Has Covid-19 Affected Renewable Energy?
Published on: July 01, 2020 • Duration: 5 minutes
Roger Hirst and Wayne Bryan, Director of European Gas Research at Refinitiv, talk about how the UK is climbing up the global rankings of renewable energy, despite the economic slowdown.
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Welcome to the Corona Correction Series in association with Refinitiv. I'm your host, Roger Hirst. The UK has been beset with uncertainty since the Brexit vote in 2016. This uncertainty has led to a slowdown in foreign direct investment, and the government handling of the corona crisis has also been called into question with the economic slowdown being particularly severe and compounding the uncertainty. Despite this, one area where the UK has been moving up the global rankings is within renewable energy. I spoke to Wayne Bryan, Director of European Gas Research at Refinitiv, about the UK's adoption of these technologies, as well as the global trends within this space.
Now the UK itself has done very well in the RECAI index, which looks at the renewable attractiveness on a country basis. The UK started off at, I think they were in tenth about a year ago, we've now moved up to six. And this index really shows that the UK now is becoming an attractive place for investment, and it's also we're seeing solar panel prices have fallen, we are seeing a lot of offices, installations putting solar panels on their flat roofs because they know it can offset their bills. So this is going to feed in as we try and get close to 2050 and help us get closer to achieving net carbon. In another boost for the government's plan to be net zero by 2050, we saw last month Cleve Hill Solar Park, which is going to be the UK's largest solar park, given the go ahead by the government to begin construction. On around nine hundred acres of north east Kent coast, we'll see around 800,000 individual solar panels generating enough electricity to power around 91,000 homes. We're looking for production from this site to commence in around 2023. The UK capacity now is around 13 gig. I think we're looking by 2030 to get that to around 29 gig. And hopefully by 2050 around 36 to 40, but as you know with these projections, finance, etc, market things may change and we might see more or less, this is only really looking at potential capacity increases. So overall solar is really making waves and looking now on the Refinitiv app, we can see solar generation is starting to grow for the day and it's currently providing around 11 percent of our electricity at the moment. Now, that's quite low, we've been seeing around 30 per cent on a good sunny day. And today we've got no wind so we're relying on a bit more of the solar and that makes gas generation a lot stronger as well. But we've had these days in May where it was windy, where it was sunny and renewables on some days were contributing around 48 to 49 percent of our electricity. Now, in terms of the RECAI Index, what we typically have seen over the past few years is China were number one. Since October last year the US has actually overtaken them. And now US is number one in terms of attractiveness for renewable investment. I think one of the reasons for that is there was a federal tax incentive that expires this year, so anyone that actually produced or started to build an installation from 2016 onwards has to have it operational by the end of this year. So for that we've seen a lot more installations in the US which has helped bring them above China. The good thing about this is it seems that a lot of these countries are all making real solid commitments for renewables, and as we move towards 2030, 2050, hopefully renewables will play a massive part in power generation across the world and I think India's a great example of that. Their actually energy demand is growing, but what they're now realizing is the amount of sun they get, it's time to utilize that. So India as well is going to be a big player over the next few years, and not only just for solar but for wind, for biomass and all these other renewable energy sources, which is great news, really, really is good news for the environment moving forward.
Although the UK is perhaps better known for its wind and rain, there has been a concerted push into the solar space, which is paying dividends, increasing the country's energy diversity as it moves towards meeting its long-term goals. The recent decline and volatility in oil prices has seen the energy giant BP take a write down of 17 billion dollars and announced 10,000 job cuts. For many analysts, the dislocations within the energy sector that have arisen because of the corona crisis, may be the catalyst that spurs politicians into demanding that renewables play a bigger part in the production of energy, and the UK is setting itself up as a destination for investments in this space. We'll see you later with another update.
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