As renewables’ contribution to the UK energy system grows, we continue to invest in a range of proven clean technologies that can work together to fully decarbonise the UK’s electricity system, reflecting the government’s legally binding net zero targets. This includes:
1. Grid connected wind and solar – The UK benefits from abundant wind and solar resource, with these technologies now representing the cheapest way to generate electricity, operating at well below the current wholesale electricity price. We’re proud to have funded the construction of England’s largest onshore wind turbine in 2022 and will continue to invest in wind and solar generation, as the UK requires a fourfold increase in clean electricity generation in order to achieve net zero.
2. Direct wire renewables – Direct wire projects offer on-site electricity generation to an industrial host, reducing the carbon intensity of their operations. Through our work with Olympus Power, we helped more businesses to decarbonise in 2022, funding the installation of rooftop solar arrays that give the host business access to low cost, zero carbon electricity and price stability. Companies can also use their lower carbon footprint to win and maintain contracts as their supply chains become increasingly carbon conscious.
3. Flexibility – To make the most of the UK’s wind and solar resource, we need to expand our storage capacity. Increased flexibility extends the use of renewable energy by reducing the need to rely on fossil fuels at times when there is a gap between electricity demand and generation. This year we completed the construction of our 20 MW battery storage project in our home city of Bristol, our biggest battery asset to date. Once commissioned, it will have the capacity to store and deliver 1.5 hours of 30MWh of electricity to the national and local grid.
4. Baseload renewable electricity generation – In order to reduce the UK’s reliance on expensive and polluting fossil fuel generation, we need additional options which can deliver renewable power whatever the weather. After providing the first commercial funding for the United Downs Geothermal project in 2020, we’ve made an additional £3 million investment to complete construction at the site. United Downs is the UK’s first geothermal electricity generation project and will generate power up to 24 hours a day, seven days a week. There is also potential to extract lithium from the geothermal brine at the site for use in EV and other batteries, providing an additional revenue stream and a homegrown, ethical source of this rare mineral.
5. Earlier stage development – Most of our investments acquired or funded to date have been assets with planning consent, a grid connection offer and land option already in place. In response to an increase in the market demand for assets at this point in their development journey, we started investing at an earlier stage of development, using innovative commercial approaches. There have been investments into geothermal generation, commercial roof top solar, small-scale hydro, battery storage assets, ground source heat pumps and solar electricity for the railways. We will continue to consider opportunities at this earlier stage of development to ensure
6. Heat – Heating is a more challenging sector to decarbonise and is significantly behind renewable electricity generation in the UK. It is the largest single source of emissions in the UK. The United Downs geothermal site in Cornwall will generate heat as well as electricity which can be sold for local use. We have also continued to support ground source heating with a second investment in Rendesco, a company which installs ground source heating systems into commercial properties.