Solar could help unlock £70 billion economic opportunity for UK

The UK solar sector could play a pivotal role in supporting the UK reach a “beyond net zero” scenario by achieving a five-fold capacity increase by 2035.

A report released by the UK Business Council for Sustainable Development (BCSD) has found that the economic opportunities for the UK to adopt a “beyond net zero” strategy could see the UK establish itself at the forefront of the renewable market. Solar has been touted as a key enabling technology.

The report highlights the opportunities the UK has in becoming a major exporter of renewable energy, referencing that it could be similar to when the UK became a major exporter of North Sea oil and gas during the 1980s and 1990s.

Alongside solar, offshore wind could be pivotal in achieving this aim. With the nation’s advantage in being situated in close proximity to the North Sea, the Atlantic Ocean and the Celtic Sea, there are vast areas that could be used to generate large quantities of renewable energy via offshore wind.

In light of this, the UK Government has already established a 50GW by 2030 target for offshore wind. Through this, it is hoped this will support its decarbonisation goals and attract investment within the sector. It has also introduced key legislations to help achieve this target such as a the widely successful Contracts for Difference (CfD) scheme.

However, despite the positives of the UK Government, there are major barriers preventing the UK from becoming a clean energy superpower which must be overcome to help the nation secure the economic opportunity.

These obstacles, which could become enablers if overcome in the correct way, include:

• Creating a National Grid that is fit for purpose.
• Delivering massive energy storage, using a range of technologies, to capture the tens of Terawatts of power lost each year when Britain needs to switch off renewable energy sources because they are generating more energy than the grid can handle.
• A national programme of retrofit to fix Britain’s stock of old draughty homes, offices, and other commercial properties.
• Early intervention to catalyse the market for hydrogen.

According to the report, in the “beyond net zero” scenario, the UK could achieve “economic benefits of £70.3 billion a year by 2050 – not including the social value of reduced greenhouse gas emissions and averted climate change. This includes an additional £36.4 billion of Gross Valued Added (GVA) delivered by clean energy generation and a £17 billion boost to the UK’s trade balance. There would be a further £2.2 billion of agglomeration benefits, while disposable incomes would see a £14.7 billion bump as a result of lower energy prices.”

Alongside offshore wind, the report also outlines a number of other technologies that need to be supported to help achieve the beyond net zero scenario such as energy storage and hydrogen. The report includes a number of potential policy options to help fully exploit the UK’s clean growth potential. These include:

• An annual quota of government interest-free ‘retrofit loans’ provided to owner-occupier households, as well as residential and commercial landlords.
• Large-scale rooftop solar installations to achieve a five-fold increase in solar capacity by 2035.
• Government innovation funding to leverage private investment, for the development and trialling of alternative storage solutions to hydrogen and electric batteries.
• Use of ‘priority grid connection auctions’ for electricity generators and energy storage providers to raise money for investment in National Grid priority projects.
• Regulating to place an obligation on wholesale or retail gas suppliers to blend all gas supplies with a residual amount of hydrogen.

“Today, more than 90% of global GDP is covered by some form of net zero target. The findings from our report are clear. The UK can unlock more than £70 billion of economic benefits a year if we become a world leader in the race to net zero,” said Jason Longhurst, chair of the UK Business Council for Sustainable Development.

“We have the potential to generate huge amounts of clean energy which would turn the UK from a net importer of energy to a nation exporting vast amounts of clean power, worth £17 billion a year, to mainland Europe.

“We believe this paper delivers an evidence base to enable our government to drive new incentives to transition, leverage in further private sector investment and position the UK as one of the world’s most investable markets for companies tackling the challenges created by climate change.

“Having fired the starting pistol on the race to net zero it’s now time for the public and private sector to work together to put Britain at the front of the field again.”

This article first appeared in Solar Power Portal's sister publication Current±.