DPS0032
Written evidnece submitted by BP
Lightsource bp is a global leader in the development and management of solar energy projects, started and headquartered in the United Kingdom. We are a 50:50 joint venture with bp with a mission to help drive the world’s transition to net zero. We have spent over a decade driving solar forward, from development right through managing and operating solar projects across our global portfolio. Since 2010 the company has expanded its presence to 19 countries across the world and to date has developed hundreds of solar projects, with a total energy capacity of 8.8GW.
The company are firmly committed to contributing to the achievement of the climate and clean energy objectives of the United Kingdom, which is evidenced by its current growth ambition as it is now aiming to deliver 25GW of developed projects by 2025.
Lightsource bp welcomes the opportunity to provide evidence to the Public Accounts Committee following its review of the National Audit Office investigation on Decarbonising the Power Sector.
Lightsource bp has framed its response against the NAO recommendations.
In summary, Lightsource bp agrees that there are fundamental changes required for the Department for Energy Security and Net Zero (DESNZ) to oversee the UK’s Government’s Net Zero targets being implemented, specific to solar is the 70GW target by 2035. Lightsource bp is keen to be engaged in the discussion on further consultations across Government.
The Chris Skidmore Mission Zero independent review identified the opportunity for Net Zero investment in the UK to be £1 trillion by 20301. Lightsource bp is committed to contributing to that growth trajectory and commends the Government for its support of the growth of the renewables sector and in being the first country to make Net Zero a legally binding commitment.
However, there is concern in industry about the investment climate in the UK. Significant global headwinds including the continuing impact of Covid on supply chains, the Ukraine war, and inflation have not been conditions of the UK’s making, however policy decisions such as the Energy Generator Levy (EGL) which deals renewables an uneven hand compared to the Oil and Gas sector (via the availability/non-availability of tax allowances for investment) sends the wrong message to the private sector, albeit we understand the EGL is not in scope for this review.
A recent Energy UK paper2 estimates that UK Net Zero targets will require £1.3 trillion of investment, of which £500 billion will have to come from the private sector in investment in network and electricity supply; the harsh UK economic conditions, especially in the face of moves to support Net Zero Investment elsewhere (the USA and EU particularly), the same paper warns the UK is set to miss out on £62 billion of investment in the UK economy between now and 2030. This would equate in a failure to build 54GW of wind and solar generation this decade, which is the same capacity as the current annual usage of every UK household.
As per the above Lightsource bp is committed to developing solar in the UK, it is a home-grown success story; having started in London with 6 people in 2010 it is now the largest European developer, and third largest in the world, with over 1000 people in 19 countries.
Appended to the paper there is a two pager on Solar facts and benefits for further reference also.
- “Establish how it will ensure the system is resilient to prolonged periods of low generation from renewables”
LSbp Response:
LSbp sees the combination of short, medium and long duration storage as essential to achieving this goal in a decarbonised energy system. We encourage the continuation of current structures which incentivise short duration storage (up to 4 hours in the current Capacity Market) but would push for further thought & incentive to be considered for medium and long duration projects. With sufficient storage across the UK and Europe the energy system could be managed in a similar manner to that of the current gas market with commercial incentives to transfer stored energy to countries with low renewable output at that time. This should help improve overall system resilience for the UK and other markets. The UK is becoming increasingly interconnected with a range of European markets giving it an opportunity to be uniquely positioned to offer medium & long duration storage as services to other markets in the future.
- “Within 12 months, review plans for achieving its ambitions for offshore wind and nuclear power expansion”
LSbp Response:
Lightsource bp would strongly encourage that DESNZ includes a review of the plans for achieving its ambitions for solar also. In particular Lightsource bp encourages DESNZ to work to ensure all Government departments are aligned to the 70GW by 2035 target.
For example Lightsource bp noted the intention to bring forward further changes to the National Planning Polciy Framework (NPPF) following the passing of the Levelling Up and Regeneration Bill in 2023. Lightsource bp welcomes this. However, it is critical to the UK’s adaptation to climate change, the achievement of national Carbon Net Zero obligations, and local climate change emergency commitments, that planning policy goes further (than its current version and the changes proposed in this consultation) to plan positively for all renewable energy types, including ground-mounted solar installations.
Lightsource bp strongly recommended that the NPPF is revised so that there is clear alignment with the rhetoric set out in other planning documents such as the draft National Policy Statements for Energy (NPS), which were published in 2021. Whilst we note these are yet to be adopted, it was recently announced that the Government intends to prioritise adoption of these in 2023. The draft NPS set out clearly the urgency with which renewable energy needs to be deployed (Policy EN-1 paras 2.3.2 - 2.3.5), as well as outlining the key characteristics that are essential in the site selection process, namely the proximity to a viable grid connection (Policy EN-3 paras 2.48.10 - 2.48.12). There should be alignment throughout all Government documentation, and as noted in EN-1, “meeting these objectives necessitates a significant amount of energy infrastructure, both large and small-scale", and as such, this positive policy guidance should not be limited to NPS.
In addition, it is considered that further certainty should be provided with regard to impacts of renewable energy developments and whether they can be made acceptable. For example, the recently adopted NPF4 in Scotland states at Policy 11 that “project design and mitigation will demonstrate how the following impacts are addressed - significant landscape and visual impacts, recognising that such impacts are to be expected for some forms of renewable energy. Where impacts are localised and/or appropriate design mitigation has been applied, they will generally be considered to be acceptable”. It is considered that clear guidance such as this will help the decision-making process and provide clear guidance for local planning authorities, where at present it is too vague.
Another example of recommended alignment across the UK is the Scottish Government’s recently adopted National Planning Framework 4 (NP4) which is very positively worded and we would advise that this is used as an example of how policy should be drafted going forward. It defines renewable energy proposals (included non-generating infrastructure such as battery storage) as ‘essential infrastructure’.
For the UK to reach its Net Zero targets alignment across Government is key in the view of Lightsource bp.
- “Ensure it has understood the main links between different aspects of decarbonisation and sets out in advance how these will be managed.”
LSbp Response:
As identified in this recommendation ensuring the “network capacity keeps pace with expanding generation” is a key issue for DESNZ to resovle. Lightsource bp is currently receiving Grid Offers for 2035 and beyond which obviously will not enable us to contribute any new prokects to the 70GW by 2035 targets. Grid Capacity is one of the biggest problems facing the sector today. Lightsource bp recommends making better use of existing capacity as well as allowing TOs and DNOs to have more freedom to invest in strategic improvements.
For example: Incentivise TSO/DNO Operators To Maximise Existing Grid Capacity
Grid operation remuneration methodologies should incentivise TSO/DNO operators maximising the use of the existing grid. Instead of the current TOTEX based remuneration schemes, grid operator remuneration should reflect the high value of grid use maximisation by remunerating based on how the grid operator has efficiently avoided network reinforcement costs by providing for flexibility arrangements, handled curtailment, presented customers with transparent data, etc. A good source of inspiration for this change should be the RIIO-ED2 framework which has been proposed by Ofgem in the UK and, in particular, the outturn performance metrics of the financial incentive framework.
For example: Allow TOs/DNOs to Make More Strategic Investments
To date TO/DNOs have planned and allocated upgrade investment on a reactive basis, whilst RIIO-ED2 is a good framework Ofgem should give the DNOs more freedom in terms of not locking them down to the allocated TOTEX should the circumstances mean the DNOs need to invest more holistically.
Lightsource bp would welcome the above consideration being put to DESNZ.
- “Review the capability of its modelling to refine and update the most cost‑effective system-wide approach to achieving net zero, including power sector decarbonisation”
Lightsource bp welcomes this recommendation.
- “Establish a set of clear measures of overall progress, and some interim milestones towards power sector decarbonisation”
Lightsource bp welcomes this recommendation.
- “Establish arrangements to understand and respond to system-wide risks and opportunities, to ensure its plan is resilient to setbacks, disruption and future uncertainty”
Lightsource bp welcome this recommendation.
References
1 Rt Hon Chris Skidmore (2023), ‘Mission Zero’, (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1128689/mission-zero-independent-review.pdf)
2 Energy UK (2023), ‘Storms Approaching: How to prevent an investment hiatus in UK low-carbon generation (https://www.energy-uk.org.uk/index.php/publication.html?task=file.download&id=8423)
Solar in the UK – The Facts
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Solar must be a key part of the energy mix
- The UK is committed to tackling climate change and net zero by 2050 and to decarbonising the electricity system by 2035, underpinned by 70GW solar target.
- Costs have fallen 80% since 2010 & solar is one of the cheapest sources of electricity (IEA).
- The solar industry is capable of rapid growth & deployment without subsidies.
- More solar on the grid = less reliance on imported fossil fuels = lower and more predictable energy pricing.
The UK needs more than just rooftop solar
- Rooftop alone is not enough to achieve a true transformation of the energy system. Utility-scale ground-based solar will also be necessary to achieve net zero and energy security.
- Residential rooftop solar is 5x as expensive as utility-scale ground-based solar due to economies of scale.
Solar brings sustainability benefits
- Solar is proven to bring significant benefits to their local areas:
- Well-designed projects have been shown to significantly improve local biodiversity, in turn helping to respond to the biodiversity crisis.
- Solar reduces CO2 emissions.
- Solar creates jobs - 40GW of solar = 35,000 new UK jobs by 2030.
Solar is not a threat to food security
- British solar and British farming have gone hand-in-hand since the beginning of the UK solar industry.
- Solar doesn’t need much land overall. Solar currently takes up 0.08% of land, and meeting the solar target would only need about 0.5%.
- Solar farms support continued agricultural production, such as grazing of sheep.
- Solar leases provide secure income for farmers and their families.
Solar safeguards the land
- Solar developments do not have a long-term impact on land quality.
- Solar farms are temporary and can be completely dismantled at the end of their life with the land returned to original state, unlike other forms of energy production.
- The extended fallow period enables the
recovery of soil health, addressing the degradation of many years of ploughing arable land.
- Visual impacts can be mitigated through natural screening including hedgerows, shrubs, and trees.
There’s a lot of support for solar in the UK
- A large majority of the British public supports renewables development. Communities local to solar farms tend to be the most supportive of solar.
- Polling from Public Attitudes Tracker showed 88% of people support renewable energy in the UK, including solar, whilst only 2% of the public oppose it.
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Additional benefits of solar in the UK
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Multi land use
Clean energy, habitat conservation and enhancement, and agriculture, including grazing and cropping can co-exist. The actual footprint of a solar infrastructure only covers around 5% of the site area.
Sheep
Solar farms can provide good grassland for grazing and shelter for sheep, which in turn eliminates or reduces the need to mow the grass under the panels.
Beekeeping
Solar projects are ideal habitats for beekeeping, contributing additional pollinator services to local farmland, which could increase food production.
Biodiversity enhancements
With appropriate approaches to land management, land used for solar can yield significantly higher levels of biodiversity than comparable land without solar, benefiting birdlife, hedgehogs, bees (see above) and other pollinators.
Jobs
With responsible procurement and recruiting processes, solar projects can create jobs during construction, by hiring local subcontractors and recruiting from the local labour pool.
Tax revenue
All solar projects in the UK pay business rates, 100% of which are kept by the Local Authority. This benefits local schools, street maintenance, fire stations, parks and other community public services.
Supporting the rural economy
Land is leased by solar developers from local landowners. This provides farming families with a new source of reliable revenue for up to 40 years, enabling landowners to keep farming the land and keep it in the family.
Educational opportunities
Due to the passive nature of the technology, solar projects can provide safe education opportunities for local schools, universities and groups.
Community benefit
As part of most solar development applications, developers are encouraged to provide a level of community benefit in the form of funds to local councils and groups.
March 2023
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