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Renewables in the EU and UK – the state of play

05 May 2018 Dave Elliott

The EU ought to reach its target of getting 20% of its energy from renewables by 2020, and is now looking to targets for 2030- with pressures to go well beyond the 27% currently agreed. The UK will (or may!) be out of the EU by then and it is certainly having problems getting to its 15% by 2020 national target – it has done well on power (28% or more) but not so well on heat and transport. But a heat network programme has been launched, along with an energy-saving programme

insulation
(Courtesy: Shutterstock/SpeedKingz)

The European Union is in the midst of resetting its longer-term targets for renewables, given the expectation that it will more or less meet its overall target of getting 20% of its total primary energy from renewables by 2020, with 11 countries already achieving or even exceeding the national targets set by the EU. For example, by 2016 Sweden had got to around 54%, 5% over its target, although some others have been doing less well: by 2016 the UK had only got to around 9%, against the actually quite low 15% national renewable energy target that had been agreed with the EU. But most of the laggards may just about reach their national targets by 2020 or soon after, hopefully even the UK. For the next stage, the European Commission initially proposed a somewhat unambitious overall EU target of 27% of primary energy by 2030, with individual national targets to be left to each country to decide.

A bit cynically, you might say that, with the UK out of the EU by then, the EU overall should then be able to do better than 27%. Certainly, the European Parliament has called for the overall EU 2030 target to be raised to 35%, with, in addition, EU energy consumption to be cut by 40%, against the ECs recommended 30%. They also wanted at least 12% of the energy consumed in the transport sector to come from renewables. We await an EC ruling.

Wind is still the largest of the new (non-hydro) renewables in the EU, with over 155GW installed by the end of 2017 and offshore wind now adding to the total. It has been claimed that 30% of EU power could be from wind by 2030.

However, PV solar is coming up fast behind, with over 100 GW installed by 2017, and 6 GW installed in 2017. Germany installed 1.75 GW of new PV, a 23% growth. But the UK’s 912 MW of PV additions represented a 54% fall in new capacity against 2016’s growth, as solar subsidy programmes were scaled back further. France and the Netherlands, both a bit late to the PV area, nevertheless installed 887 MW and 853 MW respectively and more is now expected. Former shining solar star Spain only installed 135 MW of new PV in 2017, but that is 145% up on the 55MW in 2016.

The early expansion of wind and solar in the EU was much aided by the use of guaranteed price feed-in tariffs, but these FiTs are now being phased out in preference for competitive project tendering/contract auction based systems: see my earlier post. Renewable energy projects like PV have also enjoyed “priority dispatch” to the grid and have been exempt from grid balancing responsibilities. But maybe not after 2020 – changes to that are also afoot.

The UK may soon be outside of all these arrangements, given Brexit, but it is actually adopting a similar approach. It has been cutting back its FiT support, which has impacted on small scale PV, and it has moved to a contract auction-based approach (the CfD system) for larger renewable projects- although on shore wind and large PV have of late been excluded from that. Nevertheless, on shore wind and PV have both continued to expand, if more slowly that before. National Grid (NG) says that “distributed” renewable energy, solar and wind power connected at the local distribution level, as opposed to the national transmission level of the electricity grid system, at present contribute around 7% of UK electricity supply on an annual basis. This includes around 5.7 GW of wind and 13 GW of solar, each supplying roughly the same amount of energy on an annual basis. NG had previously only reported on the capacity linked at transmission level, i.e. the larger projects, including the large offshore wind farms, the latter having reached 7.5 GW so far.

More offshore wind projects are planned, and, as UK renewable capacity builds up (it’s already passed 40 GW), grid balancing/curtailment issues will get tougher, in summer especially, when, NG notes, UK night time power demand may fall to around 17 GW.  So it says: “We may need to take more actions to curtail generation and possibly instruct inflexible generators to reduce their output in order to balance the system.” Of course peak power demand, especially in winter evenings, will be much higher, maybe 42 GW. But renewables, big and small, will soon at times be able to supply most of that, with some of the 30 GW of flexible gas turbines that are in place helping to top up when renewables can’t deliver. So there’s no room for the 9 GW or so of existing nuclear. Though since that is inflexible, NG is considering more wind curtailment at times, to make room for it. Surely a bad move?

While renewables are doing quite well in the UK in power generation terms, supplying over 28% of UK electricity, that is not yet making much of an impression on heat and transport- much larger areas of energy use. Hence its low primary energy figure so far. The plan is, or at least was, to use non-fossil electricity (renewables and nuclear) for heating, via electric heat pumps, and for personal road transport, via electric vehicles. With batteries getting cheaper, EV take-up is improving, but there have been concerns about the viability of supplying enough power to meet this demand and also the demand for heating. For one thing, the grid system might not be able to cope with the resultant evening-time demand peak.  So the use of gas for heating is likely to continue, although some of this could be green gas – biogas, and syngas made by electrolysis, using surplus renewable electricity. A better idea than curtailment. And possibly competitive with hydrogen made via steam reforming of fossil methane, if you include the cost of CCS to make the later route less carbon intense. Certainly, as green power prices fall, and electrolysers get cheaper and more efficient, the relative advantage of using electrolysis will improve.

On the demand side, the UK government has proposed a £6bn programme for domestic energy savings, re-focusing its flagship Energy Company Obligation (ECO) entirely on low-income homes and the vulnerable, “cutting bills for thousands more families until at least 2028”. It will also extend the Warm Home Discount, enabling over 2 million low income and vulnerable customers to receive £140 off their energy bills next winter. And it will back innovations that cut demand.

All good stuff as far as it goes, with the practical focus on insulation: it does put pressure on energy supply companies to deliver help. But will they? There have sometimes been a little reticent in the past and take-up has often been slow. It is also a longer term 10 year programme, with concerns emerging about the length of time it will take to have a real impact.

Perhaps more important for the medium to long term, and of wider relevance, is the governments support for green heating networks- seen as a more efficient form of heat delivery in some urban locations. In its ‘Clean Growth Strategy’ scenarios, heat networks were projected to meet 17% of heat demand in homes and up to 24% of heat demand in industrial and public-sector buildings by 2050 – they currently only supply around 1% of buildings’ heat demandA £320m support programme has now been confirmed – small, but a start.

That, along with improved energy efficiency, may help compensate for the halt to the £1bn fossil CCS programme and the delay to the multi-billion-pound nuclear programme: there seems little chance of Hinkley starting up before 2027, if then, and the same goes for the other proposed, though even more uncertain, nuclear plants, e.g. Sizewell C’s start-up date has been put at 2031. By contrast, long before then, we should be seeing more offshore wind projects starting up, with costs falling. On-shore wind could also be making a bigger contribution, as could PV solar, if the government would relent on its planning and funding blocks to these increasingly economic options.  But either way, leaving aside green (or nuclear) power, the green heat side clearly needs more backing.

The same sort of issues are also emerging elsewhere in the EU, as my next two columns will illustrate – starting with France.

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