2020 has thrown challenges at the energy sector in the UK that no one could have predicted, with the COVID-19 pandemic and subsequent lockdown turning everyone's lives upside down.
But throughout the turbulent year, the energy transition has continued to move forwards, with lessons learnt from the unprecedented changes and records broken along the way.
While there were myriad challenges no one could have divined, the energy sector has continued to push on to a decarbonised and decentralised system, proving many of our prophetic energy experts right.
At the end of 2019, Current± asked a host of energy experts what their predictions for the coming year were. Now, we look back to see who was on the money, and who fell a little short.
Flexibility enters the limelight
One of the aspect the COVID-19 pandemic has thrown into particular light is the need for greater flexibility, to provide security as the share of renewables on the grid continues to grow. As demand dropped and sunny weather drove up solar generation, National Grid ESO launched new tools including the Downward Flexibility Management service to manage the system.
Flexitricity’s Alastair Martin suggested last year that National Grid will develop “a real taste for using decentralised energy assets in the Balancing Mechanism.” As an expanding range of commercial customers joined the BM thanks to wider access it would create an “an ad-hoc market, perfect for ad-hoc resources.”
An increasing number of parties have indeed participated in the BM, including Flexitricity itself which became the first Virtual Lead Party to trade in it in April. Already, Elexon is consulting on changes that would allow individual asset meters to be used for settlement purposes, widening the BM once again.
Whilst smaller assets are playing an increasingly large role in the flexibility, there are some technologies that are yet to realise their full potential. Kaluza’s Valts Grintals predicted that vehicle-to-grid would turn homes into “mini green power stations” – one that has undoubtedly been hampered by COVID-19. While we have seen a number of interesting new V2G projects such as WPD’s Electric Nation, it is yet to be widespread enough to create a meaningful source of flexibility.
Prices plunge as negative pricing becomes the norm
Invinity's Ed Porter was spot on with his prediction that we would see more negative pricing, with instances of power prices falling below zero more than doubling across Europe. Great Britain alone saw 80 hours of negative pricing in just the first nine months of 2020.
Additionally, his suggestion that there would be a growing market for energy storage on the back of it has been supported by a number of projects coming online, including InterGen announcing the largest storage project in the UK ever this week.
This has been aided by the removal of planning regime barriers, which previously limited storage to 50MW in England, proving Madeleine Greenhalgh from Energy Storage Network right in her suggestion we’d see more battery storage will coming through once these were removed.
The energy storage sector continuing to mature was also predicted by Jan Andersson from Wartsila, who welcomed the news that National Grid ESO was expanding its frequency response mechanism. Since that point, it has launched its Dynamic Containment service, which offers prices as much as three times as high as other mechanisms, and has help secure incredibly fast responses from battery storage operated by the like of Arenko and Flexitricity.
Renewable generation continues to soar
The penetration of renewables in the UK has grown substantially in 2002, supporting Low Carbon’s Juan Martin Alfonso’s prediction that the country’s large-scale subsidy-free solar era would begin. Solar projects from Hive Energy, Aura Power, Elgin Energy amongst others have proven him right, with the subsidy-free market in the UK surely coming of age. This has allowed a pipeline of new large-scale solar sites in the UK to grow to more than 9GW, with more than 600MW added during June 2020 alone
Alfonso also suggested that community ownership for operational renewable would become a real option at scale, a suggested supported by a number of other experts’ predictions. The community energy sector has continued to develop apace in 2020, with many pointing to the local benefits in particular in light of the pandemic. This allowed Community Energy England to sets its sights on a pipeline of 5,270MW of community energy by 2030.
Beyond solar it has been a banner year for offshore wind as well, in particular bolstered by Prime Minister Boris Johnson’s commitment to 40GW of offshore wind by 2030.
Small suppliers continue to struggle
Solar Media’s very own editor-in-chief Liam Stoker was not far off the money with his prediction that 2020 would see even more supply market carnage. Robin Hood Energy sold its customer base to Centrica, and Bristol Energy’s customers were acquired by Together Energy.
While it is not quite the dramatic decline that could have been expected after a total of 14 retailers went bust in 2019, suppliers have been able to access the government’s furlough scheme and have also been supported by low power prices. The mutualisation of the RO has nonetheless been triggered for the third year in a row, with Nabuh Energy Limited, Robin Hood Energy Limited and Symbio Energy issued with final orders.
The best of the rest – heating and EVs
In terms of the decarbonisation of heat, JoJo Hubbard’s point that there will be advanced conversations about bringing subsidies into the space has proved accurate with the introduction of the Green Homes Grants.
Meanwhile many commented on the growth of EVs, including Pod Point’s Erik Fairbairn rather accurately suggesting the fleet sector will take off. The likes of Europcar, SSE, Mitie and Openreach have announced fleet electrication targets, driving on the sector as they commit to upgrading and installing charging infrastructure to support this.
The Current± Predicts series will return for 2021, with a host of energy experts already lined-up to take part. Want to put your crystal ball to the test? Email three predictions with some context to firstname.lastname@example.org