Facing geopolitical challenges and energy and climate crises, combined with the economic impacts of last year, the UK is shifting towards renewables and low-carbon energy to strengthen energy security.
Following the events in Ukraine, the global energy market was completely disrupted, resulting in volatile oil and gas prices, impacting countries worldwide, including the UK. The unprecedented increase in gas prices resulted in the breakdown of multiple energy suppliers and a rise in Ofgem’s price cap, impacting the cost of living and exposing the vulnerability of energy security in the UK. As a consequence of these events, energy security became a top priority for the UK Government, emphasised by the British Energy Security Strategy, focusing on expanding the domestic energy supply and eliminating connections with Russian oil and coal imports by the end of 2022 and Russian gas as soon as possible.
The Energy Industries Council (EIC) highlights that the strategy received a varied response, with many representatives in the offshore wind, solar, hydrogen and nuclear industries supporting the government targets to focus on these industries in achieving net zero, but others claiming that the strategy needed to focus more attention on energy efficiency, inward investment and supply chain capabilities.
A lot of attention was on the nuclear side of the strategy, with many industry reps stating that 24GW of installed nuclear capacity by 2050 was unrealistic due to the challenges in the nuclear industry related to skills, development costs and supply chain potential.
With the UK still very dependent on natural gas while nuclear capacity is low, the EIC’s report suggests that the nation has failed to install the required renewable capacity to stop customer bills from escalating. Despite this, the report highlights that the UK does have a significant project pipeline within multiple renewables and new tech industries. The challenge is removing barriers to growth and innovation and removing the required measures to enhance investment in the UK energy market.
According to the EIC’s UK Operational Insight Report 2022, the UK energy industry is changing its focus to renewable energy in response to Russian sanctions and increasing concerns regarding fossil fuels, as the nation experienced a considerable rise in renewable energy installations, driven by concerns over energy security and the need for stable and affordable low-carbon energy.
During this time, offshore wind was a dominated renewable energy market, with an installed capacity of 3.2 GW in 2022 across three offshore wind farms. Onshore wind capacity increased across several small-scale wind farms and 50MW South Farm solar PV projects. Rebecca Groundwater, the head of External Affairs of EIC, stated that it’s necessary to have a strategic focus on offshore wind, solar, hydrogen and nuclear industries to realistically achieve net zero by 2050 and meet domestic energy security needs.
Groundwater also highlighted that maximising the UK’s domestically sourced power installed capacity is vital to reaching energy independence and reducing reliance on Russian oil and gas. This is only possible by enabling the energy industry and supporting associated supply chain businesses by accelerating licensing processes and ensuring structured financing measures are in place.
Furthermore, the UK has 44 operational offshore wind farms with a collective capacity of 14.5 GW. There are also 550 operational onshore wind farms nationwide with a combined capacity of 15.2 GW. The UK’s installed solar capacity now exceeds 13 GW across 620 projects, and the UK’s installed energy from waste capacity is now at 2.7 GW across 106 operational sites.
Neil Golding, the head of market intelligence of EIC, states that if the necessary policies and investment can be delivered to support a resilient supply chain and portfolio of operational projects, the UK has good potential to be a global leader in the CCUS market. Golding explains there is an opportunity for the UK to support other European nations to decarbonise, especially those lacking storage capacity.