Political decisions ‘hampering competition’ in renewables

The UK has been warned against “putting all of its eggs in the offshore wind basket”.

The comments come on the back of a new report by the International Energy Agency (IEA), which predicts a 50 per cent rise in the world’s renewable-based power capacity over the next five years, equivalent to an extra 1,200GW. The report indicates that 60 per cent of this growth will come from distributed solar PV.

Heymi Bahar, the lead author of the report, told Utility Week that while the UK continued to be a global leader in offshore wind, there were areas it could consider to boost other forms of renewables. Outside of government subsidies, he said there was significant potential in the use of power purchase agreements for solar projects.

Meanwhile, Dr Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit (ECIU) said the report showed the UK needed to take a more diversified approach.

He said: “These figures show how the UK is almost unique in putting all of its eggs in the offshore wind basket. While the sector is undoubtedly delivering results, the cheapest and most secure power systems are based on a number of energy sources. Other European nations are expanding low-cost solar and onshore wind capacity rapidly, but political decisions are stopping these cheap technologies from competing in British auctions.

“The recent growth in biomass generation is also unique within Europe, with an additional 1.3 GW expected by 2024. Considering huge uncertainty surrounding the sustainability of, and emissions associated with, biomass use, and the Committee on Climate Change’s recommendations that the UK should move away from the large-scale use of wood for electricity generation, questions could be asked if this is the right direction for the UK to take.”

The IEA’s report highlights the three main challenges that need to be overcome to speed up the deployment of renewables: policy and regulatory uncertainty, high investment risks and system integration of wind and solar PV.

On the UK specifically it predicts an expansion of 30 per cent in renewable capacity by 2024, with offshore wind accounting for 70 per cent of that growth.

Speaking to Utility Week, Bahar said: “The UK is quite unique in approach to offshore wind. It used to have a broader portfolio of renewables but for the past few years has really focussed on offshore wind. The recent Contracts for Difference (CfD) auction results have shown how effective that policy has been.

“The question now is what next. I’m not sure I can see onshore wind receiving the same level of support. There is not the huge resource for solar that you see in other countries.

“Even if government does not put money on CfD auction for onshore wind and solar, we see more and more opportunities for corporate PPAs. In Europe we see big demand for this – because it gives safe revenues to developers – and a slower but still steady development in the UK.”