On Wednesday 7 June 2017, renewable energy sources achieved a milestone event; together they powered more electricity in the UK than gas and coal combined – producing more than two-thirds of the nation’s electricity.
The combined sun and wind that day created a perfect environment for renewables. By midday, National Grid announced that power sources including wind, solar, hydro and wood pellet burning were supplying 50.7% of UK energy. By 2pm, with the addition of nuclear, low carbon sources were fuelling 72.1% of our electricity.
The EU has managed to reduce the greenhouse gas reliance of its economy significantly: between 1990 and 2015 its emissions decreased by 22% while its combined GDP increased by 50%, showing considerable decoupling of its economic growth from greenhouse gas emissions. Last year, the UK announced its own ambitious targets to reduce carbon emissions by 57% by 2030, compared to 1990 levels.
The nation’s ability to prove it can reduce the carbon intensity of producing power below 100g of CO2 per kilowatt hour – as happened recently – will prove hugely encouraging; according to the government’s climate advisers, this figure must be the norm by 2030. In reaching this level – if only temporarily – renewable energy production has displayed a significant achievement not only in terms of environmental objectives, but also regarding the economic potential of this growing sector.
On the Tuesday of that same week, a tenth of the UK’s power was generated by offshore wind farms. This relative newcomer to the country’s energy scene has been gaining attention due to its efficacy and low costs – which have fallen faster than anticipated. Notably, that day, the high wind output pushed down the wholesale price, which created negative power prices.
Emma Pinchbeck, head of renewable energy trade body RenewableUK said of the achievement:
“National Grid is confirming that low-carbon sources are generating 70pc of our electricity - with wind power the star amongst these sources.” She continued: “[the] government should be proud of what the wind sector has achieved in the UK, and work with the industry to ensure that these record-breaking days for wind energy generation become our new norm.”
While renewable energy offers significant economic opportunities, questions remain as to how the economy will manage the move away from traditional energy sources. Germany’s green energy boom has led to lower power prices which, although positive for consumers, has wiped billions off share prices of large energy companies such as E.ON and RWE.
While some are concerned the same could happen in the UK, John Feddersen, chief executive of Aurora Energy Research, believes we won’t suffer the same fate due to the UK’s Capacity Market – which enables the UK to make a more sustainable transition to renewable energy. Effectively, the Capacity Market is an insurance against future blackouts during paucities of renewable energy output, and has provided conventional energy operators with an area in which to make money. One such energy scheme will pay these power station owners £378 million in subsidies over winter to remain on standby and ensure energy levels meet demand.
With careful economic planning, the country should be able to capitalise on new economic opportunities. Which means, following a year of significant energy sector events, the UK can wholeheartedly embrace the fact it’s already generated more coal-free hours in 2017 than during the whole of 2016. With electric car sales also on the rise, green could well be the key to a healthy economy.