Bruce Woodman, managing director of PEP Renewables reviews the new government’s recent energy strategy announcements from overturning block on new onshore wind turbines to the launch of the publically owned Great British Energy and establishment of Mission Control for Clean Power
The transition to net zero is the biggest energy industry upheaval for 50 years. The newly-elected Labour government requires utility-scale investment from the private sector for grid improvements and new, low carbon, generating plant. For example, National Grid alone says it needs to invest £60 billion over five years; it is not sitting on even 10% of that liquid capital .
To compete for investment on the international stage the UK needs to offer certainty: a prolonged period of stable, positive, low-carbon policy. We need to initiate policies across the board that are pro-renewables, and that fall in line with the positive public opinion that exists across voters of all political persuasions.
Having called, prior to the election, for removal of the block on new onshore wind turbines in England, and streamlining of the planning process for solar PV, we were pleased to see both issues addressed within the first few days in power.
We welcome the rapid and decisive action, announced on 8 July by Chancellor Rachel Reeves, to drop the de facto ban on new UK onshore windfarms. Thanks to the simple removal of two footnotes to the National Planning Policy Framework, Labour’s commitment to double onshore wind capacity by 2030 is one step closer. We look forward to Parliament’s formal ratification of this significant step.
Onshore wind power is cheap, popular with the majority of the public and can be deployed quickly and close to centres of demand.
The pace of change continued with the 13 July promise, from Energy Secretary Ed Milliband, to triple the amount of solar power by 2030.
His plans include: re-examining restrictions on the placement of rooftop solar; revised standards for new-build properties and the approval of three large in-ground solar farms – which could deliver about two-thirds of the solar energy installed in the whole of 2023. We would encourage co-locaion of solar with wind, to make the best use of grid capacity for as much of the year as possible.
Industrial and commercial roof space is a valuable and under-utlised resource that can be simply and cost-effectively harnessed for self-generation of predictably-priced, low carbon solar power – whether new build or retrofit.
Meanwhile, we are encouraged that the new government has confirmed its commitment to the publically-owned Great British Energy company, while also announcing a Mission Control for Clean Power and a £7.3 billion National Wealth Fund.
The combined objectives of these new organisations include:
• Turbocharging the UK to clean power by 2030 and leading the global net zero race;
• Breaking down barriers and accelerating progress on clean energy projects;
• Speeding up the connection of new power infrastructure to the grid;
• Accelerating decarbonisation technologies;
• Boosting Britain’s energy independence;
• Tackling climate change;
• The planned allocation of £1 billion for CCUS and £500 million for green hydrogen.
We believe that the National Wealth Fund (NWF) will support industrial growth and, notably, green hydrogen production – both of which are most welcome. However this requires clean, low carbon energy, which needs to grow in step. Hopefully the fund can work in tune with its sister initiatives, GB Energy and the Mission Control for Clean Power, to speed up the adoption of renewables nationally.
The NWF needs renewables growth in order to be a success, and so its remit should include the provision and use of renewable energy as a material investment consideration. Any industrial and investment plan will have to be underpinned by renewable energy for it to be fit for the future.
While we are encouraged by these quick wins at headline level, much of the follow-on detail from our original wishlist remains:
- Setting national planning and environmental processes for the development of renewables-to-hydrogen projects
- Restructuring the requirements on the Electricity System Operators (National Grid, Scottish Power, SSE and the proposed National Energy System Operator) to provide fast and transparent connection procedures
- Restructuring the requirements on the Distribution Network Operators (DNOs) to provide fast and transparent connection procedures
- Grandfathering government support scheme rights at project level to remove investment risk
- Encouraging ownership of renewable energy projects by companies for their own use, through tax breaks
Grid-scale change will take many years, during which time we are likely to see a shortage of green energy and higher costs. However, the industrial and commercial sector can deliver company-scale change now by choosing to own and operate renewables either on- or near-site (within 10 km). Ownership delivers secure, green electricity and Renewable Energy Guarantees of Origin (REGOs) that are greenwash-free. That green electricity can be used to power, heat and refuel transport for businesses, turning each company’s energy transition goals into actions.
Onshore wind and solar PV pay back the carbon used to build them within around a year, and then produce zero-carbon electricity at around a third of the cost of Hinkley ‘C’ for 25 years or more. Furthermore, they can be developed and built quickly.
The policy recommendations made above would provide even further impetus for many more businesses to own and operate on-site renewables. Owning the means of energy production gives companies control over their energy supply, security and costs: boosting profits, providing essential energy security, and having a genuine plan to deliver on net zero goals.
First signs suggest that this election could be a once-in-a-generation opportunity to address the transition to net zero; with long-term cost and energy security benefits for business. The new government has made some rapid and robust policy pledges that, properly executed, could provide companies and their investors with much needed regulatory certainty and economic predictability.
