Policies and targets confirmed in a 138-page government plan to decarbonise Britain’s electricity generation by 2030. Solar energy and storage will play a key role alongside market reforms, changes to the planning process and a renewed queue for connections.
The UK government has committed to having around 30 GW more solar capacity in the UK generation mix by 2030, as part of its Clean Power 2030 Action Plan unveiled on 13 December 2024.
Targeting greater deployment of solar energy is just one of many measures included in the 138-page plan published by the Department for Energy Security and Net Zero (DESNZ). The UK government aims to generate enough clean energy to meet total annual electricity demand by 2030, supported by an unabated gas supply that can ‘only be used when necessary’.
The multifaceted approach proposed by DESNZ includes planning reforms, an overhaul of electricity markets, new short- and long-term flexibility measures, as well as policies to support supply chains and workforces in the renewable energy sector.
The goals
In terms of targets, solar capacity has been set in line with National Electricity System Operator (NESO) recommendations earlier in 2024. DESNZ has maintained a target of 45-47 GW for solar deployment by 2030, exceeding double the existing capacity, but a This figure is seen by industry association Solar Energy UK as below the sector’s full potential. However, this would position solar as at least the second – and possibly largest – generation technology in Britain by 2030. DESNZ has set a target of 43 to 50 GW of offshore wind energy and 27 to 29 GW of onshore wind capacity. The report notes that there is room for solar to exceed the 47 GW cap.
Battery energy storage systems (BESS) will also play a key role. A fivefold increase in the UK’s BESS fleet to 22-27 GW is included in the flexible capacity plans, as well as an increase in long-term energy storage (LDES) provision, to reach 4-6 GW of dispatchable power by 2030. for dispatchable energy also includes an unabated gas capacity of 35 GW, as well as 3-4 GW nuclear power – up from 5.9 GW in 2023.
The market
Major decisions still need to be made about the future of the UK’s wholesale electricity market, including whether zonal pricing should be introduced, but some changes appear set in stone.
A cap and floor schedule for LDES is coming, possibly as early as Q2 2025. There will also be changes in the capacity market, including new avenues to support the decarbonization of unabated gas plants, such as hydrogen-to-energy conversion, and possible multi-year agreements for unabated gas production. plants that are turned into carbon capture.
CfD contract terms can be extended to provide investors with greater certainty. A consultation on extending the current 15-year CfD term is planned for early 2025. There will also be greater transparency around auctions through the publication of an auction schedule, as well as information on capacity targets for upcoming allocation rounds. The government has also committed to reviewing auction parameters, including reference prices, which impact the budgets allocated for CfD rounds, following concerns raised by the industry.
Storage
To support a fivefold increase in the UK’s BESS fleet, the government has said it will explore how grid-scale batteries are included in future planning reforms. There will also be a consultation on how grid-scale batteries are included in environmental licensing rules, and DESNZ will consider financing options for small-scale batteries as part of its wider Warm Homes plan.
A review is also expected of the charges levied on home batteries and EV batteries that provide vehicle-to-grid services. Currently, consumption taxes, which form part of households’ electricity bills, are charged on imports but not refunded on exports of electricity. This discourages the provision of flexibility and the government plans to review the options, which will be set out in a 2025 clean energy flexibility roadmap.
Consumer-driven flexibility
Much of the 2030 plan relies on consumer-led flexibility. The rapid introduction of half-hourly billing in the retail market has been described as “crucial” to achieving the targets. Industry regulator Ofgem is overseeing the ongoing transformation. It is thought that more frequent payments combined with increasing adoption of smart meters should improve flexibility in the short term.
In the spring of 2025, the government will explain its position on a new licensing regime for consumer-driven flexibility service providers, tax regulators and accessibility of tariff data. Legislation is also expected on cybersecurity requirements for devices such as heat pumps.
Grids
Connection reform will continue and, subject to regulatory approval, the system operator will be given greater flexibility in how the queue is managed. This would allow NESO to manage the queue order based on over- and under-supply. Provisions will be made to ensure that projects already under development are not affected, such as those for which planning permission has been obtained, or support through a mechanism such as the CfD or the capacity market.
Plan reform
The Clean Power Action Plan also highlights the government’s decision to increase the capacity threshold that determines when solar projects in England become subject to central government approval for planning permission. This will be increased from 50 MW to 100 MW in accordance with wind energy planning rules. Wider planning reforms are still to come, and the government plans to introduce a bill with measures to speed up approvals for critical infrastructure such as network upgrades.
A review of secondary legislation and other legal requirements will focus on the processes used to challenge planning approvals for projects. Most legal challenges to government consent orders for nationally important infrastructure are unsuccessful in England, but can lead to uncertainty and delays to projects.
Great British energy
A new state investment vehicle Great British Energy (GBE) will “lead or co-lead” renewable generation projects during the pre-development phase and, in some cases, construction and operation, the government said. This is an effort to reduce the risks of investing in renewable energy sources and accelerate development timelines. GBE is also expected to develop projects on public land, increasing generation capacity on government-owned estates.
Economy
The British government is positioning its Clean Power 2030 policy as a plan to unlock 40 billion British pounds ($50 billion) in investment annually, creating thousands of jobs. Improving living standards through economic growth was a central part of the Labor Party’s 2024 general election campaign. In July, Chris Hewett, CEO of Solar Energy UK, said pv magazine “There is no way to get there [the government’s] growth strategy that does not make the transition to clean energy.”
One of the key challenges will be to achieve the 2030 targets without putting pressure on households. According to a House of Commons report published in November, UK electricity prices were higher than all but three EU member states (Germany, Denmark and Ireland) in the first half of 2024. Political opposition to the government’s plans hinges on the need to reduce energy costs for businesses and consumers.
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