Table of Contents
Executive Summary
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- Impact of COVID-19 on renewable energy
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- Figure 1: Short, medium and long-term impact of COVID-19 on renewable energy, 5 November 2020
- The market
- Renewables’ share of UK electricity generation reaches a record 46% in first half of 2020
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- Figure 2: UK renewable penetration of electricity generation, 2015-19
- UK renewable energy installed capacity dominated by wind
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- Figure 3: UK renewable energy market shares, by installed capacity, 2015 and 2020
- UK’s offshore wind capacity target raised to 40GW by 2030
- Onshore wind sector expected to be revived by renewed subsidy support
- Solar PV market expected to be driven by large-scale installations over the next few years
- Companies and brands
- Offshore wind industry continues to expand at pace
- BP invests in Lightsource to drive global expansion
Issues and Insights
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- Government’s new ambitious targets for offshore wind deployment are set to further drive down costs and boost investor confidence
- Solar PV market expected to be driven by large-scale installations over the next few years
The Market – Key Takeaways
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- COVID-19 accelerates shift to renewables generation
- Offshore wind costs are plunging ahead of expectations
- UK’s offshore wind capacity target raised to 40GW by 2030
- Solar PV market expected to be driven by large-scale installations over the next few years
- Energy storage to play key role in transition to clean electricity supply system
UK Electricity Generation
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- Overview
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- Figure 4: Analysis of electricity generation in the UK, by type of fuel used, 2015-19
- Figure 5: Proportional importance of fuel source in UK electricity generation, 2015 and 2019
- UK renewables generation
- Renewables’ share of UK electricity generation reaches a record 46% in first half of 2020
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- Figure 6: Renewable electricity generation in the UK, 2016-20
- Figure 7: UK renewable energy market shares, by installed capacity, 2015 and 2020
Wind Generation
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- Overview
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- Figure 8: UK onshore and offshore wind energy generation capacity, MW and %, 2015 and 2020
- Onshore Wind
- Onshore wind is one of the cheapest forms of electricity generation
- Onshore wind deployment stalls in 2018 and 2019 due to exclusion from CfD auctions
- Government proposes to re-include onshore wind in next CfD auction
- Offshore Wind
- 39 offshore wind farms operational in UK
- UK’s offshore wind capacity target raised to 40GW by 2030
- The UK is the world leader in offshore wind
- Offshore wind prices are plunging ahead of expectations
- Offshore wind farms and turbine sizes continue to get bigger
- Wind generation capacity and generation
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- Figure 9: UK wind energy capacity, 2016-20
- Figure 10: UK wind energy generation, 2016-20
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- Figure 11: UK wind generation development pipeline, as of June 2020
Shoreline Wave/Tidal Generation
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- The Crown Estate licenses wave and tidal sites to help unlock opportunities
- Hendry review concludes that tidal lagoons can play a cost-effective role in the UK’s energy mix…
- …but government rejects plan for £1.3 billion Swansea Bay tidal lagoon
- Just 22MW of wave energy capacity installed to date
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- Figure 12: UK wave energy capacity and generation, 2016-20
- Figure 13: UK tidal barrage and tidal stream capacity in development pipeline, as of June 2020
Photovoltaic Generation
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- 13.5GW of solar PV installed in UK, according to official data…
- …but government statistics fail to accurately capture subsidy-free schemes
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- Figure 14: Photovoltaic installations in the UK, 2014-20
- Figure 15: Photovoltaic installations in the UK, 2012-19
- Subsidy-free, large-scale solar PV market starting to take off
- Emergence of PPAs presents growth opportunities for ground-mounted solar PV installations
- 1,081 solar farms (over 1MW) operational as of July 2020
- Large-scale installations of 5MW and above account for 45% of total installed solar PV capacity
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- Figure 16: Photovoltaic installations in the UK, by capacity of installation, 2015-20
- Figure 17: Photovoltaic installed capacity in the UK, by size, as of July 2020
- Solar PV market expected to be driven by large-scale installations over the next few years
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- Figure 18: UK PV development pipeline, as of June 2020
Hydro Generation
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- Figure 19: UK hydro energy capacity, 2016-20
- Figure 20: UK hydroelectricity generation, 2014-19
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- Figure 21: UK hydroelectricity development pipeline, as of June 2020
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Bioenergy Electricity Generation
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- Recent government policy changes affecting the bioenergy sector
- Clean Growth Strategy highlights bioenergy’s potential
- Trade association calls on government to commit to 16% of electricity from bioenergy by 2032
- Landfill Gas
- Sewage Sludge Digestion
- Energy from Waste
- Advanced conversion technology
- Animal biomass
- Anaerobic digestion
- Co-firing and biomass
- Bioenergy installed capacity and generation
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- Figure 22: UK bioenergy installed capacity, 2016-20
- Figure 23: UK bioenergy and waste generation energy capacity, as of end of June 2020
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- Figure 24: UK bioenergy generation, 2016-20
- Figure 25: UK bioenergy development pipeline, as of June 2020
The Impact of COVID-19 on the Renewable Energy Sector
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- Short, medium and long-term impact of COVID-19 on the renewable energy sector
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- Figure 26: Short, medium and long-term impact of COVID-19 on renewable energy, 5 November 2020
- Lockdown
- Re-emergence
- Recovery
Market Forecast
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- Decarbonisation of UK energy system
- Ambition to achieve net-zero emissions by 2050 will push up electricity demand
- Growth in decentralised and renewable electricity generation will increase the complexity of operating a secure and cost-effective energy system
- Investors are starting to see opportunities in subsidy-free projects, storage projects and newer technologies
- Energy storage to play key role in transition to clean electricity supply system
- BEIS and Ofgem unveil plans for major upgrade of the UK’s energy systems, including the removal of barriers to storage
- Government’s £246 million battery investment strategy
- Renewables capacity development pipeline
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- Figure 27: Renewable energy projects in pipeline, by technology, as of June 2020
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- Figure 28: Forecast renewable electricity generation, 2019-40
Future Energy Mix and Demand
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- Future energy demand under National Grid’s Future Energy Scenarios
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- Figure 29: Annual power demand in Great Britain, 2019-50
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- Figure 30: Annual power demand in Great Britain, 2019-50
- Future potential energy mix
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- Figure 31: Projected installed electricity generation capacity (incl. storage and interconnectors), by scenario, 2019, 2030 and 2050
Energy Policy and Legislative Environment
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- The Climate Change Act 2008
- UK commits to 2050 net-zero target
- UK makes good process in reducing CO2 emissions to date, but steeper reduction required to progress towards net zero
- Government sets out commitments to ensure offshore wind will power every home by 2030
- Support mechanisms and policies to decarbonise electricity
- Renewables Obligation
- Feed-in Tariffs
- Carbon Price Floor
- Contracts for Difference
- Capacity Market
- The Renewable Heat Incentive
Companies and Brands – Key Takeaways
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- Offshore wind industry continues to expand at pace
- Onshore wind industry expected to be revived by renewed subsidy support
- BP invests in Lightsource to drive global expansion
Industry Structure
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- Overview
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- Figure 32: UK turnover of renewable energy industry, 2014-18
- Solar PV sector sees rapid decrease in employment levels and turnover
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- Figure 33: Employment and number of companies active across UK solar PV supply chain, 2013-18
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- Figure 34: UK solar PV sector turnover, 2013-18
- Offshore wind industry continues to expand at pace
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- Figure 35: UK offshore wind sector turnover, 2014-18
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- Figure 36: Employment and number of companies active across UK offshore wind supply chain, 2013-18
- Onshore wind industry expected to be revived by renewed subsidy support
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- Figure 37: UK onshore wind sector turnover, 2014-18
- Figure 38: Employment and number of companies active across UK onshore wind supply chain, 2013-18
Company Profiles
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- Biogen (UK)
- Biogen (UK) purchased by Ancala Bioenergy in 2017
- Biogen acquires Tamar Energy, creating one of the largest independent AD operators in the UK
- Financial performance
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- Figure 39: Financial analysis of Biogen (UK), 2013-19
- First Hydro Company
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- Figure 40: Financial analysis of First Hydro Company, 2015-19
- Lightsource BP Renewable Energy Investment
- BP invests in Lightsource to drive global expansion
- Lightsource Labs – the company’s in-house digital innovations arm
- Strategy
- Financial performance
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- Figure 41: Financial analysis of Lightsource BP Renewable Energy Investment, 2016-19
- ScottishPower Renewables
- Financial performance
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- Figure 42: Financial analysis of ScottishPower Renewables, 2015-19
- SSE
- SSE sells retail unit to OVO Energy
- Renewables at core of SSE Group’s business strategy
- Financial performance
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- Figure 43: Financial analysis of SSE, 2016-20
- Figure 44: SSE revenue segmental analysis, 2019
- Vattenfall Wind Power
- Company outlook and strategy
- Financial performance
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- Figure 45: Financial analysis of Vattenfall Wind Power, 2015-19
- Vestas-Celtic Wind Technology
- Financial performance
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- Figure 46: Financial analysis of Vestas-Celtic Wind Technology, 2014-18
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Methodology
Further Sources and Contacts
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- Trade associations
- Trade magazines
- Trade events
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