On the face of it, the task that lies before us would seem a relatively simple one.
After all, the desire to replace our environmentally damaging reliance on fossil fuels with a much cleaner, greener energy source has long been on the agenda of both campaigners and politicians alike.
The doubters seem to have accepted the need for change, the government is making all the right noises when it comes to setting net zero targets, and the awareness of what needs to be done in order to nurse our sick planet back to health has never been higher.
From the fixed bottom or floating off shore wind facilities to onshore wind sites and solar PV developments, the need to both source and deliver environmentally friendly solutions has become big business with some serious players at the table intent on turning the UK into a clean energy superpower.
Such a charge of enterprise can only be good for our overall goal of achieving a net zero planet, but the industry itself is now moving at such a speed that the physical and regulatory infrastructure is struggling to keep up.
An example where this is demonstrated is the current crisis surrounding new grid connection timeframes with an ever-expanding queue featuring larger and larger connection offers that are not even afforded a fixed location for connection as the current regulated offers system is reviewed.
The key to success will be ensuring those of us who have ventured out into the field of green energy are supported with a certain degree of protection in what is still a fluctuating market.
A recent report from Renewable UK – the trade association supporting the UK renewable energy sector – highlighted the need for a more flexible growth structure to not only ensure the continuing and increasing procurement of renewable energy, but also provide greater security for those investing in the projects.
‘Revitalising the Contracts for Difference Scheme’ warns the process in its current form will result in ‘failure to reach our legally binding net zero targets… and undermine investor confidence, jeopardising the capital needed for future projects’.
The CfD auction system has served its purpose in providing a robust system under which developers can operate safely with a degree of financial protection.
Guarantees of fixed payments shield businesses from fluctuating market prices, encouraging further investment into renewable energy production and help to limit the prospect of financial losses, whilst keeping wholesale prices stable through delivery of capacity.
But while the recent auction round six was by far the biggest ever designated by the government-owned Low Carbon Contracts Company (LCCC), with financial support of more than £1m up for grabs across the entire renewables sector, we must heed the warnings and continue to evolve.
The Renewable UK report, while highlighting the undoubted successes of the scheme in helping to deliver the 57GW of capacity currently installed in the UK, states that progress is simply too slow and that action needs to be taken sooner rather than later or we risk undoing much of the great work already achieved. Notably, no figures are provided to show how many qualifying projects were unsuccessful in the auction. We know o fat least one!
Perhaps the most sobering of all stats to come out of the report came from the Climate Change Committee which was quoted assaying that by 2030 ‘annual offshore wind installations must increase by at least three times, onshore wind installations will need to double and solar installations must increase by five times’.
That’s a significant amount of infrastructure required in a relatively short space of time and the CfD process as it currently stands is simply not equipped to deliver what is necessary.
Among the report’s recommendations are calls for greater long-term security to developers by setting target capacity per auction pot, an increase in the tenure of CfD contracts from 15 to 20 years and the introduction of more flexibility over project delivery times.
The delivery timeframes of approved solar projects are certainly a concern as post planning completions, which used to take between six and twelve months, are now being pushed out to more like two years as we struggle with frustrating supply chain issues.
It is hard to argue with the report’s findings. Especially at a time where there is a real desire within the industry to make this work.
Analysis of the recent CfD auction offers proof of what has become a burgeoning industry as 9.6GW of renewable energy capacity was secured across 131 projects.
The solar industry alone was awarded 4.5GWp-dcacross 93 sites, ensuring the highest capacity ever offered across all six auction rounds since they started back in 2014.
There were 47 different developers involved in the contracts awarded – more than double the 22 who were successful in auction round five last year – while of those 47, only 19 had previously received CfD support, meaning there were 28 new developers/owners.
The arrival of so many new stakeholders should certainly be heralded as a positive move for the industry as a whole, but are the levels of support sufficient enough to maintain them, and also attract the new investors needed to hit those necessary infrastructure numbers?
Without sufficient backing in place to maintain them, there is a very real danger that some businesses will fade away just as quickly as they appeared, with increased development and regulatory costs creating major cashflow issues.
That would not be a good look for the green energy sector.
In a report from the ‘Our World in Data’ website, the UK’s share of primary energy consumption coming from renewables in2023 stood at 20.52%. While that is proof that we are making progress, it is still a figure which tells us we have a long journey ahead.
The time to invest in, and develop the infrastructure we need is right now – so that together we can secure the future of our planet before it really is too late.
Sounds simple? Let’s hope so.
