As we near the end of 2023 with energy transition at the fore of the COP28 conference, it is a good opportunity to reflect on current actions being taken to reach net zero.
Recently, the State of Climate Action report found that global efforts to limit warming to 1.5°C are too slow, with progress lagging across almost every indicator. The report is one of many reminders that we need to accelerate the energy transition.
There has been positive progress with Britain’s energy regulator Ofgem, announcing new rules for renewables projects where, if projects are ready, then they are fast-tracked. If they are not ready or are unsuitable, they will be scrapped – removing so-called ‘zombie’ projects. Previously, projects saw up to a 15-year wait for network connection which has now rightly been accelerated given the urgency of progress.
The UK Government has also raised the maximum price that renewables can achieve in Contracts for Difference (CfD) auctions within the next allocation, Allocation Round 6 (AR6), lifting the fixed wind strike price by 66% and floating wind by 52%.
Despite this progress, the Scottish supply chain needs a significant process reset to strengthen our business case in renewables, moving as quickly as possible otherwise this work will be undertaken elsewhere. Scotland is a small country that has made significant impact, leading technical innovation since the Industrial Revolution. I believe Scotland is capable of doing this again in the next Industrial Revolution – the energy transition.
My suggestion is taking a system integration approach as demonstrated recently in a Dutch pilot offshore wind licencing round. In that case, non-pricing factors were considered including how power fluctuations, intermittency and curtailment can be addressed before grid connection to take some ‘strain’ out of the system.
Curtailment, when a wind farm is capable of exporting power to the grid but the grid is not capable of accepting it, should concern us all. Operators are paid not to produce this power under current UK CfD rules, an issue estimated to grow 10-fold to 40TWh per annum or more by 2035. To optimise wind farms, this should not be happening. There should be strategic energy management where power is stored, releasing the energy to the grid when required.
This system integration business model adoption would not only transform practices but encourage local supply chain to offer new products and services, rather than competing purely on price with an existing supplier base of existing equipment.
A report by Global Energy Monitor shows China is set to reach wind and solar targets five years ahead of schedule, should we need any reminders that this is a race not a journey where an integration approach is required imminently.
The UK could define best practice, creating economic mechanisms to allow energy system upgrades through a multi-vector approach i.e., storage plus co-location of generation sources (solar, wave, tidal). This would set us apart as we look to 2024, allowing our local supply chain to utilise valuable marine renewable energy sector strengths, a sector which has struggled to be economically viable at scale.
