LONDON — Supply chain investments that are critical for the growth of the UK’s renewable energy industry are at risk because of hit-and-miss government policies, according to a new report.
The study says the government could do more to “narrow the scope of debate about the technology mix beyond 2020” and calls for it to work with industry and academia to establish “low regrets levels of deployment and to ensure policies are in place to incentivise investments”.
The report has been compiled by think-tank Carbon Connect and presents over 30 findings drawn from a year-long, independent inquiry into the UK power sector.
The inquiry is the second in a cross-party series called Future Electricity – the first report on fossil fuels was published earlier this year and the next will focus on nuclear power.
The report was launched in Westminster this week by former energy minister Charles Hendry, who said the UK renewables sector was “not in a good place” and “a phenomenal amount of investment” was need to rectify this.
He added that “so often, the debate on renewables is characterised by a lack of facts”, a point backed up by UK Energy Secretary Ed Davey, who said: “We need to see a more mature debate on renewables and energy generally.”
The report states that is the government must do more to “provide the longer term clarity that could secure supply chain investments to give the UK a head-start in the global race”.
It warns that these investments “could be missed, delayed or more expensive if there insufficient confidence about long-term demand for key technologies such as offshore wind”.
And it added that “work by government to help incentivise these investments” was vital to “help mitigate against high costs if new nuclear or carbon capture and storage development fails or is delayed”.
The report states that the UK has massive renewables resources but “only a small fraction is currently harnessed” – 11.3 percent of Britain’s total electricity supply last year.
The government wants to lift this to 30 percent by 2030 and the report states that while the UK is on track for this target, achieving it is contingent on “planning consents for offshore wind, the success of biomass conversions and technology cost reductions for offshore wind and solar PV”.
Whether these cost reductions can be achieved is dependant on supply chain investment and the report says this is critical, as “offshore wind is likely to be the only renewable technology that can de deployed at sufficient scale should other low carbon technologies not deliver as expected”.
Davey pointed to the recent openings of offshore projects London Array and Greater Gabbard as a sign of “how well placed the UK is for offshore wind”, but the fear is that there is not enough investor confidence to sustain their momentum to 2020 and beyond.
The report also looks at the sustainability of electricity from biomass and concludes that bioenergy overall could provide up to 10 percent of energy and reduce the cost of cutting carbon by £44 billion (€52 billion) per year in 2050.
But it adds that this will only happen if carbon capture and storage technology is commercialised and adequate feedstocks can be sustainably sourced.
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