Clean energy features in new Government plans

24th March 2017 | Commercial Energy

The future UK electricity mix will have more renewables, batteries and interconnectors than expected. This is according to long-awaited government projections. The shift in Department for Business, Energy and Industrial Strategy (BEIS) modelling, parallels similar changes made by National Grid. Despite these clean energy shifts, the UK remains off track for its carbon budgets to 2030.

The UK Government last published its energy and emissions projections out to 2035 in late 2015. Its latest analysis incorporates new assumptions about the price of fossil fuels, CO2 emissions and electricity generating technologies.

Clean Energy

One big change is that renewables are much cheaper than expected. A November BEIS report cut the cost of wind and solar power by 15-30% both now and in the future. The latest cost estimates suggest onshore wind and solar will be as cheap or cheaper than gas in 2020, gaining a clear cost advantage by 2025.

BEIS projections now include battery storage for the first time. There is also a bit increase in expected new interconnector capacity, which links the UK’s electricity grid to the rest of Europe. These are seen as a vital component of the flexible grid the UK will need, as it expands the supply of variable renewables in the mix. They also reduce energy bills and wholesale electricity prices are lower in continental Europe than in the UK. Plans for new interconnectors include a link to France and a link to Norway, among others.

Another clear shift in the projections is a marked reduction in new gas capacity. It appears that the Government is walking back from the idea that the UK needs many large new combined cycle gas turbines. Instead it has welcomed small new plants that will be built at Kings Lynn and Spalding, as well as innovative low-carbon capacity like battery storage.

These are part of the shift in the UK Government energy outlook, which now look to embrace clean energy more and more.

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