2024 in Review: Key Developments in the Renewable Energy Industry

As 2024 draws to a close, our team has taken time to reflect on some of the year’s significant developments, while we prepare and plan for the upcoming year ahead.

This past year saw several notable events that have shaped the UK’s renewable energy landscape, including: 

• A New Labour Government with ambitious net zero targets – following the general election in July, the new labour government quickly started to implement plans to accelerate net zero. Key initiatives include the establishment of Great British Energy, a publicly owned company, lifting the de facto ban on onshore wind in England, and setting out a commitment to transitioning the UK to clean power by 2030. 
• Growing contribution of renewables to the UK’s power generation mix – Renewable energy sources accounted for 47% of the UK’s power generation in Q2 2024*. This increasing trend represents a positive step forward, recognising that a huge deployment of renewable technology is required to meet net zero targets.
• Ongoing power price volatility – European wholesale gas and power prices have remained volatile this year, driven by multiple factors, particularly rising geopolitical tensions. Whilst this won’t reach the levels we’ve seen in previous years; volatility will still lead to uncertainty extending into 2025. 
• Substantial increase of over 50% to the Contract for Difference (CfD) Auction Round 6 budget compared to previous round – this was enacted soon after the Labour government entered power and resulted in a record number of renewable energy projects being awarded contracts. As the largest auction to date, this milestone marks a step change in pace and prioritisation of government funding to deliver new renewable capacity.  

High level trends we’ve seen throughout 2024

• Increased cannibalisation of solar and wind – the intermittent nature of solar and wind generation, dependent on weather conditions, can lead to periods of surplus output. Cannibalisation occurs when excess generation drives electricity prices down as supply exceeds demand in peak generating times. The lower prices reduce the financial value of renewable energy generation, posing a challenge for generators industry wide. There are several strategies that could help to reduce this risk, but overall, it is likely to grow in Great Britain as more renewable generation continues to be built:
  • Energy storage – being able to store excess power for use during high-demand periods can help ensure that renewable energy retains its value
  • Enhanced Grid management – improving the infrastructure to better balance supply and demand can contribute to greater price stability and likely reduce the impact of intermittent renewable generation on market prices
  • Demand side flexibility – shifting electricity consumption away from peak demand periods
• The rise of co-location – co-location is an emerging trend where a renewable energy generation source, most commonly solar, and a battery storage system are installed on the same site, with a single grid connection point. It is viewed as a strategic solution to optimise resources, as well as increasing cost efficiencies, scalability, and reliability. Co-location provides numerous benefits, including maximising revenue for generators, balancing intermittent generation, and storing energy to optimise output. This is a rapidly advancing solution, driving innovation within the industry and we’re expecting this to continue to be a preferred solution for future projects too. Learn more about one of our recent co-location deals here, where we purchase the solar output through a PPA and manage the battery optimisation alongside this. 

• CfD auctions – In the recent Auction Round 6 (AR6), some generators opted to return part of their AR4 offers to pursue funding through AR6. For those that were successful, this resulted in securing a better financial offer and improving their project viability. 

  Applications for the next auction round (AR7) are expected to open in March 2025, which will mark another milestone opportunity for generators to bid for funding to deliver new renewable projects. We’ll continue to support our network of generators throughout the process. 

• Challenges to securing timely grid connections – achieving the government’s ambitious net zero targets and delivering clean power by 2030 will require at least double the current onshore wind capacity, and triple or even quadruple offshore wind and solar capacity. However, arguably the biggest barrier to this growth is the challenge of securing timely grid connections, with some new sites facing connection delays until 2033. In response, the National Electricity System Operator (NESO) has recently announced plans to expedite this transition. Read more about what their plans mean for the grid, and generators in our latest blog, here.