The number of UK businesses generating their own power has more than doubled in four years, with solar being the most popular technology, according to analysis of data from Ofgem.
The number of UK businesses generating their own power has more than doubled in four years, with solar being the most popular technology, according to analysis of data from Ofgem.
The findings are contained in the fourth annual report on independent renewable development from SmartestEnergy, which buys renewable energy from independent generators.
This found that independent generators, including businesses, invested over £376 million in more than 1,000 commercial-scale renewable projects in 2015, adding 2.4GW of new capacity.
It found that businesses were among the most active investors in renewable energy last year. The need to increase energy security and pressure from customers and consumers to be more sustainable were cited as the main reasons for investing in renewable technologies.
According to SmartestEnergy, there are now 728 business sites producing renewable energy, with 155 added last year, adding 99MW of new energy capacity and generating almost £100m of electricity.
Retailers and wholesalers with supermarket and warehouse roofs ideally suited to solar panels last year added 88 new renewable energy projects, taking the total in this sector to 281, SmartestEnergy said. Manufacturers added 14 new sites and the service sector installed a further 12, the firm found.
The military developed one 49.9MW project last year and the transport sector developed six sites, which generates 28.4MW. Corporate renewable energy developments now account for more than 13% of all independent renewable projects, SmartestEnergy said.
Total renewable energy technologies installed by business sector
The independent generation sector as a whole now supplies 7.6% of UK electricity demand:
- Independent developers built 408 projects, adding 2.15GW last year.
- Farmers and landowners built 209 new projects in 2015, with a combined capacity of 56MW.
- Waste disposal operators installed 77MW of renewable capacity in 2015, including two large energy from waste projects and a small sewage gas scheme.
- Eight large-scale community projects added 10MW of new capacity.
Despite the surge last year in new installations, SmartestEnergy warned that independent generators now face a crisis. Wholesale electricity prices fell more than 20% in 2015, largely as a result of cheap oil and gas. Although overall independent renewables capacity grew 28% over the year, the wholesale value of the electricity it generated dropped by more than 4%.
At the same time, the government has cut subsidies and there is continuing uncertainty over future energy policy. This is pushing up the cost of capital for renewable projects, SmartestEnergy said.
Growth is likely to continue while there are projects in the pipeline with guaranteed subsidies, but policy to support independent generators and investors is essential for the future and for the UK to meet its climate change targets, the company said.
The report highlights the potential of battery storage, as independent generators look for ways to extract more value from existing projects and make future projects viable. The first independent generating companies are already installing commercial-scale units to allow them to store wind and solar energy and sell it when it is most profitable, it says.
Robert Groves, chief executive of SmartestEnergy said: ‘The government needs to restore confidence to the industry by providing stable policy and certainty. It should ensure that the capacity market allows all participants to compete on a level playing field and it should also work with the industry to develop frameworks to encourage the roll out of energy storage and maximise its ability to accommodate the growing amount of renewables on the grid.’
