Solar energy has eclipsed onshore wind energy in England, while Scotland devoured the lion’s share of new renewables investment across the UK in 2015, according to the latest annual Energy Entrepreneurs report.
The report, published by London-based Smartest Energy, shows that independent generators invested over £376 million in more than 1,000 commercial-scale renewable projects in 2015, adding 2.4GW of new capacity.
Consequently, these energy entrepreneurs now supply 7.6% of UK power demand with clean electricity. Last year 5,467 projects developed outside the traditional electricity supply sector generated more than £1 billion of electricity – enough to power more than 6.2 million households.
Since Smartest Energy began tracking independent energy generation across the UK four years ago in their first Energy Entrepreneurs Report, almost £2.5 billion has been invested in commercial-scale projects above 50kW.
Independent capacity has more than doubled from 4.7GW to nearly 11GW – nearly 40% of renewable capacity in the UK.
However, independent solar capacity grew by 83% over the year with a rush to complete 696 new projects providing over 2GW of capacity before ROC (Renewables Obligation Certificate) subsidies ended in March 2015.
As a result, solar is now the dominant technology in England and the second biggest in Wales.
And Scottish solar power is set for a fresh sun-rise in Scotland after today’s Holyrood general election, with a mooted new government Scottish energy strategy likely to set quota installation targets on public sector buildings for this kind of generation (even if the SNP are, however unlikely, in Opposition – they’ll still be the largest single party)
Meanwhile, growth in onshore wind slowed with only 233 new projects across the UK, adding 263.2MW, a 7% increase in capacity.
This was ahead of planned subsidy cuts in 2016, and may have been due to factors such as increased difficulty in securing planning consent or grid access in different parts of the country. The slow growth is in contrast to the 690MW added in 2014.
Nevertheless, the technology took the lion’s share of investment in Scotland and was also top in Wales.
Scotland’s Highlands & Islands region is the most active area, supplying 5.2% of all independent renewable generation in the UK, followed by Yorkshire (4.6%). Cornwall, Devon and Somerset between them supply a further 10%.
The UK government has now axed most of the subsidies that were originally designed to support the renewables industry and uncertainty over future energy policy is hitting investor confidence.
Strong investment is likely to continue as long as there are projects in the pipeline with guaranteed support. However, spending on renewables is set to peak in 2017 and then nearly halve to £238 million in 2020 according to analysis of the government’s national infrastructure pipeline.
But a spokesman for Smartest Energy said: “This is a crisis for independent generators.
“The pressure is on to innovate and find entrepreneurial ways to extract more value from renewable energy projects to maintain returns and make future projects viable. The biggest prize potentially lies in energy storage.
“The first independent generators are already installing commercial scale solutions, allowing them to store intermittent solar and wind energy to sell when it is most profitable.
“Storage also provides opportunities to earn money by providing demand-response systems and a range of other grid services. Battery costs are forecast to fall 20%-30% a year making storage an increasingly attractive solution to independent generators.
“Independent generators will also be looking at how to make existing capacity work harder. One option is to add complimentary technology to existing sites – for example, co-location, which is building a solar project next to a wind farm to maximise the return on their grid connection.
“Another is to change their power purchase agreements to more actively manage when they sell their power to the market and what price they are able to achieve. Ironically, this crisis in investment is happening at a time when demand for renewable electricity is growing.
“Government and independent generators must work together if we are to create a clean, cost-effective energy system which meets future UK energy needs.
“Government can boost investor confidence by providing clarity on future renewable energy policy, especially the support that will be available under the Levy Control Framework beyond 2020.
“It can ensure best value for consumers by reforming the Capacity Market, to ensure that renewables, energy storage and Demand Side Response are able to compete on a level playing field.
“It can also maximise the potential of energy storage to create an efficient, cost-effective and smart electricity system, by developing frameworks that encourage its rollout and its ability to accommodate higher levels of renewables on the grid.”