Clean Power 2030: What is it and how will the UK get there?
Following up on its pre-election manifesto commitments, the incoming Labour Government quickly moved to establish Great British Energy and then published the Clean Power 2030 Action Plan. (In this article, we’ll refer to the policy and Action Plan as ’CP2030’).
The National Energy System Operator (NESO) believes CP2030 is achievable – so long as everything that needs to happen (and it’s a long list) occurs in sequence and on time. However, politicians and energy experts alike agree that the UK’s already behind schedule in several key areas and needs to catch up.
So, what’s involved – and what needs to change – to ensure Britain has a clean power energy system by 2030? This article aims to answer these questions.
CP2030 in summary
CP2030 offers a clear and concise explanation of the path we’re on as a country, suggesting the Plan will “herald a new era of clean energy independence and tackle three major challenges:
- The need for a secure and affordable energy supply
- The creation of essential new energy industries, supported by skilled workers in their thousands
- The need to reduce greenhouse gas emissions and limit our contribution to the damaging effects of climate change
Clean Power by 2030 is a sprint towards these essential goals.
The Action Plan confirms NESO’s definition of clean power – whereby 95% of generation comes from clean (non-fossil fuel) sources.
To get there, the UK needs to coordinate its actions in three broad areas:
- Grid enhancement and planning reforms
- Renewable energy auctions
- Flexibility and dispatchable clean power
Let’s look at each of these in turn.
Grid enhancement and planning reforms
The Action Plan features ambitious targets for expanding the volume of renewable power on the grid alongside other supporting technologies.
Source: DESNZ Clean Power 2030 Action Plan
For example, CP2030 calls for at least a tripling of offshore wind from 14.8GW to 43-50GW, a doubling of onshore wind from 14.2GW to 27-29GW, and a near tripling of solar power from 16.6GW to 45-47GW – all within the next five years. The plan’s also aiming for up to 27GW of battery capacity, up to 6GW of long-duration energy storage, plus the ‘development of flexibility technologies’ and ‘consumer-led flexibility’.
Achieving these targets would help the UK minimise its use of (and reliance upon) gas – saving consumers money while being better for both the environment and energy security. However, barriers to progress include the time it takes to connect new generation (and demand) to the grid and constraints on the transmission system. These constraints are like a bottleneck, restricting the network’s ability to flow power from one point to another.
Energy regulator Ofgem is striving to reduce the existing connection queues and to streamline the process for future applications. The idea is to make it quicker and easier for ready-to-deploy projects that are aligned to CP2030 to connect. Until now, these have often been delayed by having to wait in line for other projects to connect first, some of which are speculative and may never be built (so called “zombie projects”).
Solar power installations and connections, and battery storage, can be delivered in a relatively short time – potentially from 1 to 1.5 years. But unsurprisingly, offshore wind assets take far longer to get started and completed. They involve complicated seabed leasing, extensive contract negotiations, the creation of a reliable supply chain, plus construction and engineering, not to mention substantial investment.
Traditionally, wind farms have been built on the periphery of the network – either offshore or, if onshore, in the far reaches of the country – where there’s an abundance of wind. Therefore, there’s a concentration of wind power in Scotland and along the North Sea coastline. The relatively small number of onshore wind farms in England can be attributed to a combination of restrictive planning regulations and a lack of local support for new infrastructure. However, Energy Secretary Ed Miliband has reformed the onshore wind planning rules, supporting deployment and making it harder for local communities in England to oppose such projects.
A wide range of network reinforcement programmes are now going ahead, expedited through the Accelerated Strategic Transmission Infrastructure (ASTI) framework. Worth £19.8 billion, this sets out a more streamlined regulatory and funding process for large strategic projects required by 2030.
At the same time, the Government’s also pressed on with planning reforms that should help to reduce the timescales associated with large-scale infrastructure programmes. Some of these projects will support the transition to net zero, while others (e.g. building data centres in the UK) are designed to encourage economic growth.
Renewable energy auctions
The UK has a new Contracts for Difference (CfD) allocation round – an auction where prospective low-carbon electricity generation projects compete for funding. Since it’s a ‘reverse auction’, the bidders try to undercut their rivals resulting in the lowest priced projects being awarded CFDs.
Historically, there were two pots in each auction. One was for the more established technologies, such as solar PV, onshore wind, and landfill gas (LFG). The other covered the less established technologies, such as geothermal, wave, and tidal stream. In more recent auctions, there’s sometimes been a separate pot for offshore wind. Whatever the number, the Government allocates a certain amount of money for each pot. It can also establish a related minimum and/or maximum amount of generation capacity for specific technologies.
One of the key principles of the CfD process is that it provides protection against huge swings in the power price, both for investors and consumers. The scheme pays generators a flat rate (linked to inflation) for the electricity they produce over a 15-year period.
Drax recently agreed Heads of Terms with the Government for a new type of CfD agreement (covering the period 2027-31). Subject to Parliamentary approval, the deal recognises the vital role Drax Power Station (DPS) plays in the UK energy system. DPS not only provides enough renewable electricity to power five million households – the number of homes in Scotland and Wales – but also delivers essential grid balancing services.
The ability of DPS to produce power and deliver additional services on demand, flexibly, is key. That’s because the UK is increasingly reliant upon intermittent renewables (such as wind and solar) to generate the required amount of power. In fact, the Government expects these natural resources to provide, by 2030, the majority of the country’s electricity.
During this transition and beyond, DPS will play an essential supporting role. It will increase its low carbon generation when windless, gloomy weather (also called ‘Dunkelflaute’) causes wind and solar output to drop. And when conditions change, DPS will reduce its output to help balance the grid. Such flexibility will also be vital during the winter peak periods.
Flexibility and dispatchable clean power
Alongside Ofgem and NESO, DESNZ will publish a Low Carbon Flexibility Roadmap in 2025. This will consolidate existing and proposed new actions designed to drive both short and long-duration flexibility for clean power in 2030, and net zero by 2050.
For example, it’s expected the system will need 40-50GW of dispatchable and long-duration flexible capacity by 2030 to support the power system during low renewable output periods. DPS and other dispatchable generation assets (such as the Drax-owned pumped storage hydro facility in Scotland, Cruachan Power Station) can provide some of this increased capacity.
Additionally, demand flexibility is expected to increase four-to-five times, potentially reaching 10-12GW through initiatives like smart charging of electric vehicles and time-shifting household demand. Some suppliers to the domestic market are already trialling a range of flexibility – or demand-side response (DSR) – services.
While this transition to more renewable power continues, there’s also the Review of Electricity Market Arrangements (REMA) happening and this may have an impact on, or overlap with, CP2030. For example, REMA discussions continue to include debate around zonal and national pricing – including changes to transmission and distribution charges. Any changes like this could result in more effective locational signals – e.g. not necessarily building wind generation plants only where there’s lots of wind. However, some believe it may unnecessarily introduce extra risk, increase the cost of capital, and make investment less likely.
Business suppliers, including Drax Energy Solutions, are already delivering value for flexible customers who can turn down during the winter peak periods through the Demand Flexibility Service (DFS). Each of these customers, helped by their supplier, can earn extra income by responding to wholesale price signals as per the needs of the DFS.
In addition to DFS, Drax Energy Solutions offers its own DSR solution – ElectriFlex – as well as other services that could help businesses play their part in supporting CP2030.
For more information, get in touch.
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