Time to clean up: All about Clean Power 2030

The National Energy System Operator (NESO) has published its recommendations to the Government in support of the Government's Clean Power 2030 action plan on 5 November 2024. The report, titled "Clean Power 2030: Advice on achieving clean power for Great Britain 2030", starts with the following statement that highlights the opportunity, but also the scale of the task: "Clean Power is a huge challenge, but it is achievable for Great Britain by 2030".

Key challenges for the energy industry

Clean Power 2030 is a high-level look at the energy system and does well to highlight and summarise the challenges facing the clean energy industry, as well as the measures that are in track to address these. Many industry participants will already be familiar with these; grid connection reform, market reform, delays in the planning system, supply chain pressures and the availability (or lack thereof) of an appropriately skilled workforce to undertake development of the scale and complexity that clean energy projects call for.

In some ways, there was not much new from the NESO on this front, but it is refreshing to see these elements tied together in a top-down format that will inform policy and decision making. As the report notes: "Perhaps the hardest challenge will be delivering across all areas together. Many elements of the supply chain are shared and there are overlaps in the required workforce and skills. Failures in any one area can cascade to failures elsewhere."

This is particularly pertinent where those challenges highlighted above all exist within a system that is already creaking at the seams. The devil is very much in the detail here, and the consultation on grid connection reform also published by the NESO today, the ongoing REMA and balancing mechanism consultations and an as-yet undefined change in the planning system will all be awaited nervously by those looking to develop, deploy and operate projects in coming years. With that said, it is clear that the government's intention is to push forward these reforms at pace, and it seems safe to assume that we will see significant reforms coming through in 2025 to align with the Clean Power 2030 pathways.

Spotlight on 'Clean Power'

NESO defines the clean power sector as one: "which by 2030 meets the following quantitative criteria: Clean sources produce more power than Great Britain consumes in total. Unabated gas (i.e. without carbon capture and storage) provides less than 5% of Great Britain's generation in a typical weather year."

Whilst acknowledging that the Government will in time develop its own definition of 'Clean Power', NESO provides a working framework within which the proposed pathways are set. 

Focus on infrastructure

The report contains a welcome focus on the necessity of delivering grid upgrades, both at transmission and distribution level. This is another area where the scale of the challenge is huge, and we must "Build all planned transmission network on time… twice as much in the next five years as was built in total over the last decade.".  We would argue this element is fundamental to achieving the rest of the Clean Power 2030 plan, and is one of the more concerning elements of the plan as it will rely solely on public investment as opposed to the largely private investment for generation.

The establishment of the NESO and production of this report bodes well for this element, if a more strategic view of the grid and improvements to it is taken, with a focus on developing capacity where it will be needed, over the previous "reinforcement in response to demand" policy that has existed to date – there are real opportunities for the growth and modernisation of the grid. There are already private entities looking at ways to maximise the use of what we already have (IDNOs, grid park style arrangements, etc) – this, combined with a renewed focus on development of transmission infrastructure, has the potential to unlock significant swathes of additional generation and flexibility.

Pathways

NESO recommends that two pathways are explored by the Government. These are not presented as mutually exclusive, but instead, the recommendation is to "aim high on both, reducing the risks of under delivery for the portfolio as a whole".

The 'New Dispatch' pathway focus on the deployment of new low carbon dispatchable power (carbon capture and storage ("CCS") and hydrogen) alongside an increase in nuclear capacity. The 'Further Flex and Renewables' pathway focuses on the fast deployment of renewables without new dispatchable power.

What does this look like in practice?

Under the 'Further Flex and Renewables' pathway the NESO identifies the following key technologies: (i) offshore wind (the contribution of offshore wind needs to reach a total of 43-50GW in 2030), (ii) nuclear generation (the contribution of nuclear generation is expected to fall from 6.1GW in 2023 to 3.5-4.1GW in 2030; still there is a role to play under this pathway), (iii) onshore wind (the contribution of onshore wind needs to reach a total of 27GW by 2030) and (iv) solar (the contribution of solar needs to reach 47GW by 2030). The report contains an interesting infographic (figures 8 and 9) showcasing the sharp increase in the scale-up of solar to achieve the requisite contribution levels.

The 'New Dispatch' pathway anticipates that gas with CCS and hydrogen to power will need to contribute 2.7GW by 2030 to facilitate a higher rate of displacement of unabated gas.

There is an oversupply of solar and onshore wind projects in the current connections' queue against the capacity that is required under this pathway, as aptly illustrated in Figure 13 of the report. Figure 14 includes a spatial map, showing the capacity and technology mix that is needed to align with these two pathways.

Section 3.3 of the report seeks to draw out the key differences between the two pathways in terms of reliance on unabated gas and import of fuels, as well as, curtailment costs. It is noted that the 'New Dispatch' pathway carries inherent risk, as it involves first of a kind technology, which require significant government support to get off the ground. The scale of the required investment and the development will also mean a heavier reliance on unabated or imported gas, as compared to the 'Further Flex and Renewables' pathway.

Making best use of what we have

NESO does not only advocate in favour of the deployment of additional infrastructure. Flexibility of usage of the existing assets is mentioned early on in the report. Section 2.2. sets out the hierarchy of flexibility, starting with demand side flexibility (which requires consumer engagement and behavioural changes), short-duration battery storage and vehicle-to-grid projects are next, followed by the use of interconnectors and unabated gas, as a last resort to maintain security of supply.

Across both pathways the NESO anticipates that the contribution of batteries need to increase from around 5 GW in 2023 to between 23GW – 27 GW by 2030. Again, the connections' queue is significantly oversubscribed, as shown in figure 5 of the report; and this is an issue that the Grid Connections' Reform process will seek to address.

On the subject of batteries, long-duration storage ("LDES") also features. It is very exciting to see this crystalising in policy and LDES undoubtedly has a key role to play in the future, alongside the increasingly long "short" duration BESS projects. On the LDES side, operational pumped hydro at the scale required by 2030 does feel quite ambitious, especially given the scale of some of the other challenges that tie closely with it – planning and consents feeling here like a really significant and sensitive area to work through.   

New opportunities

Aside from developing energy generation and storage projects and constructing infrastructure, there is plenty of room and requirement for additional changes that are likely to bring a raft of opportunity to the energy sector as a whole. The report identifies the role of digitalisation and innovation that will be required to create solutions allowing the energy system to be run more efficiently and optimise the technology being deployed (the dreaded skip rates receiving yet another mention). Artificial intelligence is specifically mentioned in this report as a means of supporting better spatial planning and providing the appropriate signals to end users to facilitate demand side flexibility.

Workforce and skills are also mentioned. While perhaps not the key focus in recent years this is certainly an area of challenge, but also of opportunity for those training and developing skills in key areas (grid engineers and planning specialists, for example), or those at the beginning of their careers looking to enter the clean energy sector. The challenge here will be in making sure the right skills come to market in the right timescales to ensure there is no bottleneck on getting projects built.

What now?

The clean energy industry has gone from strength to strength, despite being something of a roller-coaster, and the scale of both operational and in-development generation projects felt like a distant dream only a handful of years ago. The report states "It will not be easy, but the foundations are in place" – the actions of the clean energy sector to date are those foundations. 

The report provides a refreshed call to action to the industry, giving a clear signal of the direction of travel (and, hopefully, of policy) to come. That said, it does not exist in a vacuum. It is one piece of a wider policy overhaul and the Government's final Clean Power 2030 action plan will be influenced by, amongst other things, the recommendations contained in this report, the work that the NESO is completing on the Strategic Spatial Energy Plan (SSEP) and the latest consultation on the Grid Connections' Reform.

What is clear from the report is:

1. The future clean energy system will involve a combination of different technologies, offshore wind (featuring very prominently), onshore wind, solar, batteries (including LDES), alongside (possibly) gas with CCS and hydrogen;
2. Gas will still have a role to play in 2030 and beyond as a means of ensuring security of supply;
3. It is intended that Great Britain will become a net exporter of energy (although the report is clear that unabated gas should not be generated for export);
4. The pace of change should be rapid (the report specifically calls for certain transmission infrastructure upgrade projects to be brought forward prior to 2030) and the scale of public investment required will be high; and
5. Developers who wish to see their projects form part of the clean energy sector should act promptly to be in the best possible position to secure a place in an oversubscribed connections' queue.

At Foot Anstey, our Energy, Projects Infrastructure and Construction team are advising clients across the lifecycle of energy projects and supporting businesses growing first of a kind technologies and solutions. If you would like to know more or need support in relation to any of the areas mentioned in this article, then please do get in touch with our team.