Table of Contents
Overview
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- What you need to know
- Covered in this Report
Executive Summary
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- The market
- Renewables account for a third of UK electricity generation in 2018
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- Figure 1: UK renewable penetration of electricity generation, 2014-18
- UK renewable energy installed capacity dominated by wind
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- Figure 2: UK renewable energy market shares, by installed capacity, 2014 and 2019
- UK aims to deliver 30GW of offshore wind capacity by 2030
- Onshore wind not expected to grow by much without changes to planning and subsidy policy
- Subsidy-free, large-scale, ground-mounted solar PV market starting to take off
- Renewable energy generation to show continued growth over the next 10 years
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- Figure 3: Forecast renewable electricity generation, 2018-35
- Companies and brands
- UK offshore wind sector still dominated by utility-style owners
- Lightsource builds significant PPA-backed solar pipeline
- What we think
Issues and Insights
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- Continued government support, increased competition and technological innovation help to drive down offshore wind prices ahead of expectations
- The facts
- The implications
- Investors are starting to see opportunities in subsidy-free projects, with solar PV at forefront of subsidy-free deployment
- The facts
- The implications
The Market – What You Need to Know
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- Renewables account for a third of UK electricity generation in 2018
- Clean energy sources set to outstrip fossil fuel for the first time in 2019
- Offshore wind prices are falling ahead of market expectations
- Subsidy-free, large-scale, ground-mounted solar PV market starting to take off
- 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, 2014-18
- Figure 5: Proportional importance of fuel source in UK electricity generation, 2014 and 2018
- UK renewables generation
- Renewables account for a third of UK electricity generation in 2018
- Clean energy sources set to outstrip fossil fuel for the first time in 2019
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- Figure 6: Renewable electricity generation in the UK, 2014-18
- Figure 7: UK renewable energy market shares, by installed capacity, 2014 and 2019
Wind Generation
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- Overview
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- Figure 8: UK onshore and offshore wind energy generation capacity, MW and %, 2014 and 2019
- Onshore Wind
- Onshore wind deployment stalls in 2018 due to subsidy removal
- Onshore wind not expected to grow by much without changes to planning and subsidy policy
- Government urged to support development of new onshore wind
- Offshore Wind
- 38 offshore wind farms operational in UK
- UK aims to deliver 30GW of offshore wind capacity by 2030
- The UK is the world leader in offshore wind
- Offshore wind prices are plunging ahead of expectations
- Bigger turbine sizes help slash costs of wind farms
- Wind generation capacity and generation
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- Figure 9: UK wind energy capacity, 2014-19
- Figure 10: UK wind energy generation, 2014-19
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- Figure 11: UK wind generation development pipeline, as of June 2019
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
- Private backers believe Swansea Bay tidal lagoon can be built without subsidies through PPAs
- Just 22MW of wave energy capacity installed to date
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- Figure 12: UK wave energy capacity and generation, 2014-19
- Figure 13: UK wave and tidal capacity in development pipeline, as of June 2019
Photovoltaic Generation
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- Ground-mounted sector moves into post-subsidy phase
- Emergence of PPAs presents growth opportunities for ground-mounted solar PV installations
- 1,054 solar farms (over 1MW) operational as of June 2019
- Solar PV deployment drops by 69% to just 291MW in 2018
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- Figure 14: Photovoltaic installations in the UK, 2013-19
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- Figure 15: Photovoltaic installations in the UK, 2011-18
- 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, 2014-19
- Figure 17: Photovoltaic installed capacity in the UK, by size, as of June 2019
- Looking ahead solar PV deployment to be initially driven by ground-mounted installations
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- Figure 18: UK PV development pipeline, as of June 2019
Hydro Generation
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- Figure 19: UK hydro energy capacity, 2014-19
- Figure 20: UK hydroelectricity generation, 2013-18
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- Figure 21: UK hydroelectricity development pipeline, as of June 2019
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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, 2015-19
- Figure 23: UK bioenergy and waste generation energy capacity, as of end of March 2019
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- Figure 24: UK bioenergy generation, 2015-19
- Figure 25: UK bioenergy development pipeline, as of June 2019
Market Forecast
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- Decarbonisation of UK energy system
- Government 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
- Renewables capacity development pipeline
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- Figure 26: Renewable energy projects in pipeline, by technology, as of March 2019
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- Figure 27: Forecast renewable electricity generation, 2018-35
Future Energy Mix and Demand
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- Future energy demand under National Grid’s Future Energy Scenarios
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- Figure 28: Annual power demand in Great Britain, 2018-50
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- Figure 29: Annual power demand in Great Britain, 2018-50
- Future potential energy mix
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- Figure 30: Forecast power generation installed capacity under “Community Renewables” scenario, by source, 2018-50
- Figure 31: Future potential energy mix in “Community Renewables” scenario in 2040
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- Figure 32: Forecast power generation installed capacity under “Two Degrees” scenario, by source, 2018-50
- Figure 33: Future potential energy mix in “Two Degrees” scenario in 2040
- Figure 34: Forecast power generation installed capacity under “Steady Progression” scenario, by source, 2018-50
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- Figure 35: Future potential energy mix in “Steady Progression” scenario in 2040
- Figure 36: Forecast power generation installed capacity under “Consumer Evolution” scenario, by source, 2018-50
- Figure 37: Future potential energy mix in “Consumer Evolution” scenario in 2040
Energy Policy and Legislative Environment
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- Government commitment to reduce carbon emissions
- UK makes good progress in reducing CO2 emissions to date, but on track to miss targets between 2023 and 2032
- Policies to decarbonise electricity
- Renewables Obligation
- Feed-in Tariffs
- Carbon Price Floor
- Contracts for Difference
- Capacity Market
- The Renewable Heat Incentive
Companies and Brands – What You Need to Know
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- UK offshore wind sector still dominated by utility-style owners
- BP invests in Lightsource to drive global solar expansion
- Lightsource builds significant PPA-backed solar pipeline
- Renewables at core of SSE Group’s business strategy
Industry Structure
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- Overview
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- Figure 38: UK turnover of renewable energy industry, 2014-17
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- Figure 39: Employment in key renewable energy sectors, 2015-17
- Abrupt government policy changes result in many companies exiting UK solar PV sector
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- Figure 40: Employment and number of companies active across UK solar PV supply chain, 2012-17
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- Figure 41: UK solar PV sector turnover, 2012-17
- Offshore wind industry continues to expand at pace
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- Figure 42: UK offshore wind sector turnover, 2012-17
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- Figure 43: Employment and number of companies active across UK offshore wind supply chain, 2012-17
- Onshore wind industry set to be restricted in the short term due to lack of government-backed routes to market
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- Figure 44: UK onshore wind sector turnover, 2012-17
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- Figure 45: Employment and number of companies active across UK onshore wind supply chain, 2012-17
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 46: Financial analysis of Biogen (UK), 2013-18
- First Hydro Company
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- Figure 47: Financial analysis of First Hydro Company, 2014-18
- Lightsource BP Renewable Energy Investment
- BP invests in Lightsource to drive global expansion
- Other recent partnerships
- Operational solar assets
- Operations and Maintenance
- Construction assets and pipeline
- Strategy
- Financial performance
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- Figure 48: Lightsource BP Renewable Energy Investments, 2016-19
- ScottishPower Renewables
- Financial performance
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- Figure 49: Financial analysis of ScottishPower Renewables, 2014-18
- SSE
- SSE and Npower scrap merger plans for their household supply businesses
- Renewables at core of SSE Group’s business strategy
- Financial performance
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- Figure 50: Financial analysis of SSE, 2015-19
- Figure 51: SSE revenue segmental analysis, 2019
- Vattenfall Wind Power
- Company Outlook and Strategy
- Financial performance
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- Figure 52: Financial analysis of Vattenfall Wind Power, 2014-18
- Vestas-Celtic Wind Technology
- Recent company activity
- Financial performance
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- Figure 53: 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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