Renewables in the UK have gone from strength to strength, making up 25% of electricity generation in the second quarter of 2015. Updated statistics from the Department for Energy and Climate Change (DECC) show that wind and PV generation increased by 76% compared to one year earlier, due to a combination of increased capacity and improved wind speeds. Renewables overall have grown by 43% year-on-year as increased rainfall led to greater hydro output and biomass capacity increased.
Quarter 2 of 2015 saw a combination of an increase in low-carbon generation and a reduction in coal output, which will have reduced emission levels. Coal made up just 20% of the mix, due to the closure of several power stations, the conversion of a unit at Drax power station from coal to biomass, and an increase in the carbon price floor from April 2015 which made coal generation more expensive. Low carbon output, which is both renewables and nuclear generation, reached 46.8% of generation in Quarter 2 while the largest proportion of generation was supplied by gas at 30%.
Two of Drax’s units now generate power from biomass and in 2014 produced 7.9TWh of renewable electricity. The biomass is predominantly sourced from by-products of farming such as straw or energy crops from marginal land. The biomass at Drax, based on lifecycle emissions, averaged 34gCO2/MJ in 2014 compared to an average of 280gCO2/ MJ for coal.
The increase in renewable capacity can be attributed to policies such as the Renewables Obligation (RO), the Feed-in–Tariff (FiT), and the exemption to the Climate Change Levy. In addition, carbon taxes have increased the financial viability of low-carbon generation. But since May this year, the government has announced a raft of changes to renewables support policies, such as the removal of the CCL exemption for renewables and the closure of the RO for new onshore wind projects one year earlier than planned, in March 2016. Additionally, pre-accreditation for FiTs has been removed, although, following consultation, DECC has indicated it may consider its reintroduction for some technologies. There is some uncertainty surrounding the new Contracts for Differences scheme for renewables and, unlike previous policies, it is run on a competitive basis.
The House of Lords has recently shown its disapproval for the sudden change in policy and voted to delete the amendment to onshore wind subsidies from the energy bill. However, the government is expected to try to reinsert the clause. Investor uncertainty is expected to impact new renewable projects for the UK, and the UK has recently fallen to 11th place in the Ernst & Young Renewable Attractiveness Index because of the lack of clarity on renewable policies going forward.
Analysis from the Committee on Climate Change shows that the UK is currently on track to outperform against its carbon budget of a 29% reduction by 2017, compared to 1990 levels. However, the impact of the recession has had a large amount to play in this. By 2020, the UK must reduce carbon emissions by 35% against 1990 and new nuclear capacity is not expected to be completed until at least 2025. This, combined with global pressure for action on climate change in the lead-up to the Paris talks at the end of this month, will bring pressure for the government to provide clarity on its renewable policies over the next few months.
Written By- Nikki Wilson