New plan shows renewables can displace gas power within 5 years

As gas prices are many times higher than the cost of renewables, low carbon technologies offer the cheapest route to the UK’s energy independence, so the industry is keen to work more closely with Ministers to ensure new renewable projects are built faster and any remaining fossil fuel generation plays only a minor role in peak demand. With renewables already set to expand rapidly this decade, the plan would unlock a further 25% growth in renewable power by 2030.

The measures in the Renewable Energy Response Plan include increasing the amount of new renewable capacity which will be secured in this year’s auction for contracts to generate clean power. This can be achieved by removing the limit imposed on the amount of onshore wind capacity which can go ahead in this auction and raising the budget available for offshore wind as more projects are now shovel-ready than when the Government set out their initial ambitions. By investing an extra £68 million in the budget for offshore wind, we can cut consumers’ exposure to gas by £1.5 billion.   

Government should also ensure that the planning process for renewables moves faster, to maximise the capacity that can be secured from annual clean power auctions starting in 2023. Planning decisions for offshore wind projects should be taken within a statutory timeframe of 1 year, whereas it’s currently taking at least 2-3 years. The planning regime for onshore wind in England is in urgent need of reform as in practice it is blocking nearly all new projects from going ahead, including those with broad community support. Most UK onshore wind development will take place in Scotland where, wind speeds are strongest, and the Scottish Government should clarify and expedite the planning system, which is currently being reviewed. 

Other key reforms are needed so that regulation doesn’t undermine investment in renewables. The energy regulator, Ofgem, should urgently enable new grid investment to bring forward renewable projects faster and tackle the enormous disparities in the way renewable energy generators are charged for using the grid – for example, projects in Scotland pay 15 times more for this than generators in England and Wales. New rules are also needed to bring forward grid-scale batteries as fast as possible.

Innovative technology can play a part too, as the cost of green hydrogen falls rapidly. If the Government brought forward a 5GW renewable hydrogen target by 2030, this could replace 5% of total UK gas demand, equivalent to £5.7bn.

RenewableUK’s CEO Dan McGrail said: “With the rocketing global cost of gas continuing to push up energy bills, Government and industry need to work together to cut our reliance on gas to generate electricity as quickly as possible and I believe we can do that within five years. We can start on this by doubling down on what we can get in this year’s clean power auctions, to protect consumers from global price shocks in the future.

“If we remove the cap on cheap onshore wind and solar capacity in this auction, then shovel-ready projects could be generating power by next year. And we risk being penny-wise but pound-foolish if we don’t take this opportunity to invest a small amount extra in offshore wind for a huge payback to consumers, alongside growing our domestic supply chain. The new factories we want to see in ports around the UK are a golden opportunity to create thousands of new jobs and attract billions in private investment, especially in parts of the country which need levelling up most. 

“And we can’t have a new energy strategy without a plan for grid investment alongside it. National Grid needs the freedom to invest more in accelerating the transformation of our energy system, to make the most of the huge amounts of renewable electricity we’re generating. There’s a pressing case for Ofgem reforming grid charges for renewable generators, as the current system actively deters investment in some of the UK’s largest and most productive projects at a time when we desperately need new power sources.

“These extraordinary measures can boost the UK’s energy security faster than any alternative and our plans for a rapid shift away from gas power is the best option for consumers”.