An expert group has concluded that the biggest challenges this decade to decarbonisation is the mobilisation of the huge quantities of investment required to scale low-carbon generation, storage and networks.
Detailed within a Net Zero Electricity Market Design report for the Climate Change Committee (CCC), the group has disclosed a number of stumbling blocks currently hindering the development of the UK’s net zero network and challenges associated with decarbonisation.
One of the biggest challenges currently is investment in low-carbon generation, storage and networks.
The challenges associated with energy storage had been referenced at Solar Media’s UK Solar Summit. The current energy support mechanisms – such as the Contracts for Difference (CfD) scheme – are designed to support energy generation, and therefore do little to incentivise the retrofitting of battery storage and co-location, a major stumbling block for the market.
“Current energy support systems are centred around power generation. If you are a power generation company on these support mechanisms, why would you think about doing energy storage?” said Mark Sommerfield, director of policy at REA (The Association For Renewable Energy and Clean Technology) at the UK Solar Summit.
Stacking value and optimisation are a crucial component in maintaining attractive investment opportunities in battery energy storage, according to a GridBeyond and Thrive Renewables white paper released in August.
An increase in battery supplier investment could overcrowd the market leading to less interest. Because of this, optimisation and stacking value must be utilised to maintain investor attraction, said the paper.
Alongside this, low-carbon energy generation is considered a stumbling block as well as the upgrading of the energy network to facilitate growth.
The National Grid ESO is attempting to rectify this issue by tackling connection management via a new initiative. The new approach will aim to remove stalled projects from the transmission entry capacity (TEC) register to allow new projects to be connected to the national electricity transmission network quicker.
In the 2030s the biggest challenges will be the efficient operation of low-carbon electricity system, with a more dynamic demand side with the integration and scaling of electric vehicle (EVs).
Alongside these stumbling blocks, the group also disclosed that a revolutionary reform of current Contracts for Difference (CfDs), combined with a degree of location-based pricing, and associated changes to the capacity market could address a number of these challenges identified.
The CfD auction has been regarded a success with the fourth Allocation Round (AR4) seeing 93 individual projects across Britain win 99 contracts, with a total capacity of almost 11GW of clean energy supported.
This has contributed to the growth in the UK’s renewable pipeline.
One of the primary areas it could improve is investor confidence – a primary area to address in order to rapidly scale investment in the energy network.