

Accelerated work on planning and grid connections

Connection delays are a universal headache across the UK’s clean energy sector, regardless of technology type or project size. Contributing factors include grid capacity constraints, connection queues blocked by ‘phantom’ projects and burdensome planning processes overseen by underfunded councils.

The Energy Networks Association (ENA) has stated that building new transmission infrastructure takes ten years on average – of which about seven years is accounted for by planning.

The current Government has kick-started a grid reform process in partnership with regulator Ofgem and the National Infrastructure Commission. Industry thought leaders are seeking assurances that this will continue – which seems likely, given the focus of all major parties on the energy transition. But there are also calls for more speed and more ambition.

The REA wants the next Government to commit to a significant reform of planning guidance for renewables within its first 100 days. Reforms should be implemented by the end of 2025 and have a headline ambition of halving the time taken for planning decisions, in the Association’s view.

Similarly, the ENA wants to see a reform to the connection process that goes beyond one-off industry initiatives delivered in a disjointed manner. Stronger criteria should be set for entering and maintaining a place in the queue, to prevent unviable projects from queue-blocking. The queue should also be structured in a manner that prioritises the projects needed for the UK to hit its binding decarbonisation targets.

An annual progress report on grid connections should be presented to policymakers by Ofgem or a similar body, the REA is advocating.

Robust measures to enhance skills and build out supply chains  

The UK’s skills strategy has not been updated since net-zero by 2019 was enshrined in law in 2050. Chris Sidmore’s Net-Zero Review concluded that the government is underselling the potential of the transition for generating well-paid jobs across the country and failing to plan to grow a large enough clean energy workforce.

Under Boris Johnson, the Government did launch a Green Jobs Task Force to glean recommendations from the private sector and academia. However, it has not comprehensively updated strategies as a result of this work, instead launching partnership initiatives sporadically.

As a priority, the REA wants the next Government to consult on a “comprehensive” green skills programme for those entering the workforce and those in need of re-skilling alike.

Bringing some of the UK’s clean energy manufacturing on-shore could help to create more jobs and avoid some of the disruption risks associated with international procurement.

Make UK, an industry body for all kinds of manufacturers, has urged the next Government to set out a modern industrial strategy which maximises the opportunities presented by the net-zero transition and digital innovation. Delivering such a strategy, it admits, would require more resource within the Cabinet Office.

Another key part of growing the industry will be implementing a Carbon Border Adjustment Mechanism (CBAM), to prevent the UK market from being flooded with imports that are low-cost and high on embodied carbon. The UK is set to launch a CBAM in 2027 and the next Government will have the task of aligning the scheme with the EU’s.

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