Renewables are on course to overtake fossil fuels for the first time as the UK’s primary electricity source as early as 2020, according to the latest market forecast from EnAppSys.
If current trends continue, the market analyst predicts growing renewable power sources such as wind and solar will generate 121.3TWh or electricity over the calendar year of 2020, pushing ahead of declining coal and gas-fired power sources with a forecasted 105.6TWh of generation.
It would mean that, for the first time, more of the UK’s electricity would be provided by renewables than any other aggregated power source, including fossil fuels, nuclear, and interconnectors, according to yesterday’s report.
The forecast assumes current trends of declining fossil fuel generation and rising renewables generation continue at the same annual rate. In 2018, coal and gas fired power stations produced a combined 130.9TWh, a 6.7 per cent fall from the previous year’s 140.3TWh, the report states. Meanwhile, renewable sources delivered 95.9TWh last year, rising 15.2 per cent from 2017 – a strong performance bolstered by the UK’s increasing offshore wind capacity.
Overall, renewables accounted for a third of all power generation in the UK, with wind providing 17 per cent, solar four per cent, and biomass 11 per cent, analysis by Carbon Brief found earlier this month. Nuclear also accounted for a fifth of UK generation, taking low carbon power’s share of the mix to a record high of 53 per cent. Gas and coal, meanwhile, provided 39 per cent and five per cent respectively.
Paul Verrill, director of EnAppSys, said the rise of renewables, particularly offshore wind, was driving major changes in the UK energy market, with conventional power generators having to adapt to lower levels of activity and find ways of offsetting any lost income as a result.
He said he expected wind and the wider renewables sector to continue squeezing levels of output from fossil fuel generators in the coming years. “With the moratorium on onshore wind and reductions in capital cost of offshore wind farms, it is likely that more of these offshore projects will come on stream in future years, which will drive even higher levels of renewable output,” he said. “New electrical transmissions infrastructure that came on line in 2018 will increase further the contribution of renewable energy to the UK fuel mix but constraints still persist despite the investments.”
Verrill also pointed to further ongoing challenges for fossil fuel generation in light of the suspension of the Capacity Market mechanism late last year, which was aimed at ensuring back up baseload power from conventional generators on days of low renewables generation and high demand.
“Against this backdrop, the margins for thermal power generation fell to 2014 price levels as the impact of reduced demand, increased levels of wind generation and very competitive market dynamics placed downward pressure on profits,” he explained. “This dynamic should settle down over time, but with rising competition in the market driven by the growth of renewables it will become necessary to reinstate the Capacity Mechanism payments or some other alternative to fill the gap created by the lost income. If this is not the case, it’s likely that plant closures will be necessary to remove oversupply from the system and this will lead to decreased security of supply.”