We need a stable Government policy

In March, the UK announced an ambitious target to increase the UK’s offshore wind capacity fivefold to 50GW by 2030. But recent policy changes have cast doubt on the support for green initiatives in general. And the mechanisms to support these targets aren’t necessarily in place. For example, the Government has failed to adapt the CfD model to continue supporting the growth of the industry, resulting in zero offshore wind projects allocated in the most recent round 5. 

But the mood music in recent weeks has been more positive following the news that the CfD is receiving an injection of support with the Government increasing the minimum strike price for the next round 6 auction, rising to £73/MWh. What the industry needs now is consistency and long-term assurances so that confidence can be restored after what has been a fairly bruising period for the sector.

Energy suppliers need to flex

The role of energy suppliers is likely to change as they move towards becoming energy managers, providing greater levels of advice and support, or even managing a customer’s buying and selling of energy. Their ability to adapt will likely be key to their success or failure.  It will also require a shift in how suppliers talk to their customers, who until relatively recently haven’t taken much of an interest in the energy they consume. The communications and education required will need to be such that large swathes of the population can engage with it. This is quite a big ask of an industry that has struggled to win the trust of its customers.  

There is also a definite shift with the big oil giants who are taking a far greater interest in how they grow their renewable generation portfolio, although significant action is still yet to materialise. With fossil fuel use, and oil and gas production, still driving healthy profits, it’s difficult to see when green energy investment is going to reach the levels required to move beyond what appears, in many cases, to be greenwashing. 

Operators and experts all agree that the electricity market and grid aren’t fit to meet future demands. Grid constraints in Britain are increasingly seen as one of the biggest challenges for decarbonising our energy sector with some renewable energy projects facing a 10 to 15-year delay in gaining a grid connection. It was encouraging to see that the autumn statement included a promise to ‘speed up access to the national grid’, including a reform to the grid connection process to cut waiting times.

Technology is critical as the industry adapts

The greater reliance upon micro and renewable generation technologies will drive a need for hardware and software technology solutions. Our own software, for example, can ensure wind farms are minimising downtime so that generation capacity is maximised. A future energy-as-a-service market could see consumers having the choice of generation type based on location, cost, green credentials and so on, with availability being a key factor in the mix. Complimentary software that can manage flexibility both locally and nationally for consumers, the grid and generators will also be vital. But there are complexities around who will “own” these technologies and how it can be simplified for the consumer to get maximum benefit while supporting the greater energy transition.

From a hardware perspective, the cradle-to-grave environmental impact of renewable technologies has to improve to avoid unnecessary increases in emissions levels during production and unwanted unrecyclable end-of-life materials. This is a big consideration for the growing numbers of electric vehicles, batteries, solar panels and wind turbines. However, the significant environmental improvements they offer compared with legacy solutions should not be lost in the noise of these arguments. The end-of-life treatment of such materials needs to be carefully considered and communicated to the buyer at the outset. A buyer shouldn’t have to conduct research to establish if they are being green-washed. We need better communications that illustrate the environmental impacts of products. 

A shift from consumer to prosumer

There continues to be a shift in the way we all think about energy, driven by rising costs, geo-political events and climate change. Moving forward, I believe there will be more people generating and consuming their own electricity. Already solar panels are quite commonplace and the rollout of heat pumps is gathering pace. Consumers may become ‘prosumers’, becoming more proactive in their own energy generation. People will start to look at sourcing energy from their own neighbourhoods. If a potential trade between neighbourhoods isn’t feasible, consumers could consider options from further away, or from the traditional ‘grid’. This potential new localised trading market will need a great deal of thought around messaging for a customer base that will have quite diverse needs and expectations. In order to unlock the masses, there needs to be greater collective communications that help with the education and engagement in energy. If we get it right, we could see localised community groups joining forces to develop or invest in large-scale solar arrays and wind farms.

There are wins for businesses too. There is a real opportunity to not only support but also capitalise on, a grid that cannot cope with demand. Agreements between generators, network operators and big businesses could help support a fragile grid where high energy consumption can be turned down or even off temporarily during periods of high demand.

Flexibility in the system is critical

There isn’t a single straight line that will take us to the energy generation mix of the future. Building flexibility into the system is going to be critical. The wind doesn’t blow consistently, the sun doesn’t always shine and the times at which consumers need energy doesn’t always match with when it’s being generated. Energy efficiency, electricity storage, smart appliances and trading in excess power will become commonplace among businesses and households. Customers will need to be aware of their options. They will need encouragement to go on this journey as well as assurances that their decisions are correct and future-proofed. A joined-up cleaner energy industry is the ultimate goal. It is achievable with full engagement from government, industry and consumers, supported by the very best in technology.