Renewables investment in growth mode, says energy entrepreneurs report

More than £227 million was invested in 400 independent renewable energy projects last year, showing the sector is still in growth mode, says this year’s Energy Entrepreneurs report.

The findings from Smartest Energy show that despite this representing a 20 per cent drop on 2016’s figures – which was put down to various cost and subsidy factors – the overall £2.98 billion figure shows investment is up by 8.3 per cent.

Launched this week at the All-Energy conference in Glasgow, the report pointed to the “significant contribution” that the independent sector has made in meeting the UK’s energy requirements.

It said the scale of change taking place across Great Britain’s
energy system was highlighted by the fact that 2017 saw the
first full day without coal power since the 1880s when the use
of fossil fuel began.

Key report highlights include:

• 6,809 projects are now operating (an increase of 6.2 per cent)
• Total renewable generation has reached 13.8GW capacity  (up by 8.2 per cent)
• 311TWh of electricity has been generated at a wholesale value of £1.38 billion (an increase of 8.3 per cent)
• Independent renewable generation in 2017 is creating enough to power 8.3 million households (a rise of 8.3 per cent)
• Regional divergence continues, with England accounting for more than two-thirds of independent generation projects. However Scotland and Wales are continuing to close the gap.
• Solar continues to dominate. Huge investments made in solar PV in recent years means the South West and South East of England now account for 29.4 per cent of all GB independent generation capacity.
• With suitable sites being harder to find in the solar PV hotspots in the south of England, developers have been more active elsewhere.

The impact of subsidy cuts, reflecting a maturing market, and cuts in embedded benefits have inevitably hit investment appetite, the report adds. The closure of the Renewables Obligation (RO) scheme to new projects during the year, and reductions in Feed-In Tariffs (FT) over recent years have seen many planned projects shelved as they have become no longer financially viable.

However energy entrepreneurism is alive and well, adds the report. “Energy entrepreneurs are already tackling the new environment by exploring alternative ways to make the financial case for their investments stack up in a subsidy-free world.”

Iain Robertson, vice president of renewables at Smartest Energy, said: “The reduction in subsidies has inevitably slowed growth in the independent generation sector but these latest figures underline the significant role energy entrepreneurs continue to play as the UK shifts to a decentralised, decarbonised and digitised energy system.”

He said that renewable energy projects capable of operating subsidy-free will be the “exception rather than the norm” for some time. However the report adds that this is being seen as the long term direction of travel for the sector.

Over the past five years independent renewable generators have doubled their contribution to Britain’s energy mix at 9.2 per cent, supporting the new UK record for the longest period without coal generation for more than 130 years.

But as renewable subsidies fall away, and grid parity draws nearer, the issue of energy storage is increasingly rearing its head.

Richard Molloy, business development manager at energy storage solutions experts, Eaton, said when there is more renewable energy on the system than there is in demand it gives the UK “an opportunity” to store any excess.

While there is the potential to shift it to use it when there is less resource available, he said that puts a lot of pressure on the baseload generators who will find it increasingly difficult to operate when they have to provide a continuous output.

He added: “When we looked at the longer-term impact we see significant periods where there was lots of renewable energy available, but also periods when there wasn’t enough. It’s really about the balance of the system.”

Co-location for renewables generation storage could share the load he added, by placing multiple generators on a single site.