SmartestEnergy UK’s State of the Market Report 2021

01 December 2021 – Sydney, Australia

SmartestEnergy Limited in the UK publishes a report annually to benchmark the state of the market. It aims to provide a view of ‘Energy Entrepreneurs’ (independent renewable generators) and the important role they play in the transition to net zero. With the report published just after COP26, it provided the perfect opportunity to explore whether the UK is on track to meet 2030 and 2050 net-zero targets.

In addition to highlighting the crucial role the renewable generation sector can play in helping the UK to achieve its ambitious net-zero goals, it stresses the need to accelerate the pace of development after the latest figures reported a slowdown in new generation capacity coming on stream. The amount of additional independent renewables brought online from January to September 2021 was only 86MW, compared to the 164MW seen in 2020.

With support mechanisms for smaller scale renewables tailing off, the report shows how project developers are also increasingly looking to new approaches to build business cases for UK projects including co-location with battery storage, tapping into multiple markets to maximise income streams, and taking a more flexible approach to selling power to capitalise on market price movements.

A growing focus on the role of UK businesses in tackling climate change – further fuelled by COP26 – is also expected to see a surge in interest in innovative contract structures such as Corporate PPAs, which will support investment in independent generation

Angus Widdowson, Head of Smart Generation Sales at SmartestEnergy in the UK said:

"While much of the focus around the UK Government’s Net Zero Strategy was on technologies such as offshore wind and nuclear power, significant growth in smaller-scale solar, wind, hydro and biomass projects will also be needed alongside storage and flexible demand response to put the nation on track to hit its targets. COP26 has ramped up the focus on climate change and the need for dramatic growth in renewable capacity. The spikes seen in wholesale energy prices and the rising costs of balancing the system have also underlined the challenges of ensuring security of supply, affordability and sustainability.

“Independent generators have played a key role in the huge shift which has taken place in the UK which has seen coal all but disappear from the energy mix. Although growth in new capacity has slowed as subsidies fade away, new independent generation will still be vital to help ensure we are on the path to net-zero. These energy entrepreneurs are also investing heavily in the storage and flexibility needed to enable the shift to a smarter energy system. Although there are significant opportunities, challenges and barriers remain with planning delays and policy gaps among the key issues cited by industry leaders. It is important that government and regulators work closely with the sector to ensure it makes the most of its potential to help enable a net-zero world.”

Download the 5-minute overview here for a quick digest of the key highlights

Download the full report