Creating a net zero whole energy system in the UK – UK Wind Week

This year’s UK Wind Week comes at an especially important time, with the United Nations COP26 climate change conference just a week away, hosted in the Scottish city of Glasgow. Wind has a vital role to play in delivering on the UK’s net zero targets. As mentioned in the UK’s Net Zero Strategy published just last week, the UK’s Carbon Budget 6 trajectory suggests that to accelerate decarbonisation while meeting demand, we will need to build technologies such as wind “at, or close to, their maximum technical limit”.

As we look to how we can accelerate the deployment of wind across the country, there are several reforms that we should look at to achieve wind power’s potential.

We support the reforms that both BEIS and Ofgem have been progressing around flexibility of the system. This year the government published its Smart Systems and Flexibility Strategy, which sets out a vision for driving a net zero energy system. We believe these actions need to be rolled out at pace to enable further renewable development. In addition, we particularly want to see the government’s commitment to define electricity storage as a distinct subset of generation in primary legislation; this will support the planning process, and connections processes which are currently not appropriate for co-location sites.

While RES supports the work done to date on flexibility, we believe there is one area of policy and regulations that needs urgent attention and puts our net zero future at risk if not addressed. The network charging regime, which determines the charges that generators pay to National Grid ESO for use of the GB transmission system, is not fit for purpose.

In short, the current charging regime is inadequate for supporting the development of renewables at the pace that we need it – it in fact disincentivises their development in the areas which would be most efficient.  This is because the generator Transmission Network Use of System (TNUoS) charges are determined based on where the generator is located relative to centres of major demand, and ultimately end up favouring the more densely populated South of England over other places such as Scotland.

This results in generators in the South of England pay relatively low TNUoS charges – or even receive credits – where generators in Scotland pay much higher TNUoS charges. However, this does not take into consideration that Scotland will produce a higher yield of wind, and that attaining planning permission for wind in England is extremely difficult at the moment. This is creating mixed signals for the market on where to develop wind and ultimately will stall development. This locational signal is set to get even stronger, which will make the charges even higher.

Scotland has a key role to play in the UK achieving net zero, particularly when it comes to wind power. Higher TNUoS charges will make the investment case for new large onshore wind development very challenging. Ofgem published a call for evidence (CfE) last month on whether there is a need to fundamentally review this system – which RES will be responding to with resounding support for a review. The CfE will hopefully be the start of a process that will provide an opportunity for the charging regime to be updated to compliment a system that will be increasingly based on renewables.

To support an energy system based on renewables, we need to increase the level of flexibility on the system. Part of this is supporting the work of the Smart System and Flexibility plan to incentivise battery storage deployment, increased smart use of interconnectors, and the exploration of long duration and large storage that will be able to store excess electricity in times of high supply, for use in times of low supply and high demand.

It also means supporting the development of green hydrogen, which has a key role to play in achieving this flexible energy system. Excess electricity can be turned into green hydrogen, which is suitable for storage and for use in those hard to abate areas of the system such as industry and travel. Investment in and support of green hydrogen should be a UK Government priority. RES announced in October a £3bn partnership with Octopus Energy to build green hydrogen plants across the UK. Green hydrogen plants fuelled by clean, renewable energy will help to deliver a home-grown, reliable, and cost-competitive source of energy that is insulated from future gas price volatility and can help accelerate the decarbonisation of industrial businesses.

Onshore wind is already a key part of the UK’s decarbonisation success story. Renewables have overtaken fossil fuels as the biggest source of UK power, and a quarter of that electricity comes from onshore wind. We see an onshore wind target of 30GW by 2030 as an important step in delivering net zero and continuing onshore wind’s success story. This target would create 27,000 high quality jobs that support a just transition, deliver high levels of local content that support levelling-up every part of the UK and permanently cut carbon emissions 6m tonnes a year.

With COP26 kicking off next week, the topics that have been addressed during UK Wind Week hold even greater significance. It is vital that UK policymakers take the steps needed to reform the policy areas that will be key to achieving a low carbon whole energy system based on renewables such as wind, and ultimately to delivering on the UK’s net zero target.

Kate Dooley
Policy & Regulatory Affairs Manager