The National Audit Office (NAO) accused the government of lacking "a clear and comprehensive delivery plan" last week and urged the recently created department for energy security and net zero (DESNZ) to focus on creating one.
The UK's goal of a carbon-neutral energy supply by 2035 will require a rapid expansion of wind, solar and nuclear power and some 50GW of offshore wind is needed by 2030 to achieve it.
‘£62 million a day’ in curtailment
“That will require much faster deployment rates than have been achieved before,” the NAO said, adding that the DESNZ will need to oversee the deployment of “nearly three times as much offshore wind capacity in eight years as it has in the last two decades”.
Offshore wind capacity has grown, but generators have been paid up to £62 million a day to reduce output when supply outstrips demand, the NAO found.
A Sky News investigation last month revealed that wind farm operators were paid £215 million to shut down turbines last year, according to analysis by energy technology firm Axle Energy, while energy regulator Ofgem told reporters the grid is "not yet fit for purpose".
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According to Axle Energy, shutting down wind turbines also reduced wind energy generation by 6% and cost a further £717 million in gas turbine use near demand centres.
"Ensuring network capacity keeps pace with expanding generating capacity could avoid the risk of paying wind farms to shut down,” the NAO said.
Constraint costs to reach £2.5 billion
The investigation found that the National Grid has warned of annual constraint costs rising to as much as £2.5 billion by the middle of the decade before the necessary grid upgrades are made.
The NAO report called for a “step-change in both private investment and the pace at which new generating capacity is built”.
In its net zero strategy, the government estimated that building new generation capacity would require between £280 and £400 billion of investment.
But this does not include the other costs of decarbonising electricity production, such as network construction or research and innovation of technologies.
Risk of failure
“Total costs will depend on multiple factors, including the location of new generation and the impact of any reforms to the electricity market,” the NAO report said.
“The longer DESNZ goes without a critical path that brings together different aspects of power decarbonisation, the higher the risk that it does not achieve its ambitions, or it does so at a greater than necessary cost to taxpayers and consumers,” said Gareth Davies, head of the NAO.
A report this week by Vattenfall Networks also warned that increased demands for electric fleets, heat pumps and net-zero industrial processes will require “significant reinforcements and upgrades” of the UK’s transmission and distribution networks.
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