Vish Sharma, Head of Power Purchase Agreements, at npower Business Solutions
Independent energy generators – including organisations with on-site energy assets – have become a crucial part of the UK’s energy generation mix. They provide a reliable and secure source of power to homes and businesses across the UK and are largely unaffected by the pressures and volatility of the wholesale energy markets.
That is why, with the UK government outlining ambitious plans for the growth of renewable energy by 2030, we believe that independent generators will play a major role in achieving these targets.
Our latest report – Clean power 2030: Harnessing the power of the UK’s independent energy generators – gauged the views of more than 350 independent generators across the country to get their opinions on recent policy decisions, the new policies they would like to see, and importantly, the role they believe they can play in the UK’s clean energy future.
It revealed that, while a third (33%) of independent generators believe government policies will support development of more independent renewable assets, almost one in four (23%) don’t feel they go far enough yet. Nearly half (45%) are undecided.
Key barriers reported by generators included planning restrictions, difficulties securing investment, long timescales to develop projects and addressing community concerns.
Therefore, nearly two thirds (63%) are calling for a reduction in the ‘red tape’ around renewables, more than half (56%) want more finance packages, grants and incentives for investment in energy generation assets, and almost a third (31%) would like to see the development of the Power Purchase Agreement (PPA) market.
Other answers included a stable and predictable tax regime, accelerated grid connection, reinstating or extending the Feed in Tariff (FiT) scheme, ensuring a guaranteed and fair price for energy production, and more support for innovations such as agricultural photovoltaics.
Making sure the voice of generators is heard
We believe it is important that these views are listened to at the highest level. Independent generators will form a vital part of the clean power mix and need to be supported if the government is to hit its ambitious targets.
For us, there are three core reasons why the voice of independent generators needs to be heard.
- Businesses want to buy energy from independent sources
Independent generators already provide clean and reliable power to a huge number of businesses and households across the UK. Of the generators we surveyed, two-thirds (67%), say they have seen an increase in business demand to buy power from independent sources over the past two years, with 30% saying this was a significant increase.
In fact, one in five (21%) are already exporting their power to commercial customers via either a fixed or flexible Power Purchase Agreement (PPA).
The benefits for businesses buying their energy in this way are numerous, including stable pricing, having a guaranteed clean energy supply and greater overall energy security. - They will help the UK achieve its net zero and energy security ambitions
A huge 80% of those surveyed believe that independent energy generators will play a vital role in the low-carbon transition, by helping the UK achieve both its energy security and net zero ambitions.
With an increasing number of businesses procuring their power from clean energy sources, independent generators can both meet this demand, and contribute to the UK’s overall low-carbon strategy. - They provide a reliable and long-term source of clean power
Of those independent generators who are already exporting their power to businesses, the majority (58%) doing so through a fixed Power Purchase Agreement (PPA). One in five (20%) said they currently use a flexible PPA.
For generators, PPAs are seen as the best route to market for their power and a great way to secure additional revenue. Importantly, independent generators recognise that PPAs also give long-term investor confidence to develop a project.
For businesses wanting a safe, secure and reliable power source, independent generation assets are able to meet demand without navigating the increasing complexities of the wholesale energy markets.
Supporting independent energy generators now and in the future
So, the message is clear. While the moves taken so far by the new government to accelerate the deployment of renewable energy are promising, as we move ever closer to the 2030 clean power target – and the longer-term 2050 net zero target – the government needs to continue to ensure that its policy matches its ambition.
And, we believe that the only way to do this is by taking the views of independent energy generators into account.
This article appeared in the Jan/Feb 2025 issue of Energy Manager magazine. Subscribe here.
