UK risks missing decarbonisation targets, says report

A new report from the Association for Renewable Energy and Clean Technology (REA) has found that the UK risks missing its decarbonisation targets without urgent action to increase grid flexibility.

In a report, the REA has assessed the readiness of the UK’s energy market to support the transition to net zero, comparing it with 11 other European countries. The Energy Transition Readiness Index 2021 (ETRI 2021) finds that the UK is well behind Finland, Norway, and Sweden in making changes that are vital to increase the flexibility of the grid as more variable generation comes online and renewables generate a bigger proportion of the country’s power supply.

It concludes that unless urgent action is taken, billions more will be needed to balance the system, and progress towards net zero will be slowed, because fossil fuel generators will be paid to fire up when demand outstrips supply, and renewables generators will be paid to turn off when supply is greater than demand. This is what happens at present in the UK.

It makes a series of policy recommendations such as coordinating with suppliers to encourage greater uptake of ‘time of use tariffs’; simplifying the regulations for energy storage; and setting up a national market where participants can ‘buy flexibility'.

“This new analysis puts the spotlight on the consequences of not making small but vitally important adjustments to how the UK’s energy system, including its grid network, operates,” said Dr Nina Skorupska CBE, Chief Executive of the Association for Renewable Energy and Clean Technology (REA).

“The UK has taken positive steps forward in looking to decarbonise electricity generation and the government rightly remains ambitious to reduce emissions to zero. However, unless the grid keeps pace and is re-framed to become more responsive, it could cost the UK hundreds of millions of pounds a year more to transition to renewables, with the burden likely to fall on households and businesses. It will almost certainly mean that the UK will miss its net zero targets too.”

Speaking ahead of the report’s publication, Eaton’s UK Managing Director, Siobahn Meikle, said: “The UK government has a real opportunity here to demonstrate leadership in decarbonising our economy. The tools exist to make the grid fit for the 21st century, but to unlock the private investment needed, businesses large and small need the right regulatory framework created – one that is simple to understand and easy to accommodate into business as usual. For instance, we have the technology for businesses to store unused energy and feed it back to the grid, but at the moment a complex patchwork of regulations means that energy storage is effectively ‘double charged’ – both for the electricity used, and dispatched – which makes it less attractive to investors. Ironing out this type of anomaly can make a huge difference to the pace of decarbonisation in the UK.”

The report compares the readiness of 12 European countries, ranking them on a scale of 1-5, with 1 being the lowest and 5 being the highest. Finland, Norway and Sweden were all rated 5, while the UK was rated 3 because decisions are regularly delayed or changed and there is weak alignment across government, which means that policy goals are uncertain.