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The Guardian - UK
The Guardian - UK
Environment
Alex Lawson

‘Everything has changed, nothing has changed’: what’s stopping green energy

Decarbonisation is not the only consideration driving the push for green energy.
Decarbonisation is not the only consideration driving the push for green energy. Photograph: Hannibal Hanschke/EPA

On a breezy day in May, the Met Office issued a pithy forecast which would prove telling: “Quite windy.” In fact, on 25 May the UK set a record for wind power generation, 19.9 gigawatts – enough to cover more than half of Britain’s electricity needs, or boil 3.5m kettles. So plentiful was the wind power that National Grid was forced to ask some turbines in the west of Scotland to shut down, as the network was unable to store such a large amount of electricity.

The episode represents a landmark which underlines both the progress of Britain’s renewables industry and the potholes in the road to replacing fossil fuels. Just six months earlier, global leaders met in Glasgow with renewable energy high on the agenda.

In the year since Cop26, the case for a rapid transition to green energy sources has been strengthened beyond simply decarbonisation, as countries have scrambled to replace Russian gas, bills have risen and the concept of “energy security” has shot up the public agenda. However, stopgap measures such as keeping coal-fired power stations active to get through the winter threaten to undermine and slow the energy transition.

As Cop27 nears, progress since last year’s iteration has been bumpy.

“Everything has changed, and nothing has changed,” says Keith Anderson, the chief executive of ScottishPower, speaking at the supplier and developer’s London offices. “We have a cost of living crisis, energy is being weaponised and the discourse is now around energy independence. And how do you solve energy independence? You invest in renewables, which can be controlled, and built at speed.” He adds: “Going harder and faster on renewables will deliver security, bring down prices and tackle climate change.”

Casimir Lorenz of the consultancy Aurora Energy Research says: “Most people are aware now that if we had invested much more and much quicker into renewables we would not have been as exposed to Russian gas.”

He adds: “Renewable developers have faced renewed pressure to finish projects and get them online while the prices in the market are very very high.”

However, this task has not been straightforward. Rampant global inflation and freight headaches post-pandemic have stretch supply chains. For solar developers, a boom in demand over the last year has also left firms requiring sharp elbows – and companies are attempting to diversify away from some Chinese suppliers amid allegations they have used forced labour.

In the UK, the renewables industry has been dragged into the political drama in Westminster. The former prime minister Liz Truss set her sights on blocking solar farms being built on agricultural land, while indicating that restrictions on onshore windfarms would be lifted. The fate of both initiatives remains uncertain under her successor, Rishi Sunak.

Lorenz says a similar picture has been seen around Europe: “The development of renewables has been held up by economic factors but also regulatory and public resistance to renewables. That has escalated with political resistance, where we’ve seen populist countries come out against onshore wind to get people on side.” European wind turbine orders were down 36% in the three months up to October on the same period a year earlier.

Some renewables companies have also been in governments’ crosshairs after landing excess revenues from the surge in the wholesale price of electricity, which is tied to soaring natural gas prices.

“Regulators need to provide a stable investment platform,” says Richard Crawford of InfraRed Capital Partners, the investment manager for London’s Renewables Infrastructure Group, which has projects across Europe, from the UK to Sweden and Spain. “They need to manage the cost of electricity but also create a suitable environment for investors. We have had many periods in the past when prices have been beneath expectations and there’s no investment return.”

Crawford adds that revenue caps can act as a “negative investment signal” – making the cost of borrowing funds higher. As the industry is dominated by multinationals with projects in different countries, this can convince some companies to simply invest in an alternative market.

The economics should be appealing to policymakers. At a UK auction earlier this year offshore windfarm operators agreed to sell their power at record low price levels, as little as £37.35 per megawatt hour, 5.8% below the lowest bid in the previous auction in 2019.

Anderson argues that an age-old issue is holding back Britain’s renewables industry: planning. “If I can build a major, complex infrastructure project in 12 to 18 months then surely to goodness we can have a planning system that can deliver at the same timescale,” he says, shaking his head. To illustrate his point, he recounts how a planning official questioned the location of the East Anglia One North offshore wind project 12 years after the licence was awarded by the former prime minister Gordon Brown in 2009.

National Grid announced this summer it was making a £54bn upgrade to the electricity network, the biggest since the 1960s, to help connect offshore windfarms more easily and enable battery storage facilities to connect up to store renewable power, a crucial issue in the industry.

Gaining local consent is another factor putting the brakes on Britain’s race for renewables. In April, Octopus Energy launched an attempt to prove the nation’s desire for onshore wind, with a project named Plots for Kilowatts which matched up landowners with residents willing to agree to a windfarm in return for lower prices. Lorenz, who is based in Berlin, says that in Europe the public have been perturbed by “the fact that local people are not profiting from the fall in costs for renewables – and they can even pay more for higher grid fees in some cases”.

In terms of ambition, the UK is toe-to-toe with its European counterparts.

The UK has a target of gleaning 100% of its power from renewables by 2035. The government increased its target for offshore wind capacity from 40GW to 50GW by 2030, while it hopes to triple solar capacity by 2030. Plans are also afoot for floating windfarms off the Cornish and Welsh coasts. Germany, exposed by its reliance on Russian gas, has upped its clean energy target from 65% to 80% by 2030, but EU an improved EU-wide energy goal is still just 45% by 2030.

In France, attitudes to offshore wind have softened while its nuclear fleet has hit difficulties this year at an unfortunate juncture.

In the second quarter of 2022, renewables accounted for 38.6% of electricity generation in the UK, up slightly on a year earlier but lower than the 41.9% registered for fossil fuels. EU figures show Sweden has the greatest share of renewables, at 60%, ahead of Finland, Latvia and Austria.

Meanwhile industry technology continues to evolve: in Kent a strawberry farm supplying Wimbledon is using vertical transparent solar panels to power its greenhouse while a vineyard in central Spain is now able to adjust solar panels to provide the right levels of shade to enhance the quality of the grapes. Crawford says windfarms are being gradually updated to retrofit blades to improve the “wake effect” for turbines downwind of the first turbine and increase their productivity.

As the industry heads to Sharm el-Sheikh, Anderson says competition between nations for renewable investment is fierce. “The UK has been doing better than anybody else up to now. But we’re almost back at the start-line again after the pandemic and the current energy crisis. America is a very clear, structured environment for investment. Europe is getting its act together very, very quickly. So we need to ask: are we ready to go for it?”

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