Last year, following Scottish Renewable’s event “Creating a Solar Strategy for Scotland”, we published a blog entitled “A bit of a Solar-coaster“. An apt name for a post on the ups and downs of Scotland’s solar market. Scottish Renewables recently hosted their inaugural annual Solar Conference & Exhibition, which I attended, and so we take this opportunity to look at what progress the market has made in the past year.
In our previous blog, we reported that Scotland was on track to meet its target of supplying 100% of demand for electricity from renewables by 2020; the Scottish Government had recently released figures showing that 49.6% of electricity consumption for 2014 was from renewable sources; and only 200 megawatts of the UK’s 8 gigawatts of solar capacity was in Scotland (likely a result of the differing light levels in each country). The key issues facing the solar market were: lack of capacity for grid connections, issues caused by policy making, funding uncertainty and lack of storage capacity.
So, what’s changed? Energy statistics for Scotland (based on provisional figures released by the Scottish Government in June) estimate that around 56.9% of Scotland’s electricity consumption came from renewables in 2015. This means that the 2015 target of 50% renewable electricity has been met (just) and there is a long way to go towards the 2020 target. Solar capacity in the UK as a whole is now almost 10 gigawatts. In Scotland, it’s almost 250 megawatts.
All of the key issues affecting the market remain:
- Grid connection is still an issue and was a key barrier raised by speakers at the conference. The distribution system is particularly constrained and further connection requires time and money.
- Policy making lacks consistency and regulation is increasingly unfavourable, not least the removal of subsidy support.
- Funding and investment remains difficult to procure. Capital is available but the certainty that investors require is absent with energy policy changes and wider political changes.
- Storage is sure to be a game changer for the industry (and for our power supply as a whole), but costs remain high and uptake low, with regulation slow to catch up.
So, what’s next? It’s clear we’re not off the “solar-coaster” yet – with standalone solar projects becoming less and less feasible – but the industry has been innovative and the opportunities are there (and being taken) to drive forward into the subsidy-free future. We expect to see co-location projects becoming more prevalent. There are obvious synergies between solar and wind generation and developers can take advantage of a shared grid connection. In time, co-location of storage may become the norm. This will help counter the intermittent nature of renewable supply and provide some of the steady output which investors favour.
Integration with consumers of power is another opportunity for solar. The steady (and negligible) maintenance costs of solar provide an attractive means for consumers to stabilise their electricity costs for several years by obtaining a direct solar energy supply. Developers benefit by avoiding the need to obtain a grid connection (instead using a private wire connection). Both parties benefit from the opportunity to agree an energy price which lies between the retail and the wholesale price. We expect to see more developments of this nature across industry, as well as solar supplies being built into local authority, commercial, community and residential buildings. Coupled with better storage systems, solar would meet most of a consumer’s regular demand.
These innovations are already being put into practice. For example, Banks Renewables have planning permission to build a new solar farm on ground currently occupied by Penny Hill Wind Farm. The projects will run concurrently and share the existing grid infrastructure and access tracks. Another example, spoken about at the conference, is the integrated renewable energy supply of Scottish ice cream maker Mackie’s, which combines solar PV, wind and biomass to power the company’s Aberdeenshire farm.
However, innovations bring new challenges for implementation. Projects will need to be carefully structured to allow for future co-location or storage requirements and for cooperation between parties (where the site and the grid connection are shared). Where solar is directly connected to the end-user, in industry or otherwise, consideration will need to be given to the rights of the user, as well as any landlord, tenant or other connected third party, and also to provisions for access and maintenance. Such sites will not be designed with solar in mind and will present more difficulties than the rural sites which are currently the norm.
Perhaps in another year we will be able to say that the “solar-coaster” ride is over. More likely we will see more market challenges, both the same and new ones. However, meeting these challenges offers more opportunities for development – after every dip comes a loop, after all.
On September 28, 2016