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UK Renewable Energy market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Renewable Energy market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key Issues Covered

  • How do government policies shape the development of the renewable energy market?
  • What is the potential impact of Brexit on the UK renewable energy sector?
  • What is the product mix of renewable energy deployment?
  • How have key players involved in the renewable energy sector performed in recent years?
  • What is the anticipated future development of the renewable energy sector?

Definitions

The terms of reference for this report concern the UK renewable energy market. This covers:

  • Biogas from anaerobic digestion
  • Biomass
  • Hydro electric
  • Tidal power
  • Wind power
  • PV cells
  • Landfill gas
  • Sewage gas
  • Wave power

Segmentation

  • Offshore Wind
  • Offshore Wind
  • Solar Photovoltaics
  • Hydro
  • Landfill Gas
  • Energy from Waste
  • Plant Biomass

Company Profiles

  • A Shade Greener
  • Biogen (UK)
  • British Solar Renewables
  • Conergy UK
  • First Hydro Company
  • Good Energy Group
  • Lightsource Renewable Energy Holdings
  • ScottishPower Renewables
  • SSE
  • Solar Century
  • Tamar Energy
  • Vattenfall Wind Power
  • Vestas-Celtic Wind Technology

Expert analysis from a specialist in the field

Written by Claudia Preedy, a leading analyst in the B2B sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Renewables are set to continue to play an increasingly important role in UK electricity supply, but the deployment of more mature technologies, such as onshore wind and solar PV, is currently slowing significantly amid reduced government support. However, with costs rapidly falling, more mature technologies are expected to experience a new wave of growth in a subsidy-free world. The offshore wind sector, which continues to benefit from government backing and impressive cost reductions, has by far the strongest development pipeline. Claudia Preedy
B2B Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Renewables' share of total electricity generation nears 30% in 2017
              • Figure 1: UK renewable penetration of electricity generation, 2013-17
            • UK renewable energy installed capacity dominated by wind
              • The UK is the world leader in offshore wind
                • Figure 2: UK renewable energy market shares, by installed capacity, 2013 and 2018
              • Revenue growth in UK renewable energy sector slows in 2017 due to a drastic decline in solar PV sector
                • Figure 3: UK turnover of renewable energy industry, 2013-17
              • Renewable energy generation to show continued growth over the next 10 years
                • Figure 4: Forecast renewable electricity generation, 2017-35
              • Government urged to implement more supportive policy framework to secure future investment in low carbon sector
                • What we think
                • Issues and Insights

                  • Government policy changes dampen UK clean energy investment
                    • The facts
                      • The implications
                        • Offshore wind costs are falling fast, driven by bigger turbines, increased competition and a growing UK supply chain
                          • The facts
                            • The implications
                            • The Market – What You Need to Know

                              • Renewables’ share of electricity generation reaches nearly 30%
                                • Investment in UK low carbon sector has stalled over last two years
                                  • Government urged to implement more supportive policy framework to secure future investment on low carbon sector
                                    • Some investors are starting to see opportunities in subsidy-free and storage projects
                                    • UK Electricity Generation

                                      • Overview
                                          • Figure 5: Analysis of electricity generation the UK, by type of fuel used, 2013-17
                                          • Figure 6: Proportional importance of fuel source in UK electricity generation, 2013 and 2017
                                        • UK renewables generation
                                          • Figure 7: Renewable electricity generation in the UK, 2013-17
                                          • Figure 8: UK renewable energy market shares, by installed capacity, 2013 and 2018
                                      • Wind Generation

                                        • Overview
                                          • Figure 9: UK onshore and offshore wind energy generation capacity, MW and %, 2013 and 2018
                                        • Onshore wind
                                          • Early closure of RO for onshore wind
                                            • Record number of onshore wind farms built in 2017 as developers rush to meet subsidies deadline
                                              • Currently no government support available to onshore wind projects
                                                • But cost of onshore wind is falling fast
                                                  • Future potential for onshore wind
                                                    • Offshore wind
                                                      • 33 offshore wind farms operational in UK
                                                        • The UK is the world leader in offshore wind
                                                          • Offshore wind sees significant cost reductions
                                                            • Result of second CfD auction reveals further cost reductions for offshore wind
                                                              • Turbine sizes are increasing, enabling developers to slash costs of wind farms
                                                                • Wind generation capacity and generation
                                                                  • Figure 10: UK wind energy capacity, 2013-18
                                                                  • Figure 11: UK wind energy generation, 2013-18
                                                                  • Figure 12: UK wind energy capacity, by country 2014-18
                                                                  • Figure 13: UK wind generation development pipeline, as of July 2018
                                                              • Shoreline Wave/Tidal Generation

                                                                  • The Crown Estate licences wave and tidal sites to help unlock opportunities
                                                                    • Hendry review concludes that tidal lagoons can play a cost effective role in the UK’s energy mix
                                                                      • Swansea Bay tidal lagoon project gets thrown out by government despite backing from Hendry review
                                                                        • Just 18MW of wave energy capacity installed to date
                                                                          • Figure 14: UK wave energy capacity and generation, 2013-18
                                                                          • Figure 15: UK wave and tidal capacity in development pipeline, as of July 2018
                                                                      • Photovoltaic Generation

                                                                        • Overview
                                                                          • Ground-mounted sector moves into post-subsidy phase
                                                                            • Emergence of PPAs present growth opportunities for ground-mounted solar PV installations
                                                                              • 8.3 GW installed capacity across 1,122 solar farms operational
                                                                                • UK sees dramatic fall in solar PV installs in 2016 and 2017 following government policy change
                                                                                  • Figure 16: Photovoltaic installations in the UK, 2011-18
                                                                                  • Figure 17: Photovoltaic installations in the UK, 2010-17
                                                                                  • Figure 18: Photovoltaic installations in the UK, by capacity of installation, 2012-18
                                                                                  • Figure 19: Photovoltaic installations in the UK, by accreditation scheme, 2012-18
                                                                                  • Figure 20: Photovoltaic installed capacity in the UK, by size, as of July 2018
                                                                                  • Figure 21: UK PV development pipeline, as of August 2018
                                                                              • Hydro Generation

                                                                                    • Figure 22: UK hydro energy capacity, 2013-18
                                                                                    • Figure 23: UK hydro electricity generation, 2013-18
                                                                                    • Figure 24: UK hydro electricity development pipeline, as of August 2018
                                                                                • Bioenergy Electricity Generation

                                                                                    • Recent government policy changes affecting the bioenergy sector
                                                                                      • Clean Growth Strategy highlights bioenergy’s potential
                                                                                        • Landfill gas
                                                                                          • Sewage sludge digestion
                                                                                            • Energy from waste
                                                                                              • Advanced conversion technology (ACT)
                                                                                                • Animal biomass
                                                                                                  • Anaerobic digestions
                                                                                                    • Co-firing and biomass
                                                                                                      • UK government-commissioned report positive on biomass
                                                                                                        • Bioenergy installed capacity and generation
                                                                                                          • Figure 25: UK bioenergy installed capacity, 2013-18
                                                                                                          • Figure 26: UK bioenergy and waste generation energy capacity, as of end of March 2018
                                                                                                          • Figure 27: UK bioenergy generation, 2013-18
                                                                                                          • Figure 28: UK bioenergy capacity, by country, 2018
                                                                                                          • Figure 29: UK bioenergy development pipeline, as of July 2018
                                                                                                      • Market Forecast

                                                                                                        • Decarbonisation of UK energy system
                                                                                                          • Growth in decentralised and renewable electricity generation will increase the complexity of operating a secure and cost-effective energy system
                                                                                                            • Investment in UK low carbon sector has stalled in last two year, highlighting importance of more supportive government policies
                                                                                                              • Some investors are starting to see opportunities in subsidy-free projects, storage projects and newer technologies
                                                                                                                • Energy storage to play key role in transition to clean electricity supply system
                                                                                                                  • BEIS and Ofgem unveil plans for major upgrade of the UK’s energy systems, including the removal of barriers to storage
                                                                                                                    • Government unveils £246 million battery investment strategy in July 2017
                                                                                                                      • Renewables capacity development pipeline
                                                                                                                          • Figure 30: Renewable energy projects in pipeline, by technology, as of August 2018
                                                                                                                          • Figure 31: Forecast renewable electricity generation, 2017-35
                                                                                                                      • Future Energy Mix and Demand

                                                                                                                        • Future energy demand under National Grid’s Future Energy Scenarios
                                                                                                                            • Figure 32: Annual power demand in Great Britain, 2017-50
                                                                                                                            • Figure 33: Annual power demand in Great Britain, 2017-50
                                                                                                                          • Future potential energy mix
                                                                                                                              • Figure 34: Forecast power generation installed capacity under “community renewables” scenario, by source, 2017-50
                                                                                                                              • Figure 35: Future potential energy mix in Community Renewables Scenario in 2040
                                                                                                                              • Figure 36: Forecast power generation installed capacity under “two degrees” scenario, by source, 2017-50
                                                                                                                              • Figure 37: Future potential energy mix in two degrees scenario in 2040
                                                                                                                              • Figure 38: Forecast power generation installed capacity under “steady Progression” scenario, by source, 2017-50
                                                                                                                              • Figure 39: Future potential energy mix in steady progression scenario in 2040
                                                                                                                              • Figure 40: Forecast power generation installed capacity under “consumer evolution” scenario, by source, 2017-50
                                                                                                                              • Figure 41: Future potential energy mix in consumer evolution scenario in 2040
                                                                                                                          • Energy Policy and Legislative Environment

                                                                                                                            • UK committed to reducing carbon emissions by 80% below 1990 levels by 2050
                                                                                                                              • UK currently on track to miss emission reduction targets between 2023 and 2032
                                                                                                                                • Policies to decarbonise electricity
                                                                                                                                  • Levy Control Framework
                                                                                                                                    • Renewables Obligation
                                                                                                                                      • Feed-in Tariffs
                                                                                                                                        • Carbon Price Floor
                                                                                                                                          • Contracts for Difference
                                                                                                                                            • Capacity Market
                                                                                                                                              • The Renewable Heat Incentive
                                                                                                                                              • Companies and Brands – What You Need to Know

                                                                                                                                                • Revenue growth in UK renewable energy sector slows in 2017 due to a drastic decline in solar PV sector
                                                                                                                                                  • UK offshore wind sector starts to attract a broadening investor pool
                                                                                                                                                    • Onshore wind industry currently restricted due to lack of government-backed routes to market
                                                                                                                                                      • BP invests in Lightsource to drive global solar expansion
                                                                                                                                                        • Biogen acquires Tamar Energy, creating one of the largest independent AD operators in the UK
                                                                                                                                                        • Industry Structure

                                                                                                                                                          • Overview
                                                                                                                                                            • Figure 42: UK turnover of renewable energy industry, 2013-17
                                                                                                                                                            • Figure 43: Employment in key renewable energy sectors, 2016-17
                                                                                                                                                          • Abrupt government policy changes result in many companies exiting UK solar PV sector
                                                                                                                                                            • Figure 44: Employment and number of companies active across UK solar PV supply chain, 2012-17
                                                                                                                                                            • Figure 45: UK solar PV sector turnover, 2012-17
                                                                                                                                                          • Offshore wind industry continues to expand at pace
                                                                                                                                                              • Figure 46: UK offshore wind sector turnover, 2012-17
                                                                                                                                                              • Figure 47: Employment and number of companies active across UK offshore wind supply chain, 2012-17
                                                                                                                                                            • Onshore wind industry set to be restricted in the short term due to lack of government-backed routes to market
                                                                                                                                                                • Figure 48: UK onshore wind sector turnover, 2012-17
                                                                                                                                                                • Figure 49: Employment and number of companies active across UK onshore wind supply chain, 2012-17
                                                                                                                                                            • Company Profiles

                                                                                                                                                              • Biogen (UK)
                                                                                                                                                                • Biogen (UK) purchased by Ancala Bioenergy in 2017
                                                                                                                                                                  • Biogen acquires Tamar Energy, creating one of the largest independent AD operators in the UK
                                                                                                                                                                    • Company performance
                                                                                                                                                                      • Figure 50: Financial analysis of Biogen (UK), 2012-16
                                                                                                                                                                    • First Hydro Company
                                                                                                                                                                        • Figure 51: Financial analysis of First Hydro Company, 2013-17
                                                                                                                                                                      • Lightsource Renewable Energy Investment
                                                                                                                                                                        • BP invests in Lightsource to drive global expansion
                                                                                                                                                                          • Strategy
                                                                                                                                                                            • Recent UK company developments
                                                                                                                                                                              • Financial performance
                                                                                                                                                                                • Figure 52: Lightsource Renewable Energy Investments, 2016-17
                                                                                                                                                                              • ScottishPower Renewables
                                                                                                                                                                                • Financial performance
                                                                                                                                                                                  • Figure 53: Financial analysis of ScottishPower Renewables, 2013-17
                                                                                                                                                                                • SSE
                                                                                                                                                                                  • SSE and Npower in talks to merge retail businesses
                                                                                                                                                                                    • Renewable generation accounts for 28% of electricity output in 2017/18
                                                                                                                                                                                      • Company strategy
                                                                                                                                                                                        • Financial performance
                                                                                                                                                                                          • Figure 54: Financial analysis of SSE, 2014-18
                                                                                                                                                                                          • Figure 55: SSE revenue segmental analysis, 2018
                                                                                                                                                                                        • Vattenfall Wind Power
                                                                                                                                                                                          • Company outlook and strategy
                                                                                                                                                                                            • Financial performance
                                                                                                                                                                                              • Figure 56: Financial analysis of Vattenfall Wind Power, 2013-17
                                                                                                                                                                                            • Vestas-Celtic Wind Technology
                                                                                                                                                                                              • Recent company activity
                                                                                                                                                                                                • Company review and outlook
                                                                                                                                                                                                  • Financial performance
                                                                                                                                                                                                    • Figure 57: Financial analysis of Vestas-Celtic Wind Technology, 2013-17
                                                                                                                                                                                                • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                    • Abbreviations
                                                                                                                                                                                                      • Methodology
                                                                                                                                                                                                      • Further Sources and Contacts

                                                                                                                                                                                                        • Trade associations
                                                                                                                                                                                                          • The Anaerobic Digestion and Biogas Association
                                                                                                                                                                                                            • Energy UK
                                                                                                                                                                                                              • British Hydropower Association
                                                                                                                                                                                                                • British Photovoltaic Association
                                                                                                                                                                                                                  • Energy Networks Association
                                                                                                                                                                                                                    • Energy Industries Council
                                                                                                                                                                                                                      • Environmental Services Association
                                                                                                                                                                                                                        • European Solar Thermal Industry Federation
                                                                                                                                                                                                                          • European Wind Energy Association
                                                                                                                                                                                                                            • Micropower Council
                                                                                                                                                                                                                              • Office of Gas and Electricity Markets (Ofgem)
                                                                                                                                                                                                                                • Office of Gas and Electricity Markets - Scotland (Ofgem Scotland)
                                                                                                                                                                                                                                  • Renewable Energy Association
                                                                                                                                                                                                                                    • SolarPower Europe
                                                                                                                                                                                                                                      • Solar Trade Association
                                                                                                                                                                                                                                        • Trade magazines
                                                                                                                                                                                                                                          • Energy Now
                                                                                                                                                                                                                                            • Real Power
                                                                                                                                                                                                                                              • Renewable Energy Focus
                                                                                                                                                                                                                                                • Renewable Energy Installer
                                                                                                                                                                                                                                                  • Resource
                                                                                                                                                                                                                                                    • Solar Business Focus
                                                                                                                                                                                                                                                      • Solar UK
                                                                                                                                                                                                                                                        • Solar International
                                                                                                                                                                                                                                                          • Wind Energy Network
                                                                                                                                                                                                                                                            • Wind Power Monthly
                                                                                                                                                                                                                                                              • Trade events
                                                                                                                                                                                                                                                                • All-Energy Exhibition & Conference Aberdeen
                                                                                                                                                                                                                                                                  • edie live 2019
                                                                                                                                                                                                                                                                    • Future Resource Expo
                                                                                                                                                                                                                                                                      • Offshore Europe
                                                                                                                                                                                                                                                                        • Solar & Storage Live