UK: Renewables penetration at its lowest since 2010

renewable energy uk
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The penetration of renewable energy in the UK has reached its lowest level since 2010, according to consulting firm K2 Management, and as a result, the country is likely to miss its 2035 and 2050 installation targets.

This slow pace of growth is due to a paucity of long-term, clear investment pathways for capital investors to become involved in new project development.

While medium-term deadlines have helped drive new project ambitions for UK offshore wind, there is little long-term investor view for project returns out to 2050 or beyond.

Therefore, long-term clarity must be provided for future on- and offshore wind development post-2030, according to K2 Management.

K2 Management says the UK needs to change its market structure for renewable energy to accelerate the pace of installation and achieve its target of generating 100% of electricity from clean resources by 2035 and to become a net-zero emitter by 2050.

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To improve its renewables market, K2 Management recommends the UK:

  • Relax some of its policies that make wind energy development difficult.
  • Develop long-term market mechanisms to increase the rollout of energy storage capacity. The study states that by incentivising storage projects, the UK is able to avoid market challenges such as the one being faced where energy prices continue to rise. An increase in storage capacity will enable utilities to use renewables and affordable energy to provide baseload poer and get rid of coal or gas which are expensive.
  • Provide new auction rounds for fixed and floating offshore wind energy beyond 2030.

Gary Bills, director of projects at K2 Management, said: “The capital investing in renewable energy projects is interested in stable, long-term returns.

“But that future supply of investment is at risk, as project development tails off after 2030. And while we’ve made some fantastic progress with offshore wind under the accelerated development model, long-term investor interest in renewables will only be secured through a pipeline of on and offshore wind projects beyond 2030.”

To fully unlock the potential of energy storage to stabilise the UK energy market, Bills added: “We also need to rapidly get a grip on storage. For this to take place, we, therefore, have to incentivise the investment for storage technology – either through a tariff or CfD mechanism, which enables us to co-locate the technology at new and existing wind and solar project sites, and deliver clean power outside the intermittency windows of renewables.”

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