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“Speed and scale are key”: RenewableUK releases new manifesto for net zero electricity system

The CfD should be reformed to further support supply chain development, RenewableUK argued.

The CfD should be reformed to further support supply chain development, RenewableUK argued.

RenewableUK has published its new manifesto for a fully decarbonised electricity system by 2035, setting out key measures such as market and regulatory reforms needed to cut emissions.

The report urges the government to act in order to accelerate the pace and scale of decarbonisation dramatically, to reduce the UK’s exposure to the volatile international gas market by expanding domestic renewable generation and rapidly develop a green hydrogen industry.

“Renewables are playing a more important role in our energy system than ever before,” said RenewableUK’s chief executive Dan McGrail.

“The gas crisis and invasion of Ukraine have pushed up the cost of fossil fuels - and consumer bills - to record highs. We need to decarbonise at pace to build a home-grown clean power sector as the cornerstone of the Government’s Energy Security Strategy.”

The government raised the offshore wind target to 50GW by 2030 in the British Energy Security Strategy. Since then it has also appointed Tim Pick as the UK’s first Offshore Wind Champion to spearhead the work to accelerate new offshore wind projects around the UK

Roadmap to net zero: a manifesto for a fully decarbonised power system by 2035 includes wide-ranging recommendations, including a call for the Contracts for Difference (CfD) scheme to be reformed to attract more investment, in particular into supply chains.

While the CfD has been a success, RenewableUK notes, the current market set up may not be able to deliver the volume of projects needed to decarbonise by 2035. As global demand for offshore wind surges, there is increasing competition for investment as well as supply chains coming under more pressure. This, coupled with the maturing technology, means the trend of ever cheaper offshore wind prices may be at an end.

The trade association has therefore argued that an evolution of the CfD is needed, which can incentivise long-term capital investment into major projects, build supply chains and provide consumers with clean energy at low, stable prices.

Beyond the CfD, the government should consider innovative new policies to make the UK more attractive for investment in supply chains, argued RenewableUK. For example, it could create new wind enterprise zones where businesses can qualify for tax relief or credits as is happening in the US.

It should also work with industry to streamline the process of developing new offshore wind sites by bringing together skills, experience and capacity that is currently spread disparately across a range of bodies into a centralised regulatory authority for consenting and licensing.

A fundamental redesign of the way network infrastructure is planned and delivered is needed to allow more offshore wind to connect to the grid and to minimise the impact on local communities. RenwableUK’s manifesto recommends using the current Offshore Transmission Network Review to establish a long-term solution for grid infrastructure planning.

Finally to maximise deployment, the trade association is calling on the government to review research and development funding levels to ensure support is at a similar level to that available to other strategic sectors such as oil and gas, automotive and aerospace.

“Speed and scale are key: we must revolutionise the rate at which we build new projects onshore and offshore,” continued McGrail.

“Working closely with Government and local communities, we need to transform the way we plan and regulate our energy system, to make the UK the best place to invest in by reforming the CfD mechanism. This will help us to develop our supply chains and build up whole new industries in innovative technologies like floating wind technology and green hydrogen, which we can export worldwide. If we get this right, we can attract £200 billion in private investment and deliver over 120,000 jobs in wind energy alone over the course of this decade”.

The manifesto builds on a report from RenewableUK in April that highlighted five key steps to enable the UK to end its dependence on gas for electricity within five years.

RenewableUK’s “Roadmap to net zero: a manifesto for a fully decarbonised power system by 2035” report is available here.

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