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Change of climate: What lies ahead for the UK's energy supplies?

Solar farm

At a time of rapid change, what does the future hold for the UK’s energy supplies? Adrian French of WYG offers a view

Adrian French of WYGFor onshore wind and solar, it has been a torrid few months since the General Election. Both sectors were making sustained progress towards achieving grid parity with fossil fuel energy generation. Recent government statistics showed that renewable energy had, for the first time, surpassed coal in supplying the UK’s electricity for a whole quarter.

Despite this progress, significant government cuts to renewable subsidies, with more planned, mean that, for the first time, the UK has dropped out of the top 10 in the Ernst & Young ‘Renewable Energy Country Attractiveness for Investment Index’ (September 2015).

"This is in stark contrast to progress from major developed and developing countries around the world, which are pledging greater commitment to renewables"

This is in stark contrast to progress from major developed and developing countries around the world, which are pledging greater commitment to renewables. According to European Commission projections, the UK is one of the lowest ranking EU countries for the percentage of energy produced by renewables.

Set against these subsidy cuts and damage to its own renewables industry, the government will be expected to clearly set out how it proposes to deliver on its binding carbon reduction commitments at the UN Climate Change Conference in Paris this December. The context of failing to address the challenges of climate change were highlighted last week by the governor of the Bank of England when he stated that “climate change threatens global financial security and prosperity” and that these challenges “pale in significance with what might come”.

Prospects look healthier elsewhere in the energy sector. Chancellor George Osborne has signalled the Government’s strong support and financial backing for Hinkley Point C and further overseas investment in new nuclear plant. The granting of consent in recent months for major gas fired plant in Mid Suffolk, South Wales and Lincolnshire signals the government’s increased reliance on new centralised natural gas power stations to provide much needed new capacity. This is alongside the planned closure of our ageing conventional coal, oil and nuclear fleet over the next decade.

The government also strongly supports the development of the fracking industry. Recent measures include fast tracking of planning applications to actively search for, and exploit, the UK’s shale gas reserves and penalties for poorly performing local planning authorities.

So what does the future hold for power generation?

- A coherent energy strategy? Whilst desperately needed, there is still no sign of a long-term strategy. Without it, policy is likely to develop piecemeal. But the Energy Bill, due in 2016, should provide more clarity on government proposals to reduce UK carbon emissions and decarbonise the energy sector

- More decentralised generation – smaller scale distributed generation is expected to progressively contribute to the baseload with centralised plant focusing more on peak power generation. Small to medium scale biomass and gas or diesel-fired short-term operating reserve plant are already exploiting this opportunity as the National Grid seeks to balance demand with supply

- Offshore wind – with a number of projects being shelved and others failing to secure consent, offshore wind will retain an important, albeit diminished role

- Onshore wind – very much in survival mode. There will be more focus on ‘subsidy free’ wind farms, community schemes and projects able to secure power purchase agreements. New planning restrictions will require proposals (in England) to be in areas identified for wind developments, and to have public backing - a big challenge for developers

- Solar – with the global costs of solar falling there will be a place for commercial and domestic solar. But, again, this will be expected to be subsidy free, and larger scale projects will have to be on the right sites. Despite lower irradiation levels, Scottish government support for renewables looks set to continue and the recent statement from the Chief Executive of Shell that solar will be the ‘dominant backbone’ of the global energy system in the coming years are positive messages for the industry.

"Energy is fundamental to sustaining the recovery from recession and delivery of the government’s infrastructure plans"

In the medium to long term, the energy mix is likely to include some shale gas fracking, further gas fired power stations, some new nuclear, and increased contributions from renewables including onshore wind, solar, pumped storage and river run hydro, wave and tidal power.

We should also see continued emphasis on energy conservation, including investment in grid upgrades, smart grids and demand management technology, battery storage, European interconnectors, investment in carbon capture and storage, and district heating and energy masterplans.

The decarbonisation of the energy sector, security of supplies, and the cost of energy are key concerns for the government. Energy is also a fundamental to sustaining the recovery from recession and delivery of the government’s infrastructure plans. So government statements to the UN later this year will be watched with interest.

Adrian French is director of planning (energy and infrastructure) at WYG


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