The Energy Management Exhibition (EMEX) 2016, which took place in London on 16 and 17 November, showed that solar in the U.K. has a lifeline, by working in tandem with other energy technologies. This was particularly evident in the seminars at the event, which were split into four main categories: meeting energy demand; technology and innovation; utilities and energy services; and energy management as a profession.
Changing relationship between government and industry
One question that emerged during the event is to what extent U.K. stakeholders (e.g large businesses, universities, councils, etc) will be convinced to include solar PV in their energy management plans.
The energy market changes very fast, Nick Boyle, CEO of Lightsource Renewable Energy, said at the event. While it’s true that the U.K.’s solar boom was a result of the previous subsidy schemes, today, PV plants tend to be built after being awarded power purchase agreements (PPAs), Boyle added. This is because energy generated from PV is able to undercut the electricity bills of large electricity users (e.g. universities), Boyle explained.
Lightsource Renewable Energy focuses on the large-scale segment of the PV market, where past subsidy schemes (e.g. ROCs) are abandoned and new schemes (e.g. CfDs) operate under the tight scrutiny of the government, who has so far been reluctant to support solar.
However, this should stop being so pivotal to success, Boyle argued at EMEX. In previous years, he claimed, "we [the solar industry] had a three parts relationship: the government, us [the solar developers] and the financiers. Today, the relationship is altered and includes the customers who buy electricity, us and the financiers." In other words, subsidies were there to lead solar to grid parity, but since solar has now reached this point we are able to bypass the government and deal directly with the load users, Boyle suggested.
Where policy support is still needed
This alone is a seismic shift, said Robert Hughes of Powerstar, a company that designs and manufactures a range of energy saving technologies, such as the virtue energy storage system. We currently have a linear energy system model that operates based on generating, distributing and consuming energy. Distributed energy changes all of this, said Hughes, who was speaking at the same panel as Boyle.
"In this new bottom-up world, we [the distributed energy stakeholders] need to create partnerships with power transmission and distribution companies and look at things in a different way than we have done until today," Hughes claimed.
This is where the renewable energy stakeholders clearly need government policies to assist them. The grid was not built for today’s diverse energy system, and since there is no silver bullet that can solve the problem, we need dialogue between all energy actors and the grid owners, argued Boyle.
Earlier this month, the U.K. government and energy regulator called for experts to contribute to a dialogue for a more flexible energy system for the country.
The next step into a new energy era cannot be resisted, and it is certain to come with its challenges. For instance, as John Rhys of the University of Oxford program on integrating renewable energy said at a separate EMEX event, the distribution network tariffs today try to recover costs from those who need the grid services the most. Yet, there is no clear contingency plan for when these users opt for energy storage instead, as there is no obvious alternative for somebody else to cover the costs.
In the coming years, it does not look as if the U.K. will add a significant amount of PV installations, such as in the years just gone. However, the policy decisions that are made now will have a profound influence on the future of the solar industry. Meanwhile, Boyle made it clear: "we want to go to the point where we [PV technology] are the cheapest form of power generation."