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SmartestEnergy Energy Entrepreneurs Report 2019

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Investment in independent renewables tops £3bn but focus shifts to other revenue sources

Investment continues despite removal of subsidy

More than £3bn has now been pumped into independent renewable generation energy projects across Great Britain but investors are rapidly shifting their focus to areas such as battery storage in the face of subsidy cuts, a new report reveals.

The 7th annual Energy Entrepreneurs Report from SmartestEnergy shows that £158m was invested by developers, farmers, landowners and communities in 80 new commercial-scale independent renewable projects last year.

Although that took the total spend since the report was launched to over £3bn across almost 7,000 projects, the 5.3% year-on-year growth in investment was the lowest since the inception of the Energy Entrepreneurs Report, as the impact of cuts to renewable subsidies continued to be felt.

Entrepreneurs branching out for new opportunities

However, the report highlights how energy entrepreneurs are now diversifying into areas such as battery storage and gas peaking plants to take advantage of new revenue streams as well as supporting the development of further renewable energy capacity in the future.

Dave Cockshott, Chief Commercial Officer for SmartestEnergy, said the report highlights how independent energy investors are now adjusting to changes in the funding landscape.

“The latest figures underline the huge contribution the independent generation sector is making to help meet the UK’s ambitions to reduce emissions and ensure security of supply,”

he said.

“The end of subsidies has inevitably seen investment in new generation projects plateau, but the focus is now shifting to new ways for energy entrepreneurs to profit from taking part in the transition to a smarter, lower carbon energy system.”

The amount of battery storage capacity in the planning system more than doubled to 4.9GW during 2018 according to UK Government figures, with many independent generators looking to tap into opportunities to supply services to help balance electricity supply and demand on the grid.

Peaking gas plant complementing development of renewables

The report shows that energy entrepreneurs in the UK invested more than £36m in gas-peaking plants which delivered in 2018. Peakers are flexible generation assets that can be quickly switched on and off when needed at times of high electricity demand.

Cockshott said gas peakers are playing an important role in helping balance supply and demand across the grid by producing electricity quickly. At times when wind and solar resources may be limited, gas peakers can step-in alongside battery storage to provide much-needed power at short notice.

“As coal-fired power stations continue to close and the nuclear industry suffers further setbacks with plans for a number of plants being shelved or suspended, a fresh opportunity is arising for energy entrepreneurs to plug the capacity gap,”

said Cockshott.

“The need for more renewables still very much remains, but now that need is as part of a smarter energy mix which will in turn support further low-carbon generation in the future. The energy entrepreneurs able to respond to this changing landscape are well-placed to thrive, taking advantage of immediate opportunities in the short term and driving further decarbonisation of the UK energy system.”

Key figures from this year’s report include:

  • Commercial scale independent renewables accounted for 9.5% of the electricity generated in Great Britain last year, up from 4.3% in 2012.
  • Total capacity of the sector now 14.1GW from 4.7GW in 2012
  • The sector can power 8.3 million households, more than double the 3.9 million figure in 2012.
  • The wholesale value of the electricity produced by independent generators stood at £1.8 billion in 2018.
  • 6,889 independent commercial-scale renewable projects now operating, up from 2,011 in 2012.
  • Solar continues to be the dominant technology by capacity, accounting for 6GW of the 14.1GW total independent renewable capacity, followed by onshore wind, anaerobic digestion and hydro.
Business News Wales