126 United Kingdom
In December 2020 , BEIS published a white paper titled “ Powering our Net Zero Future ” ( Energy White Paper ) setting out how it intends to meet these targets and building on the government ’ s “ Ten Point Plan for a Green Industrial Revolution ” ( Ten Point Plan ) published in November 2020 . Key features of the Energy White Paper and the Ten Point Plan include :
■ targeting 40GW of installed offshore wind capacity by 2030 through £ 20 billion of private investment ;
■ investing £ 1 billion in the UK ’ s energy innovation programme to develop future renewable technologies such as green hydrogen , with the aim of 5GW of low-carbon production capacity by 2030 ;
■ developing a biomass strategy , particularly in relation to biomass with carbon capture and storage ;
■ aiming to bring at least one large-scale nuclear project to the point of final investment decision by the end of the current Parliament ;
■ increasing the proportion of sustainable biomethane in the gas grid ; and
■ increasing the funding available to study the use of hydrogen in homes and consulting on the role of “ hydrogen-ready ” appliances .
22 Renewable Energy Market
2.1 Describe the market for renewable energy in your jurisdiction . What are the main types of renewable energy deployed and what are the trends in terms of technology preference and size of facility ?
The UK is particularly well placed to take advantage of wind power , with some of the best conditions in Europe and high average wind speeds . As a result , onshore and offshore wind farms together are the largest source of renewable energy in the UK , with 11.8 % of aggregate UK generation ( including from fossil fuels ) coming from offshore wind projects and 13.4 % from onshore wind projects in Q1 2021 . Examples include Orsted ’ s Hornsea One , located 120km off the Yorkshire coast in England , which is currently the world ’ s largest offshore wind farm with a capacity of 1.2GW , and the Dogger Bank project which , when completed , will be the world ’ s largest offshore wind farm with a capacity of 3.6GW .
Bioenergy ( biomass or waste-fuelled plant ) projects are the UK ’ s second-largest contributors to renewable energy generation after wind , providing 12.3 % of UK electricity generation in Q1 2021 . These include the Drax Power Station in Yorkshire , formerly the UK ’ s largest coal-fired power station , where four of the six boilers have been converted to biomass , with a combined capacity of 2.6GW . The two remaining coal units ceased commercial operations in March 2021 and the plant is piloting a carbon capture and storage scheme in order to create negativeemissions power generation .
Hydropower and solar photovoltaic ( PV ) projects contribute a smaller ( but still significant ) percentage of UK renewable energy and tend to be smaller in scale ( the majority being less than 10MW ).
2.2 What role does the energy transition have in the level of commitment to , and investment in , renewables ? What are the main drivers for change ?
In 2019 , following Parliament ’ s declaration of a “ climate emergency ” and recommendations from the independent Committee on Climate Change , the government legislated for net zero greenhouse gas emissions by 2050 , as discussed in question 1.1 .
One of the principal ways in which the UK proposes to meet the 2050 net zero target is by increasing the use of renewable energy . The Energy White Paper , discussed in detail in question 1.3 , sets out how the UK will invest in renewable energy in order to support the energy transition .
2.3 What role , if any , has civil society played in the promotion of renewable energy ?
Civil society has been key to the promotion of renewable energy in the UK , with the environment consistently polling as one of the top three issues for the British public . This can be seen by the strong environmental , social and governance ( ESG ) movement in the UK , with investors putting almost £ 1 billion a month on average into investment funds that apply ESG criteria in 2020 . The rise of responsible investing , together with a strong activist shareholder culture in the UK , benefits renewable energy in the UK .
In addition , at a community level , there has been a noticeable growth of on-site distributed renewable generation projects in recent years ( both residential and commercial ), which is underpinned by general environmental concerns and technological innovation , as well as by government policy .
2.4 What is the legal and regulatory framework for the generation , transmission and distribution of renewable energy ?
The Energy Act 2013 ( Energy Act ) is the principal legislation relating to renewables , establishing a legal framework with a key aim to secure affordable and low-carbon electricity . The central provisions of the Energy Act relating to renewable energy include the introduction of :
■ provisions to enable the Secretary of State to set a decarbonisation target range in secondary legislation ( as discussed in question 1.1 );
■ a statutory framework for Contracts for Difference ( CfD ) ( see question 3.2 for more detail );
■ the Capacity Market , being a market to ensure the security of electricity supply based on the government ’ s forecast of electricity demand ;
■ renewables obligations certificates ( see question 3.7 for more detail ); and
■ access to markets via long-term contracts for independent renewable generators ( including power purchase agreements ( PPAs )), and through liquidity measures to enable the government to improve the liquidity of the electricity market .
The Electricity Act is the principal legislation governing electricity generation generally , including from renewable sources . Subject to applicable exemptions , an electricity generator requires a generation licence from Ofgem to operate . See question 4.1 for more detail .
2.5 What are the main challenges that limit investment in , and development of , renewable energy projects ?
The challenges include :
■ Uncertainty as to the long-term laws , policies and the associated incentives relating to the renewable sector that may be adapted by successive governments is a challenge to any investment modelling . For example , onshore wind projects benefitted from certain government subsidies which were then removed in 2016 , and then , in early 2020 , onshore wind subsidies were revived .
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Renewable Energy 2022