Posted on: 14/07/2016
With the release of National Grid’s Future Energy Scenarios last week came the news that the UK is unlikely to reach its 2020 renewable energy targets. Robert Groves explains that despite this, there are still positives that our sector can take from the report.
National Grid’s annual review of possible future scenarios for the UK energy market is always interesting. It helpfully maps out four possible pathways that the country may take, dependent on ‘policy, green ambition and prosperity’.
This year’s report has highlighted that we are not on track to meet our target of 15% renewable energy by 2020. The most optimistic scenario, ‘Gone Green’, sees the target being hit in 2022, while the least optimistic ‘No Progression’ scenario suggests 2029.
However, this target covers both renewable heat and transport as well as electricity generation. While heat and transport have a lot of work to do (60TWh and 25TWh increases required respectively), electricity from renewable generation sources is on track to meet its ‘unofficial sub-target’ of 34% by 2020.
This is great news and we should all be proud of the achievements of our sector date. But the obvious next question is - can this growth be sustained? With new generation investment stunted, thanks to subsidy cuts and now Brexit uncertainty, it’s not possible to expect continued growth from new projects.
Therefore, optimising existing projects must become the next focus of energy entrepreneurs. Battery storage is clearly the technology of choice to achieve this, with the report predicting 18GW of storage capacity by 2040 with the majority coming from batteries.
While storage growth is predicated across all four scenarios, the 18GW capacity occurs in the ‘Consumer Power’ future which is driven by innovation and investment from the market. Battery storage presents a great opportunity for large industrial and commercial businesses to take control of their supply and reduce their costs, but there are currently barriers preventing most from getting involved - something National Grid says needs to be resolved quickly in order for this battery-powered future to become a reality.
Our own industry survey has also identified these challenges around battery storage and we are producing a report that goes into this in more detail - pre-register for your copy here.
The Future Energy Scenarios report also highlights the Demand Side Response (DSR) opportunity for large energy users.
Through its Power Responsive programme (read our blog here), National Grid is engaging large energy users on the benefits and schemes available to help them maximise their flexibility. The Future Energy Scenarios report forecasts that 5.7GW of DSR capacity could be achieved as soon as 2026, which is definitely possible given the current engagement we are seeing from businesses.
We see our role in continuing to support this innovation by providing dynamic routes to market for generation projects and batteries, and innovating our supply contracts to support consumers with taking a more active role.
While there are bound to be challenges ahead, the new energy landscape we are moving towards is exciting and presents great opportunities for proactive consumers and generators.