Compared to our European neighbours, the UK has some of the most ambitious energy targets this decade, but faces almost unrivalled problems in reaching them, new research from the nation’s leading advocates for renewables indicates.
Results for the second year of the Energy Transition Readiness Index (ETRI), prepared by polling members of the Renewable Energy Association, show that the UK is dogged by politicians’ short-term NIMTO – “not in my term of office” – concerns and evasions, and so lacks consistency towards longer-term goals of decarbonisation.
The results, the REA tracking study concludes, are continuing uncertainty and second-guessing among energy users, suppliers and investors about the best way to meet Net Zero economically.
Investors, in particular, will be attracted to the UK’s energy transition only if they can see patterns of clear governance and regulatory stability, says the report’s authors. At present, the signals from Richi Sunak’s administration are simply not strong enough. The PM is pictured appointing new D-ESNZ secretary of state Claire Coutinho in August.
The Energy Transition Readiness Index (ETRI) 2023 assesses electricity markets, their workings and their outlooks in 14 European countries. The REA publishes it with sponsorship from power engineers Eaton and investors Foresight Group.
While Britain has risen since last year to sit in front of Germany, Italy, and Switzerland, in 2023 it lags others countries benefitting from better evolved flexibility markets delivering fair, transparent, and simple access.
Flexibility is essential to stabilising regional and national grids relying lots of intermittent clean generation. The best way for countries to attain flexibility, say the ETRI authors, is by encouraging new spending on demand-side response kit such as batteries and changed behaviour such as load-shfiting around the clock.
Open markets for flexibility must be designed and delivered. Despite tinkering with pilots, Britain lags our neighbours.
Respondents to a survey underpinning the report say progress towards Britain’s energy transition badly needs a root-and-branch leg-up such as President Joe Biden’s Inflation Reduction Act.
Slowing the UK’s energy transition, as dictated in recent months by perceived short-term political gains for Sunak’s Conservatives, will be severe in its long-term financial costs, the REA repeats.
Taking its helicopter view across Europe, the ETRI 2023 report recommends:
- Creating open, easily accessible market for flexible low-carbon assets, and allowing them to compete head to head with carbon-intensive generation and storage
- Identifying future needs in low carbon flexibility;
- Choosing then speeding up the best reforms to flex markets;
- Tear down process barriers holding up cleverer DSR technologies
REA policy director Frank Gordon observed: “UK policy must shift away from prioritising the short term, if we are to meet our ambitious targets and increase investment certainty“.
Big growth is needed in Britain’s flex resources, Gordon argued, if the country was to meet its aspiration to generate 132TWh without carbon by 2030. Without them, consumers would be footing higher bills.
“At last year’s publication of the ETRI study, we welcomed the Government’s warm rhetoric but called for significant action. This year the need for urgent need for action still stands, but we don’t have the luxury of the government’s warm words“.
Siobahn Meikle, managing director of power management multinational Eaton, said: “The survey’s good news is that Britain is well placed to attract investment. The UK has scored 15% higher on average for ‘investor attractiveness’ since the survey started in 2019.
“There is clear progress. A steady rollout of EV charging infrastructure, 55% of UK homes now with a smart meter, and flex markets are opening up. But the government still has work to do to set out the long-term policies that will consolidate investor confidence.”
Chris Tanner, chair of the REA’s finance forum and a partner at investors Foresight Group, added: “Improvements seen in various countries underscore the fact that, with the right policies, the UK, and Europe have potential to attract significant investment in the energy transition”.