Government has a “significant” role in providing routes to market for new renewable power projects, according to speakers at Solar Media’s Renewable Energy Revenues Summit in London this morning.
Sulaiman Ilyas-Jarret, head of policy and strategy for renewable delivery at the UK Department for Energy Security and Net Zero led the discussion at the event’s first panel, and suggested that clarity and coherence from a government is an integral part to installing renewable capacity on the scale necessary to meet the world’s decarbonisation targets.
Unlock unlimited access for 12 whole months of distinctive global analysis
Photovoltaics International is now included.
- Regular insight and analysis of the industry’s biggest developments
- In-depth interviews with the industry’s leading figures
- Unlimited digital access to the PV Tech Power journal catalogue
- Unlimited digital access to the Photovoltaics International journal catalogue
- Access to more than 1,000 technical papers
- Discounts on Solar Media’s portfolio of events, in-person and virtual
Earlier this year, Bloomberg New Energy Finance reported that the world could add as much as 665GW of new solar capacity in 2024 alone, and Ilyas-Jarret drew attention to the range of policy approaches adopted by governments as they look to build towards these targets.
“[We aim to give] some of that forward vision about where we want to get to,” said Ilyas-Jarret. “Targets are useful, as they help to focus minds. The approach that we take in the UK very much focuses on that certainty … there are other systems, like the Inflation Reduction Act (IRA) in the US, that are little more generous but [offer] less certainty.”
The speakers also discussed some of the challenges associated with meeting the scale of these targets, with Francis Mann, senior government affairs manager for Northern Europe at Lightsource bp, describing the UK power planning infrastructure as “on its knees,” as regulators struggle to keep up with the volume of new renewable power permits being applied for.
Indeed, uncertainty around grid availability is a growing concern in the European renewables space in particular, with Europe’s grids set to lack around 200GW of solar capacity by the end of the decade. Jemma Couchman, a partner at Cameron Barney suggested that this uncertainty, more broadly, could discourage future renewable investments, as uncertainty can lead to a perception of renewables as a riskier investment.
“It can be quite frustrating that an estimated date and cost isn’t really kept to,” said Couchman. “It can produce quite a few tricky conversations with lenders, to make sure we can get those cases banked.”
However, there are opportunities in this uncertainty; Mann suggested that the competitive nature of the bidding process, itself an encouraging initiative governments can engage in, can push project managers to present a more negative state of affairs than may be accurate.
“It’s worth saying sometimes, especially when you ask the government for things, you paint a falsely negative picture of things that are going on,” said Mann. “[In the] UK, solar, batteries and offshore wind are huge success stories. A lot of the issues that we’re all facing … are a product of the success of the system. The bottlenecks are largely caused by the volume of projects, rather than an intended blocker.”
Lyudmil Banev, a director of project finance and infrastructure at NatWest, agreed, calling these bottlenecks an “opportunity” for greater investment into the renewables space.
“It’s worth seeing these [bottlenecks] as an opportunity; being able to put forward [grid] as an issue that’s being resolved can drive a lot of capital flowing into UK renewables. I do think the infrastructure and market design in the UK can be helpful, in that regard.
“Very rarely does anyone, expect for power forecasters, link [power demand] into where is electricity going to be used and how,” continued Banev, suggesting that there could also be opportunities for reform in grid infrastructure more broadly to attract the kind of private investment necessary to scale up renewable deployments.
“There’s a real opportunity for guidance around what does the demand side look like, who is going to fund it – private or capital – and that will give more clarity on what the private market [is looking for].”
PV Tech’s publisher Solar Media is hosting the Renewable Energy Revenues Summit on 21-23 May 2024 in London. The event will explore PPA design, the role of effective policy, evolving strategies for large energy buyers and more. For more information, go to the website.
