One of Theresa May’s last acts as the UK’s prime minister was to commit to a net-zero emissions target by 2050. One measure that most observers accept is both fundamental and achievable in the relatively short term, is the decarbonisation of the UK electricity grid. While government policy remains poorly aligned with this goal, this has not brought renewable energy developments to a complete halt.
March 2019 saw the closure of the Feed-in-Tariff (FiT) for new applications, ending the last remaining subsidy in the UK for renewable energy developments. The tariff subsidised small-scale renewable energy generators producing up to five megawatts (MW) electricity per year. The Renewables Obligation (RO) – a similar scheme for larger-scale producers of renewable energy – had already closed to new generating capacity two years previously.
Last year, Eunomia examined the enormous impact the withdrawal of subsidy has had on renewable energy deployments. Since then, the government has announced it will be raising VAT on domestic solar panel installations from 5% to 20% from October 2019, leading to warnings that this would make such installations “entirely uneconomic”.
It’s not surprising, then, that renewable energy developers are experiencing difficult times. While making updates to the Renewable Energy Planning Database (REPD), which Eunomia manages on behalf of the Department for Business, Energy and Industrial Strategy (BEIS), I pick up a good deal of feedback from developers. While some have been proceeding with their post-consent projects, many are increasingly frustrated by the lack of government support. On top of financial struggles, many developers speak of the difficulty and expense of obtaining a grid connection.
Several developers have stated that they will now be unable to reach financial close on projects before the planning consent on the development expires. This feedback is most commonly heard from smaller-scale developers, but not exclusively. One major developer informed me earlier this year that they have elected to abandon over £1m of solar investments that had become unprofitable, which they said was due to the lack of subsidy and the cost of business rates on developments.
With projects so difficult to bring to fruition, it would be reasonable to expect planning applications for new renewable energy projects to be at an all-time low. However, this is not quite the case. The chart below, which uses data from the REPD, shows that an enormous slump in new applications occurred when the closure of the RO was announced in 2015. However, in 2018 the total capacity of applications submitted rose sharply to return almost to 2015 levels, as developers switched their focus to larger developments – though the figures are also affected by data on electricity storage projects starting to be recorded in the REPD in the final quarter of 2018.
An ill wind
The maps below show the almost 4,000 MW of renewable energy capacity that has been applied for in 2019. In addition, applications for projects for storage, which helps enhance the value of renewable energy generation, totalled 848 MW in capacity.
The majority of this (3,759 MW) comes from applications for large onshore and offshore wind developments, most of them in Scotland. Applications in England, Wales and Northern Ireland combined for just 216 MW generating capacity, plus 448 MW of battery storage capacity. A full breakdown of the applications is shown below.
|Technology||Number of Applications||Total Capacity (MW)||Average Capacity per Project (MW)|
|Other Renewable Technologies||15||70||5|
The absence of applications for onshore wind projects in England in 2019 is not an anomaly: since the start of 2016, only seven applications of this type have been made (compared to 81 applications in 2014-15). The Conservative party stood on a manifesto pledge in 2015 to give local people the final say in onshore wind developments, and after winning the election, introduced new guidance to give effect to that pledge. Involving local people in the decision-making process is clearly not something to be denigrated – clean energy shouldn’t trample on local wishes – but the costs and risks of the consultations now required has clearly been a major deterrent to developers.
Every little helps
There is a considerable contrast between the first two quarters of 2019 in terms of the type of applications submitted. The larger number of smaller capacity applications in Q4 2018 and Q1 2019 reflects developers seeking to bring secure consent for small projects before the FiT closed. Most were applications for rooftop solar projects, which are quick to build once consent has been granted.
Tesco Stores, for example, submitted applications for prior approval of private wire rooftop solar installations on 11 of their English stores, some of which may have been developed in time to secure FiT subsidy. They were not alone: other multinational corporations including Amazon, Iron Mountain and Eurofoods also put in applications for solar installations on the rooves of one or more of their buildings. This period also saw applications for a number of small wind turbines in Northern Ireland, presumably also private wire.
The second quarter saw far fewer applications overall, comprising a number of large wind and battery storage developments, including one application for 1,800 MW of offshore wind. When storage is excluded, the Q2 total is just over 3,000 MW, one of the highest totals for any quarter since the closure of the RO.
These recent small increases in planning applications and capacity suggest that, despite the discouraging policy landscape, developers are continuing to try to bring renewable energy projects through to fruition. Perhaps they anticipate that the government’s carbon reduction goals will soon necessitate greater support for renewables than we have seen for several years.
If renewables applications were to continue on this year’s trajectory, and all planned projects came to fruition, it would be sufficient to replace the 50 GW of non-renewable power generated in the whole of the UK in 2018 well before 2050. After the policy reversals of recent years, however, the chances that the majority of projects reach the generating phase is slim. The number of consented projects in the REPD entering the construction or operational phases now rarely reaches double figures in a quarter.
Councils across the UK are declaring their recognition of the climate emergency we face; in doing so, they make it incumbent upon themselves to turn that declaration into action. The same applies to the Government in respect of the net zero target. So far, the new Johnson administration has shown no sign of urgency regarding removing the financial or planning barriers created by its recent predecessors – or of addressing the longstanding grid infrastructure issues impeding the rollout of renewables.
The new prime minister has expressed his support for the 2050 target. It remains to be seen whether those words will be backed by the urgent action the circumstances require.
Featured image: diego_torres, via Pixabay