Welcome to Solar Power Portal’s day one coverage of Solar & Storage Live 2023, taking place at the NEC in Birmingham over 17-19 October. Our editorial team will be reporting live from the event, bringing you all the insight, news and views from the show floor.
Graham Stuart reiterates governmental support for solar
Kickstarting this year’s edition of Solar and Storage Live at the NEC Birmingham was Graham Stuart, minister of state for energy security and net zero, who outlined the government’s support for solar installations in the UK.
He said: “We are determined and focused on delivering the infrastructure to help the solar industry to succeed.”
Infrastructure continues to be one of the biggest hinderances on the widescale rollout of solar projects across the UK. This was a topic explored in detail by Nick Winser, the electricity networks commissioner, in his landmark report released earlier this year.
According to the report, the “current length of time taken to build new electricity transmission from identification of need to commissioning was 12 to 14 years. Large wind farms are built in half this time”.
However, the release of the report has spurred the government into providing further support for the necessary infrastructure to support the growing solar sector.
Graham was also keen to reiterate the government’s support for solar, despite various reports emerging that Sunak is set to implement further restrictions on the installation of new solar farms.
“Solar is the cheapest for of renewable energy and we are committed to supporting it,” Stuart said.
Stuart was also keen to reference the progress that has been made in regards to removing coal-power from the energy mix, with solar labelled as playing a “major role” in achieving this.
“Around 11 years ago, 40% of the energy mix came from coal in the UK, next year it will be 0%. Solar has been key in achieving this,” Stuart said.
‘We can’t ignore the IRA, the UK must respond,’ Solar & Storage Live 2023 hears
“When the [Inflation Reduction Act (IRA)] came into place, it felt like a game changer,” said Roger Barker, director of policy and governance at The Institute of Directors.
“Europe now sees its own manufacturing investment seeping away into the US.”
This, Barker said speaking during the ‘How is International Rivalry Driving Green Industrial Policy?’ panel at Solar and Storage Live this morning, left the UK in a “sorry and desperate situation.”
The IRA – which celebrated its first year anniversary in August – saw the US government accelerate investment in renewable and green technology by offering public and private entities US$369 billion (£289 billion) in subsidies through investment allowances, tax credits and other financial incentives for investment.
Although the UK can’t match the US in terms of scale of finance, Barker called for a targeted approach, such as offering guaranteed minimum pricing through scheme akin to the Contracts for Difference scheme of supporting a public/private partnership to de-risk renewable investment.
“We can’t ignore the IRA, we must respond,” added Barker.
Fellow panellist Dipika Keen, head of business transactions knowledge and knowledge lead for net zero policy and regulation at the law firm Osborne Clarke, offered a different perspective.
“You could see the US IRA and the EU Green Industrial plan as a response the UK [green industry’s] own early start,” said Keen.
As examples, Keen cited that the UK was first to enshrine a net zero law in its domestic legislation, which it strengthened in 2019. The UK has also done well in providing financial support or renewable projects in terms of Renewable Obligation Certificates (ROCs) and the CfD scheme.
“But there are more things we [the UK] need to do, as it may appear that we have lost focus and momentum,” added Keen, for example subsidising new, emerging businesses models, such as those for hydrogen storage.
When asked how much room for manoeuvre the panel believed labour will have and whether they believed the party would be able to do things differently or be hemmed in by the same issues as the present government, Keen responded:
“The monetary and fiscal environment won’t change which may have led to these setbacks [referring to Labour recently rowing back on its green investment targets], but a new government could bring a renewed sense of optimism and focus which from an investor perspective does help.”
‘Current NPS must be updated to include solar,’ says Quod
“The current National Policy Statement (NPS) was created in 2011 and does not include solar, we need an NPS that includes solar,” said Matthew Sharpe, senior director at Quod at Solar and Storage Live.
Speaking on the ‘Update on NPS EN-3 and How We Can Demonstrate the Benefits of NSIPs’ panel, a major topic of discussion was the draft NPS, which is expected to be updated in the coming weeks. One of the positives with this legislation is that it will include solar in it which will help streamline projects in the UK.
“Having an up-to-date NPS is very important for the industry,” Sharpe added.
But what should be included in the new draft of the NPS? Mark Owen-Lloyd, consultant at PVDP GmbH, developer of the 840MW Botley West solar NSIP in Oxfordshire, hopes that it will be “quicker and simpler for NSIPs” to be developed.
Fellow panellist Simon Enright, chair at Freuds, shed light on a posiitve aspect for large-scale solar projects – the general public’s acceptance of solar.
“The public do not spend their spare time thinking about solar. They do, though, have a positive attitude to solar. They come into the room and say it’s a good idea,” Enright said.
“There is a wider acceptance that solar is a good part of the wider energy mix.”
Owen-Lloyd also described the current development consent order (DCO) application as “very draining” not just financially, but in terms of maintaining momentum and support for the solar project.
“As a developer it is exhausting doing a DCO application, it is very draining. And it doesn’t end up with a better project, it puts enormous strain on everyone involved,” Owen-Lloyd concluded.
The UK has “reached 3GW of operational storage capacity, with no government support,” says CMS
“We’ve got to 3GW of operational storage capacity, with no government support,” said Helen Raynsford, senior associate at the law firm CMS during this afternoon’s ‘The Growth of the Utility Scale Storage Market’ panel.
“Co-location is driving storage growth [in the UK], but it is very much in its infancy and needs to be understood better,” she added.
Raynsford pointed out that although wholesale revenues won’t be affected by co-location, bankability is a larger issue, as the length and complexity of setting co-located sites live, makes it harder to get lenders over the line.
Fellow panelist Robyn Lucas, director of data science and research at Modo Energy, noted that average battery storage revenues for two-hour storage last year were £2,000MWh per year, which caused huge growth in the market.
However, all frequency markets are now saturated, meaning that the National Grid do not need to buy as much volume, which has caused prices to crash, Lucas continued.
Modo Energy’s recent monthly Revenue Benchmark found that battery energy storage revenues increased by 53% between June and July, a significant contribution to this increase were Dynamic Containment revenues which were 80% higher in July than in June and contributed 66% of the technology’s revenue that month.
Despite the recent increase a report by LCP Delta showed a 71% decline in average profits for Britain’s battery storage market, which the energy analytics and consultancy firm largely attributed falls from the highs in average battery market profits of 2021 and 2022.
The current average revenue for storage is £60,000/MWh per year, £75,000/MWh per year for two-hour systems and £58,000/MWh for one-hour, revealed Lucas, with around 45% of this revenue coming from the wholesale market.
However Lucas warned that investment may not be as strategic as is required to continue storage market growth.
“I fear we are shooting after hydrogen [storage] and putting billions of pounds behind it, but this doesn’t create a level playing field for other storage like pumped hydro,” said Lucas.
The cost of an electrolyser is hydrogen’s biggest barrier, says Aurora
“The biggest barrier for green hydrogen is the cost of the electrolyser,” said Anise Ganbold, head of research at Aurora Energy Research.
According to Ganbold, the cost of an electrolyser continues to be a major barrier in the pricing of green hydrogen. This in turn is stopping many companies from adopting the clean energy carrier and supporting the green hydrogen ecosystem.
“If you could get the cost of the electrolyser down, that would take off half the levelised cost for green hydrogen,” Ganbold added.
Interestingly, the UK government’s policy towards hydrogen has seen them stand out amongst other competitors in the European market. Ganbold stated that, when it comes to policy, the UK was ranked in fourth place, only behind Germany, Denmark and the Netherlands – all of which are major players in the European hydrogen industry.
Touching on this point, Rajesh Kedia, senior banking adviser at the UK Infrastructure Bank, said: “We have good regulatory standards in the UK. But what will get hydrogen moving? I think we can do more on the demand side.”
This is a key point and one that is consistently being raised across the industry. Although many wish to scale hydrogen production, currently demand is holding back the wider adoption of hydrogen. If the UK were to increase the demand for hydrogen, then in turn companies would be mor inclined to scale hydrogen production.
Daniel Hulbert, contract manager – hydrogen at the Low Carbon Contracts Company echoed Kedia’s thoughts and said: “Policy is there or thereabouts, now it’s about the demand side.”