A new UK Renewables programme

 Renewables are doing quite well in the UK, supplying around 33% of is electricity, but there are worries as to whether the energy transition can continue. Business Green’s editor recently said ‘The policy framework that delivered the first phase of this historic transition is fast running out of road…those Ministers hailing the success of the UK's clean energy transition have been dining out on the policy decisions made by their predecessors. Since 2015 there has been a steady erosion of this policy framework’.

The UK is still well behind most other European countries in terms of the percentage of total energy supplied from renewables (around 10%), but it is catching up, helped by the large offshore wind programme. Some of problems have been due to the funding schemes used. While competitive mechanisms have their place, the UK experience with developing renewables has been mixed, with some at least of the mistakes arguably being due to an over zealous political belief in the efficacy of markets as a way to identify winners and get prices down rapidly.

It is true that we need to get costs down. Fortunately, that is happening- the technology is getting cheaper as the market expands.  We can argue about whether that is because of the competitive pressures, or due to the subsides, but the key thing now is - can can we ensure that falling costs compensate for the rising cost of rapid capacity expansion that is needed, so that consumer backlashes are avoided? Or must we expect to pay more to get to a green future? The signs are that the transition should not cost more, if well planned. Indeed, there are options for reducing costs at the local level via peer to peer trading: see the examples in the appendix below. Longer term, the develop of smart more efficient energy system should cut cost significantly.   

Replacing nuclear

More immediately, with the UK nuclear programme now in tatters, the issues of what to do next takes on a new urgency – with renewables waiting in the wings to help.

RenewableUK says that around 4.5GW of on-shore wind projects already have local planning permission but have been blocked from CfD support. SSE’s CEO has also argued that we need to be more ambitious about offshore wind . PV solar can also be expanded, particularly at the local community level with a FiT-type support scheme. Tidal Current Turbine technology needs more support (the 399MW Meygen scheme in Pentland Firth is stalling for lack of funding), wave energy possibly too, although it is less developed. Biomass AD, using wastes (not forestry wood combustion as at DRAX) needs more support, and CHP too, as part of an expansion of heat networks.

The power, heat and gas networks need reconfiguring to help deal with variable renewables with more electrical storage, more gas storage and more heat storage being added to increase system flexibility.  A key to that will be “Power to Gas” conversion of the regularly surplus power outputs that will be available at times from renewables into hydrogen gas for later use to generate power when renewable inputs are low. Some of this synthetic green gas could also be used, along with biogas, for direct heating and for heavy transport vehicles.  The UK has been a pioneer in this Power to Gas area. It is part of the shift to a new more efficient and flexible way of balancing variations in demand and supply.

As the head of the National Infrastructure Commission has said, all of that (and much else) needs revisiting and a new approach devised. Hopefully we can come up with one that will be more coherent and effective than those in the past.

The state of play

The current situation is that the FiT system has been abandoned and no further new allocations under the CfD will be allowed, after one last round of auctions, with, otherwise, all new spending on the various green levies having been frozen until after 2025. The expectation seems to be that renewables like on shore wind and PV, and soon offshore wind, should be increasingly able to stand on their own feet without subsidies.

That won’t be easy- given they they face other energy options which continue to get subsidies, like nuclear, outside of the competitive system. Subsidies for new technologies are useful: for renewables, project prices have fallen faster than they would have without the support systems. However, the successfully emerging technologies (wind and solar) still need access to the market that the CfD provides even is no subsidy is provided.  Moreover, what of the newer less developed options?  If the aim is to expand renewables overall, and to do so rapidly, then continued support for the new technologies, like wave and tidal power, would be wise, so as to reduce their costs.  Unless that is you believe we should just stick with the currently lowest cost options- and that wave and tidal have missed the boat. 

While short-termism has its appeal (go for the current cheapest), so does diversity, spreading risks across a wider range of options. New or improved technologies continue to emerge. They too may get cheap, as PV and wind have done.  It would be unwise to foreclose green energy options.

A new plan

At present there are no UK renewable energy targets, just indicative BEIS scenarios, which suggest the UK could get up to 50% of its electricity from renewables by around 2035. There are more optimistic views some looking to 100% of all energy by 2050, assuming proper attention is given to demand reduction and energy saving. Labour’s last manifesto was backed up by a plan to ‘ensure that 60% of the UK’s energy comes from low-carbon or renewable sources within twelve years of coming to power.’

This ‘60% by 2030’ low-carbon energy target excludes transport, but includes nuclear, a very contentious issue.  The costs are rising and public support is low- 38% in the 2018 BEIS survey compared to 85% for renewables.  A large nuclear programme would also make it very hard to balance the expanding renewables programme- nuclear plants cannot vary their output regularly and quickly to balance variable renewable input. They just get in the way of the new more flexible supply and demand system that is needed.

   

There was also talk in Labour’s plan of ‘support the development of tidal lagoons, starting with approval of the Swansea Tidal Lagoon’ which is debatable. The latter is very expensive. Tidal current turbines are far superior and faster to install. Small tidal barrages (e.g. on the Mersey) may have role to play, as they are able to help with balancing, but large barrages are expensive and can have major environmental impacts. Wind and Solar are better bets with clear potential for expansion, though tidal may be able to make a small contribution by 2030.

A detailed plan is now needed, facing up to all these and other choices, including on the demand side. One such plan has been outlined recently by Greenpeace. It assumes the Hinkley project goes ahead, but not the other proposed new nuclear plants. It calls for rapid expansion of wind and solar. It is a useful starting point for discussion.

Rachel Reeves, Chair of the Business, Energy and Industrial Strategy Select Committee says ‘...it’s vital the Government comes forward with a Plan B to plug the energy gap. This alternative plan must ensure security of supply and address the pressing need to decarbonise the UK’s power generation. Renewable energy offers significant opportunities for UK jobs, for business, and for industry and Government must take a fresh look at creating the right environment for attracting investment in future energy capacity, including renewables.’

That is a good summary of the challenge, and the opportunities that we need to grasp. Labours Bringing Energy Home report is not a bad start- but it’s only a start

The above was produced earlier this year by Dave Elliott as part of lobbying activities focused on the Labour Party. It has continued to push ahead with renewables well, but still seems all over the place on nuclear – it’s out, no it’s in.  The Green New Deal proposal, backed at Conference, though very positive on renewables, is a bit vague on nuclear.  Odd when most of the media has given up on it as a dead duck, Hinkley especially. But that’s the right wing press. New Statesman meanwhile ran a double page Nuclear Industry Association advertorial! The debate continues.