Investment in the UK renewable sector (excluding small hydropower) is set to increase as the sector is expected to almost double its capacity by 2030. Gas-based capacity is also slated to increase by 10 gigawatts (GW) between 2018 and 2030, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, ‘UK Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations, and Competitive Landscape’ reveals that the increase in capacity is aimed at filling up the capacity vacuum that will be left by the retirement of all coal power plants by 2025 and the closure of all but one nuclear plant by the next decade.
The Department for Business, Energy and Industrial Strategy (BEIS) report of January 2019 stated that a significant number of coal-fired power plants will close down by 2020, with the remaining 1.5GW of unabated coal capacity to retire by 2025. As a result, gas-based power generation is expected to fill the gap and constitute almost the entire thermal power fleet in the country by catering to the base-load capacity.
In addition, all nuclear plants in the country, except one, are scheduled to retire over the next 10 years. Therefore, a huge investment is required to ramp up renewable capacity to fill up the vacuum and meet electricity demand. Over the period 2019–2030, renewable capacity is expected to increase at a compound annual growth rate of 5.5% to reach 80.3GW.
Arkapal Sil, Power Industry Analyst at GlobalData, comments: “The UK’s commitment to renewable energy is reflected from its renewable energy roadmap of 2011 giving a target of 15% renewable energy consumption by 2030. But the intermittent nature of renewables necessitates integration of battery storage systems along with rapid grid modernization to accommodate varying renewable power while maintaining grid parity.”
The UK’s national grid recommended an investment of £59.8m between 2019 and 2020 to strengthen the transmission infrastructure and tackle the fast transition into a zero carbon economy. Investment in grid infrastructure is also required to cater to the massive electric car market in the country by 2030, which to some estimates may capture the entire market over the projected period. Furthermore, an estimated 18.4GW to 21.4GW of interconnection capacity will be required to connect the UK with other European markets by 2031 to enable the flow of a diverse energy mix in the country following Brexit.
Sil concludes: “The UK has a very robust track record of reducing its carbon dioxide emissions, and banking on gas and renewables for power generation will further help the country to achieve this. However, overdependence on these technologies may result in fluctuations in electricity bills owing to massive investments in infrastructure along with possible gas price swings in the international market.”