A new study by RSK, an engineering consultant, has found that energy executives believe the UK will fail to meet the Government’s recently announced 2030 generation targets for offshore wind and green hydrogen. According to Edie.net, who have had early access to the research, three-quarters of the senior executives surveyed (all of whom work in renewables in England, Wales and/or Scotland) doubt that the new targets will be met. The consensus was that this would be caused by barriers concerning additional capacity deployment, an area that policymakers have been slow to rectify in the past.
Highlighted in the report are delays in the planning process where the Government itself admitted just last month that the time for consent to be given to large infrastructure projects was, on average, 65% longer in 2021 than in 2012. “With the consent process often taking years, there is considerable concern that this will hinder the UK’s progress toward meeting its targets,” RSK’s renewable energy Business Development Director Mike Kelly, told Edie.net. He added: “The Government needs to introduce a reset to strengthen and streamline the process in tandem with that for grid connection to enable quicker decision-making. Viable projects could then move from consent to build and finally to grid connection at the pace and scale required. Without urgent reform, implementation will not be able to keep up with demand.”[i]
Other issues identified in the research are so-called ‘grid blocking’ – the practice of schemes not being viable or committed to securing a grid connection, thus effectively blocking connection opportunities for other schemes. As well as a need to increase energy storage and other forms of energy flexibility. Worryingly, all of the executives interviewed by RSK deemed grid capacity “a significant challenge”[ii].
Away from the findings by RSK, there are already fears that the expansion of the renewables sector in the UK could stall as the Energy Prices Bill makes its way through Parliament. Following consultations on energy market reforms undertaken over the summer, concerns have been raised that a cost cap could harm investment into the renewables sector. The study was proposed in light of the soaring energy costs, driven by global gas prices dictating the overall wholesale cost of electricity in the UK. The consultation centred around finding the best means of decoupling gas prices from the wider energy mix.
Whilst the new Bill contains powers necessary to decouple wholesale electricity prices from gas prices, it also contains a new ‘Cost-Plus Revenue Limit’ that will be imposed on low-carbon electricity generators. As wholesale electricity prices have been tied to gas prices, the government argues that low-carbon generators have also been collecting excessive profits this year, regardless of the fact they are not using gas[iii].
On the matter, Jacob Rees-Mogg, Secretary of State for Business, Energy and Industrial Strategy, said:
“We have been working with low-carbon generators to find a solution that will ensure consumers are not paying significantly more for electricity generated from renewables and nuclear. That is why we have stepped in today with exceptional powers that will not only ensure vital support reaches households and businesses this winter but will transform the UK into a nation that offers secure, affordable and fairly-priced home-grown energy for all.”[iv]
However, those in the UK’s renewables sector have voiced concerns, with Dan McGrail, CEO of RenewableUK, saying: “We are concerned that a price cap will send the wrong signal to investors in renewable energy in the UK.”[v] He added: “A price cap acting as a 100% windfall tax on renewables’ revenue above a certain level, while excess oil and gas profits are taxed at 25%, risks skewing investment towards the fossil fuels that have caused this energy crisis.”[vi]
A further challenge lies in solving the skills gap, where RSKs research argues that the UK Government is failing to act in closing this. According to Edie, the Government has set a target of hosting two million green jobs by 2030 but has only laid out plans to deliver less than one million[vii]. In addition, it has not provided a formal definition of the term ‘green job’, set no sector-specific job creation goals and failed to provide an updated and detailed skills plan since before the 2050 net-zero target was set[viii].
RSK identifies opportunities for creating new vocational skills courses that would enable those who do not want to attend university to enter the sector; it also notes that, at present, there is a lack of opportunities for skilled workers to transition into the renewables sector mid-career. However, for this to happen, investment will be required, and if the price cap sees investment into renewables stall, as is being argued by RSK, then the skills gap will remain a barrier for growth in the sector.
[i] Report: Most energy execs don’t believe UK will meet 2030 renewables capacity targets - edie
[ii] Ibid
[iii] Renewables sector concerned that revenue cap ‘sends wrong message’ to investors - edie
[iv] Northern Ireland renewable energy generators could face revenue caps - BBC News
[v] Energy bosses ‘worried’ as ministers move to cap renewable and nuclear profits | Evening Standard
[vi] Ibid
[vii] Report: Most energy execs don’t believe UK will meet 2030 renewables capacity targets - edie
[viii] Ibid
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
