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What can the clean energy sector look forward to in 2018?

Charging an electric car

The UK’s clean energy sector was revitalised last year after being in the doldrums following the cull of support mechanisms in 2015. Notable events of 2017 included the final closure of the Renewable Obligation, Dieter Helm’s cost of energy review, the emergence of energy storage, multiple announcements on electric vehicles (EVs) and the commissioning of the world’s first floating offshore wind farm off the Scottish Coast. So what can we look forward to in 2018 (and beyond)?

  • Following a number of announcements on EVs from both Government and car manufacturers in 2017, we anticipate a significant expansion of charging infrastructure which currently stands at 12,000 charge points in the UK. This will present new opportunities for owners of car parks and in particular owners of out-of-town retail and business parks.
  • The exponential rise in use and value of virtual currency means blockchain is likely to gather momentum and we see its use within the energy sector becoming a reality in the medium term, enabling faster and more efficient peer-to-peer energy trading.
  • The UK has so far made limited progress on the decarbonisation of heat. The electrification of heat and heat pump technology in particular will play a key role in achieving the UK’s stated heat targets and reducing our dependence on gas.
  • We are now in Phase 2 of the UK’s Energy Savings Opportunity Scheme (ESOS) for all large businesses in the UK. Organisations will need to act early in 2018 to identify opportunities to significantly reduce their energy consumption.
  • Energy storage, while not a new concept, gathered momentum in 2017 with the emergence of viable commercial scale battery technology. As the technology advances to include longer storage durations, this year we expect to see more projects deployed onto the grid including those co-located with existing renewable energy generation. This is a sleeping giant which will continue to grow into the 2020s, presenting opportunities for property owners near to grid infrastructure and existing generators.
  • It is well known that the Feed-in Tariff (FIT), which has been responsible for the widespread deployment of small-scale energy projects in the UK, will close in 2019. However, the market will be eagerly anticipating a new policy from Government on its replacement, if any. We expect that it will be replaced by the creation of a technology neutral contract auction and await the detail.
  • Large-scale onshore wind and solar projects were the big losers from the 2015 support mechanism cuts, but with renewed interest in the sector, technology innovation, the emergence of Corporate Power Purchase Agreements and in the case of solar, the removal of the EU minimum import price for panels following Brexit, 2018 will see the first zero subsidy/merchant projects become operational. This when combined with the successor to FITs leads us to believe clean energy developers will increase new site identification activity.

There will undoubtedly be a number of twists and turns in the UK's vibrant energy sector over the next 12 months, but we look forward to another busy year, particularly with target deadlines looming.

Further information

Contact Savills Energy, Utilities & Infrastructure



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