UK renewable energy will overtake fossil fuels NEXT YEAR
Renewable electricity is on track to overtake fossil fuels to become the dominant source of electricity generation in Britain by 2020 according to a new report from British power analysts EnAppSys.
EnAppSys published its annual market review and forecast earlier this month in which it outlined power figures from Great Britain’s electricity sector for 2018 (where Great Britain differs from the United Kingdom in excluding Ireland). Coal and gas-fired power stations produced a total of 130.9 terawatt-hours (TWh) while renewable energy sources generated 95.9 TWh in 2018.
The renewable energy sector in Britain also saw levels of generation increase by 12.7 TWh (15.2%) in 2018, subsequently impacting levels of conventional power generation fell by 6.7% from 140.3 TWh in 2017.
The headline finding from EnAppSys’ 2018 Market Review, however, was the future of the battle between fossil fuel generation and renewable energy sources. Specifically, with any further additions to the renewable energy sector set to reduce levels of fossil fuel generation, EnAppSys predicts that renewable energy generation will reach 121.3 TWh by 2020, while fossil fuel generation will fall to 105.6 TWh by the same time.
This will be the first time that renewable energy has beaten out any other aggregated power source and will serve as a dramatic example of renewable energy’s staying power.
“It’s clear that renewables will be generating most of our power in the years ahead, with wind playing the leading role,” said Luke Clark, RenewableUK’s Head of External Affairs, speaking to me via email.
“Renewables generated one-third of the UK’s electricity last year, and half of that came from wind alone. Looking back, 2017 was the first year when low carbon sources (renewables plus nuclear) generated more of the UK’s electricity than fossil fuels, providing 50.1% of our power. This year, work is commencing on offshore wind projects which, when completed, will add 6.1GW to our current offshore wind capacity of 7.9GW – so an increase of 77% by the early 2020s. And by 2030, we have the potential to reach 30GW of offshore wind, which will generate one-third of the UK’s electricity needs. Our energy mix is changing fast, and getting significantly cleaner every year.
“It’s also important to be aware that energy storage is developing fast in the UK, with nearly 400 projects operational (3.3GW) or in the pipeline (a further 5.4GW). Alongside this, we’re seeing more energy efficiency in our homes, offices and factories. Crucially, we’re also seeing flexibility being introduced into the system with new opportunities on offer, for example, to British businesses to get paid for being adaptable in how much electricity they use and when they consume it, to reduce their energy bills. The advent of this modern, flexible energy system means that traditional concepts such as baseload generation are starting to look old-fashioned.”
The increase in renewable energy generation in 2018 was due in large part to increasing levels of wind energy, as a large number of offshore wind farms were commissioned or entered full operation during the year. The cost of offshore wind is also continuing to fall and will drive further development and adoption. Thus, wind energy will become the primary source of renewable energy generation, accounting for 55%.
“Last year, levels of wind generation displaced conventional power stations and whilst this leaves room for baseload generation it does squeeze levels of output from other generators in the market,” said Paul Verrill, director of EnAppSys. “In the short term at least, wind will continue to be the primary source of renewable generation having produced a record high share of the renewables mix (55.4%) in 2018. With the moratorium on onshore wind and reductions in capital cost of offshore wind farms, it is likely that more of these offshore projects will come on stream in future years, which will drive even higher levels of renewable output.
“New electrical transmissions infrastructure that came online in 2018 will increase further the contribution of renewable energy to the UK fuel mix but constraints still persist despite the investments.”
EnAppSys raised concerns, however, with the suspension of the country’s Capacity Mechanism after it was rendered illegal by the European Union in November. According to the UK government, the Capacity Mechanism “ensures security of electricity supply by providing a payment for reliable sources of capacity” which, considering it is providing payments primarily to old coal, gas, and nuclear plants, smells suspiciously like government fossil fuel subsidies. EnAppSys is concerned that, without the Capacity Mechanism in place during 2019 “ensuring plants are incentivised to remain in the market” they may simply up and leave.
“With conventional power stations still required to meet peak demand requirements, the suspension of the Capacity Mechanism payments that paid them to be available is a concern in terms of ensuring plants are incentivised to remain in the market,” Paul Verrill continued.
“Against this backdrop, the margins for thermal power generation fell to 2014 price levels as the impact of reduced demand, increased levels of wind generation and very competitive market dynamics placed downward pressure on profits. This occurred despite overall market prices being 30% higher than in 2017, driven by higher gas prices and a recovery in the EU ETS carbon market.
“This dynamic should settle down over time, but with rising competition in the market driven by the growth of renewables it will become necessary to reinstate the Capacity Mechanism payments or some other alternative to fill the gap created by the lost income. If this is not the case, it’s likely that plant closures will be necessary to remove oversupply from the system and this will lead to decreased security of supply.”
I reached out to EnAppSys to ask them whether the Capacity Mechanism was really just government subsidizing fossil fuels in disguise, but they failed to offer any comment.
(Originally appeared at our sister-site, Cleantechnica.)