In the first half of 2020, renewables’ share of UK power generation reached a record 46%. While overall electricity demand was lower in H1 2020 due to the effects of COVID-19, renewables generation increased and non-renewable generation decreased during this period. The electricity mix has shifted towards renewable sources due to depressed electricity demand, low operating costs and seasonal effects.

Some renewable energy projects were delayed by COVID-19. For example, construction of new wind farms fell short on what the sector expected in H1 2020, with COVID-19 disrupting supply chains, production and assembly.

Despite the impact of COVID-19 on new build activity, the renewables sector is generally resilient. Industry players continue to show robust commitments to invest in renewables as costs decline and on the back of some positive policy announcements as part of economic recovery plans.

The renewable energy sector could also play a central role in driving the post-COVID-19 economic recovery. The CCC, the government’s official advisors on climate change, proposes the following areas for post-COVID-19 investment: offshore wind, carbon capture and storage (CCS), transition of the oil and gas industry to clean energy production as well as close-to-market green technologies, such as floating offshore wind. This requires robust government support and the right policy framework to unlock further private investment in a flexible, low-carbon energy system. So far the government has committed to new ambitious targets and investment into offshore wind power as part of a green recovery, which will help build investor confidence.

• The impact of COVID-19 on the renewable energy sector.

• Future potential energy mix and demand.

• The UK’s progress to move to a cleaner energy system.

• Key developments in the renewables sector.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks.

The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 were amended on 15 June allowing the reopening of all non-essential stores in England, as well as the mandatory use of face coverings on public transport. Pubs, restaurants, hotels and hairdressers were able to reopen on 4 July, with many beauty businesses following on 13 July.

On 14 October 2020, following a rising ‘second wave’ of infections, the government introduced a three-tier system of restrictions across England, with Medium, High and Very High alert levels. Those in the ‘Very High’ tier were advised to avoid travelling outside of this area. On 5 November 2020, these tiers were replaced with an England-wide lockdown, initially in place until 2 December. People who can work from home are advised to do so during the four-week lockdown, but industries such as construction and manufacturing are allowed to continue to operate. Schools, colleges and universities remain open.

As of 1 November Scotland had its own five-tier system of restrictions but no national lockdown had been introduced, whilst Wales had introduced a short ‘firebreak’ lockdown from 23 October-9 November.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The terms of reference for this Report concern the UK renewable energy market. This covers:

• Biogas from anaerobic digestion

• Biomass

• Hydroelectric

• Tidal power

• Wind power

• PV cells

• Landfill gas

• Sewage gas

• Wave power.

Some further terms are used in this Report:

One billion refers to 1,000 million.

Some numbers in tables may not add due to rounding.