Ecobuild London: UK searches for an energy future

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The doors to London’s Ecobuild 2016 show opened on Tuesday, inviting people for three days to explore pathways to greener energy and built environment infrastructure.

Ecobuild, by nature, takes a holistic approach to energy, which includes ideas across the generation, demand and management sides. However, this year’s show rather overplays this card, which appears to be the strongest weapon the U.K.’s PV sector has presently to survive.

The trend is also evident in all U.K.-based solar shows, many of which in recent months have undergone a necessary rebranding, adopting more generic titles and targeting customers that seek holistic energy solutions across the clean energy spectrum, reflecting a changing landscape that no longer pays to focus on solar PV systems alone.

Emerging and unloved technologies: storage

One off the most revealing presentations on day one was delivered by Mark Wray, lead technologist at Innovate U.K., a governmental institution that promotes innovation. Wray spoke about the key innovations required to guide U.K. energy to 2025.

Of these innovations, what his team calls "the emerging and unloved technologies", such as electricity storage, evoke concern. Views regarding the timing of just when electricity storage in the U.K. will be necessary on a significant scale vary greatly, Wray warned. Thus, he explained, for the National Grid – the company that owns and manages the U.K.’s transmission grid – storage is “likely part of the tool kit” and "could play a valuable role" in five years time.

For Ofgem, the U.K.’s energy regulator, "storage could potentially play a significant role as a new provider of flexibility" within one year, while for the distribution network operators, probably some niche storage applications will appear in the next six to 15 years.

That same roadmap could happen with the domestic storage market too, Wray added, where depending on whom you talk to, you get a different response. For example, he said, if you speak to Tesla people you would immediately get the impression that the world and his dog is interested in domestic storage, but others view it differently. Certainly though, Wray concluded, there is a potentially big market for domestic storage solutions.

Contrasting views on the urgency of adding electricity storage, as depicted by Wray, indicate the present-day fluidity and vulnerability of the U.K. energy system. Nobody really understands what is coming and when, and the sector is highly unpredictable. No wonder even more established technologies do not dare to invest in new facilities (see for example the failure of the first and second capacity markets to attract new investments).

Nevertheless, Wray said, the U.K. is leading R&D storage efforts in Europe. Innovate U.K. for instance, currently runs 17 storage projects aiming to address the technology and business models supporting it. By 2014, Wray added, Innovate UK had invested around £11 million in projects concerning virtual power plants, vehicle to grid units and others.

Innovate UK will also open a £2 million funding competition on March 28 calling for technical feasibility studies to encourage SMEs to enter the energy sector with their disruptive technologies. The competition is called Energy Game Changer.

PV is a dynamic sector

U.K. solar PV has achieved things nobody expected, Gavin Thompson, head of energy consulting at BuroHappold Engineering, told the show. But this huge success, he added, was impacting the grid, and thus the government needed to regulate the sector, inevitably cutting subsidies and limiting PV’s growth.

Feed-in tariffs (FITs) specifically were very effective in driving the sector enormously, but at last the U.K. government is learning to understand the dynamic environment that PV operates in, Thompson noted. Previously, he had also argued that the U.K. energy sector is market and stakeholder-led.

However, it is difficult to find a more misinformed and short-sighted analysis than his. For a start, Thompson ignored the fact that the U.K. energy sector has ceased being market-led. The government very much decides which technology and how much of it will be installed (doing so via the Contracts for Difference mechanism).

Further, to posit the argument that to regulate a sector because it grows unexpectedly is neither in line with the market-based economy principles nor a clever example of how to deal with it. Storage technology, for instance, allows for economic solutions that would often eliminate the need to reinforce the grid.

Finally, not even the conservative U.K. Government has tried to claim that grid issues were the reason to cut solar subsidies; rather, their rhetoric always fixated on budgetary concerns and the need to protect consumer bills.

Clearly more successful was Thompson’s argument that the U.K. does not have a sound energy policy and this is why so many different forecasting scenarios are being put forward.

Despite the government’s effort to regulate the energy sector, stall the PV technology and boost others, PV is so dynamic that it will kick back quickly. The government’s vision of a centralized energy system is inevitably short-lived. A look at the ongoing investment hiatus in established sectors like the gas and nuclear power industries indicates why the U.K. government is simply losing time.