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The road to clean power 2030

A clear, strategic approach is needed to turbocharge infrastructure delivery.

By Tom Glover

The government’s clean power by 2030 target – one of its five central missions – is incredibly ambitious. But as a “north star”, this mission can help accelerate investment and drive economic growth. Early signs from the first 100 days have been positive: overturning the ban on onshore wind, setting a record budget for the latest renewables auction, and confirming support for the first phase of carbon capture projects. But this must only be the start.

With 2030 in sight, we cannot lose momentum. Industry and government need to work in partnership. And as the UK’s leading power generator and a leading renewables developer, RWE is well placed: we invested €3bn net in new green energy infrastructure projects in the UK between 2021 and 2023 and have ambitions to invest around €8bn net in the years 2024-30.

Through our investments, we already know the benefits that clean power can bring to towns and cities across Britain. Over 50 per cent of the investment in RWE’s Sofia Offshore Wind Farm, now under construction in the North Sea, is within the UK, with the 108m blades being manufactured in Hull. This one project alone will support 8,800 jobs across the UK during development and construction.

Accelerating renewables deployment

Alongside bringing investment and jobs, offshore wind increases UK energy independence and helps billpayers by reducing exposure to volatile fossil fuel prices. Independent analysis by Aurora Energy Research shows that an electricity system dominated by offshore wind by 2035 is cheaper for billpayers than alternatives, with consumers potentially £68 a year better off in 2035 in an offshore-dominated system.

Now is the time to accelerate investment in renewables. To achieve this, we need a step change in deployment – however, in the most recent renewables auction, only around one third of the eligible new offshore projects were successful. It is therefore imperative that next year’s auction maximises the available pipeline of projects, as well as offering value for money for billpayers.

Decarbonised flexible generation

Renewables such as wind and solar will play the central role in meeting clean power by 2030. However, firm, flexible capacity will continue to be necessary to balance the grid and ensure security of supply.

Through our fleet of gas-fired power stations, we already play a crucial role in providing this flexibility and security. To meet our goal to be carbon neutral by 2040, RWE is exploring using carbon capture and storage (CCS) and hydrogen combustion to reduce the emissions from our power stations. In the UK, we are actively developing four CCS projects, which altogether could produce enough flexible, low-carbon electricity to meet the peak winter demand of up to 5 million households.

However, it will not be possible to deploy these at scale before 2030. Therefore at least in the near-term, “unabated” gas will continue to play a critical role in terms of security of supply. Our analysis suggests that, assuming the government’s stretching renewable targets are met, installed firm, flexible capacity could be roughly the same in 2030 as today (around 30-35GW) of which the majority remains unabated gas, but running far fewer hours of the year, comprising just 5 per cent of generation, compared with 35 per cent in 2023.

The government recently reaffirmed its commitment to developing CCS by pledging £21.7bn of funding, over 25 years, to the first tranche of projects and their associated carbon stores in the north-west and Teesside and Humber.

This is a welcome step forward in providing a clear signal to industry, recognising how CCS can decarbonise our industrial heartlands and protect energy security. But we need continued support. It is essential that the forthcoming Spending Review commits to funding the next phases of projects and stores. The government must also provide a framework to enable non-pipeline transportation of carbon via shipping. As well as playing a major role in our domestic decarbonisation efforts in the UK, carbon shipping presents a significant international trade and export opportunity. The UK’s geography means that we are uniquely well placed – utilising existing expertise on the UK continental shelf and decades of oil and gas experience in the North Sea.

Working in partnership – from spreadsheet to delivery

In developing a challenging yet credible pathway to 2030, it is important that government works in partnership with industry to take ambition from “the spreadsheet” to “delivery”.

We welcomed the establishment of “Mission Control” as a “one-stop shop” to troubleshoot and clear the way for energy projects. To ensure the pathway is actually deliverable, government must consult closely and in detail with industry experts who are currently tasked with developing and deploying the critical projects required for 2030. Without consented projects, we cannot drive growth. The government’s focus on breaking down planning barriers is therefore welcome.

However, at RWE we understand that consent cannot be at the expense of public support. It is important that developers continue to consult with local communities in a way that is both meaningful and conveys the benefits that investment and infrastructure can bring to host communities.

Facilitating a comprehensive industrial strategy

It is clear the government wants to play a constructive, strategic role in the economy, and it will shortly set out its approach in the forthcoming Industrial Strategy. This will also include new institutions such as the National Wealth Fund (NWF) and Great British Energy. There is certainly a role for an entity like the NWF in facilitating long-term investment in strategic assets, such as ports, to ensure the UK can deliver on its clean energy goals.

Furthermore, GB Energy could have a role in unlocking critical investment, but it must not simply “crowd out” the private sector. Clarity is needed on GB Energy’s mandate to ensure that this is the case. In summary – a positive start has been made by the new government. But with the countdown to 2030 now on, there must be a relentless focus on delivery, with the public and private sector working hand-in-hand to drive investment and economic growth.