Renewables opportunities after COVID-19 future snapshot: The latest report from SmartestEnergy picks up where their Annual Energy Entrepreneurs report series left off, discovering that despite dwindling subsidy-support and construction delays caused by COVID-19, independent generation continued to deploy 75.4MW of capacity in 2020.

According to the report, the future remains positive for independent renewables deployment, which states as the UK aims to reach net-zero by 2050, that the independent sector could account for anywhere between 84GW – 148GW of low carbon and renewable generation. Project developers are now looking towards co-location with battery storage, merchant revenue models and innovative contract structures, such as Corporate PPAs, to turn that vision into reality.

Record low levels of demand are also detailed in the report, caused by the closure of workplaces across the UK in response to the pandemic, coupled with favourable weather conditions for renewables, which as generation was required to turn down created a new scenario for National Grid to deal with in order to help manage the energy system.

The National Grid primarily called upon the Balancing Mechanism (BM) alongside a newly introduced service, Optional Downward Flexibility Management (ODFM), which allows the System Operator to turn down assets on the distribution network that they were previously unable to access.

Just over 68GW of generation was turned down to help keep the electricity network in balance across the Spring Bank Holiday Weekend (22nd – 25th May). Scenarios like this are expected to become more commonplace in the future as more renewable generation connects to the grid and demand-side energy efficiency improves.

Head of Smart Generation, Angus Widdowson said: “The slowdown in projects coming online is of course to be expected in a year where the necessary implementation of lockdown conditions led to a stalling for the economy as a whole, as well as knock-on effects for the power sector. Ultimately, this has also given us insight into what National Grid requires from the future, renewable dominated energy system.

We are already seeing energy entrepreneurs respond to these emerging challenges and opportunities by taking new and innovative approaches to deployment. Co-location with storage to enable greater flexibility remains front of mind as technologies such as solar reach ever closer to grid parity; maximising revenue streams by operating across multiple markets; flexible approaches to selling power; and Corporate PPAs are all playing a part in helping projects deploy without subsidy.”

The report Key figures include:

  • Coal has gone from making up 28% of the UK’s overall Fuel Mix in 2010, to 2% in 2020 over the past decade,
  • The independent renewable sector across the same timeframe, has grown from just under 7GW to 24.8GW of capacity (Onshore Wind 8GW, Solar accounting for 8.3GW)
  • 279.7MW of independent renewable generation deployed in Scotland across 2019-20,
  • Now located with renewables across the UK is 74MW of operational battery storage
  • The total volume traded by SmartestEnergy in the BM between Oct 2019 – Jun 2020 was 15.69GW; the average value achieved by assets bid into the Balancing Mechanism by SmartestEnergy  across the same time period was £66.26/MWh
  • Solar and wind generators achieved an average value of around £2,500/MW when they were turned down as part of ODFM, over the Spring Bank Holiday Weekend (22nd-25th May)

Renewables opportunities after COVID-19 future snapshot

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