UK renewables capacity overtakes fossil fuels for the first time

The UK's energy industry has chalked off another green record, with renewables capacity overtaking fossil fuel capacity for the first time.

The latest report from Drax Electric Insights today reveals UK renewables capacity available to the grid now stands at 42GW, while fossil fuel capacity has fallen to 40.6GW continuing a trend that has seen a third of fossil fuel generating capacity retired over the past five years.

The report, which was produced by researchers from Imperial College London on behalf of Drax, shows that wind energy continues to dominate the renewables sector providing 20GW of capacity. Solar provides a further 13GW, while biomass comes in third place with 3.2GW.

The milestone refers to capacity rather than generation. However, the increase in capacity has led to a series of clean energy generation records in recent months and years, most notably with renewables and nuclear combined topping 50 per cent of the UK's power mix for the first time.

The positive trends for renewables are set to continue with the UK government planning to retire its last coal fired power plants by 2025 and a fleet of new offshore wind projects in the pipeline.

However, analysts have warned that in the short to medium term rising gas prices and the government's failure to increase its carbon floor price could lead to a revival in coal generation. Meanwhile, clean energy advocates have argued more renewables capacity could be added faster and at lower cost if Ministers allowed onshore wind and solar farms to compete for government-backed clean power contracts. 

The Drax report also investigates why power prices have risen this year, reaching a 10 year high in recent months.

It argues Brexit is a significant contributory factor. "An 18 per cent increase in power costs was caused by the currency devaluation associated with the 2016 referendum result, when the GB Pound fell against the Euro and US Dollar," the report states.

However, it also notes that balancing the power system has added six per cent to wholesale prices "as the day-to-day costs of running the transmission system came in at £3.8m per day during the third quarter of 2018".

Dr Iain Staffell from Imperial acknowledged rising grid costs are a result of an increased reliance on renewable power sources.

"The cost of balancing the system has doubled in the last four years," he said. "The amount of flexible generation on the system is a key driver. Balancing costs rise when the output from flexible generators such as gas, coal, biomass and hydro, falls below 10GW."

However, clean energy advocates argue rising grid costs can be offset and managed as renewables costs continue to fall and operators invest in new energy storage capacity and smart grid technologies.

Earlier this week a new analysis from trade bodies RenewableUK and the Solar Trade Association revealed the UK energy storage sector is growing far faster than expected with over 300 companies delivering around 7GW of capacity that is either built, under construction, or in planning development - a level that far exceeds official projections.

Staffell said the emergence of more flexible gird technologies would be crucial for improving grid security and curbing costs. "Having a 'brittle' power system with limited flexibility will be more expensive to control," he said. "More flexible generation, storage and demand-side response will be critical in minimising system costs in the future."

Andy Koss, CEO of Drax Power, which has pursued a strategy of switching from predominantly coal generation to biomass and gas power, said it was important the UK continue to boost its renewables capacity, while simultaneously investing in new flexible grid services.

"More renewables are crucial for reducing carbon emissions and helping us to meet our climate targets - but flexible, lower carbon generation, is also clearly vital for controlling the costs of maintaining a stable, low carbon power system," he said. "The IPCC's report recognised that in order to meet our climate change targets, up to 85 per cent of global power generation needs to come from renewables by 2050. This means the remainder will have to be provided by flexible sources, which can support the system and help to keep costs down - such as biomass, hydro, pumped storage as well as high efficiency gas."

In related news, green energy specialist SIMEC Atlantis Energy Limited this week provided an update on its plans to convert the Uskmouth Power Station in Wales from coal to 100 per cent waste derived energy pellets.

The company is working on ambitious plans to convert the plant so it can export 220MW of baseload power to the grid using energy pellets produced from non-recyclable waste destined for landfill.

It announced this week it has awarded the Environmental Planning and Permitting contract for the project to consultancy RPS, while the front-end engineering and design (FEED) contract has gone to a consortium of WSP UK Limited and RJM Corporation Technical Services Limited.

The conversion is expected to take 18 months following the completion of the FEED process, with a target of first production coming on line in the fourth quarter of 2020.