Those who back renewable energy investments now will play a major role in Britain’s green energy revolution, says Alex Brierley, co-head of Octopus Energy Generation’s fund management business.
The UK is at the precipice of a colossal opportunity to accelerate its journey to a clean energy future. Electricity demand is set to triple by 2050 and the need to wean ourselves off expensive imported fossil fuels couldn’t be more pressing.
Renewable energy infrastructure is central to the UK Government’s growth plans for Britain and meeting net zero. We’re talking about a major shift that’s not just vital for slashing emissions – it’s also the gateway to ensuring energy security, creating future-proofed jobs, and boosting economic growth.
For institutional investors, this isn’t just another sector to invest in – it’s a one-in-a-lifetime opportunity to be a part of leading the green energy revolution.
With the UK government’s clear vision for the country to become a clean energy superpower, the route ahead couldn’t be clearer. Those who back renewables now will play a crucial role in driving this economic transformation, making a truly positive contribution to net zero and delivering low cost electricity to homes and businesses.
Scaling wind and solar power for growth
Significant progress has been made in British renewables, and it already has one of the world’s leading offshore wind programmes. For the UK to meet its net-zero targets, renewable projects must be scaled even faster.
The government’s bold targets to double onshore wind, triple solar power and quadruple offshore wind capacity by 2030 mark a prime opportunity for investors to back projects that deliver long-term returns.
We’re seeing the winds of change. The Labour government came in over summer with quick changes to speed up deployment of renewables. Policymakers and regulators are understanding the urgency and it’s clear that the UK is a brilliant place to invest in renewables now more than ever.
With the increasing adoption of electric vehicles (EVs), we are sitting on a major opportunity to utilise the batteries sitting in people’s cars on their driveways to store cheap green power.
The planning reforms the Government implemented quickly once elected over summer mean that onshore wind in particular – one of the most affordable energy sources – will see major growth. After a de facto ban for nearly a decade in England, onshore wind can now play an even greater role in the UK’s energy mix. This opens up new avenues for institutional capital to flow into the sector and further boost British energy security.
The role of energy storage
As the share of renewable energy in the UK grid grows, energy storage solutions will become an important piece of the puzzle. This technology will play a pivotal role in balancing an increasingly renewable-heavy grid. When wind and solar power are abundant, batteries can store excess electrons generated and release it during times of increased demand.
With the increasing adoption of electric vehicles (EVs), we are sitting on a major opportunity to utilise the batteries sitting in people’s cars on their driveways to store cheap green power. Into the future, this will play an even bigger role as more people opt for EVs.
Ultimately, energy storage offers attractive growth potential within the green energy landscape and is essential to the full-scale integration of renewables in the UK.
Overcoming grid challenges
The growth of British renewables has been monumental – and now we need to ensure that new projects in the pipeline can connect to the grid quickly too. The next frontier is to break down barriers regarding long grid connection waiting times. We need to see a major change in pace.
Today’s grid was built for fossil fuels, so we can’t simply make small tweaks when the underlying fundamentals are so different. We need to be thinking about this completely differently and with a digital-first focus.
It’s integral to also be thinking more about demand flexibility. We’re shifting to a world where demand is responding to generation, not the other way around. And this is a brilliant thing. An active demand-side, so having households and businesses respond to times when there’s an abundance of green electrons in the grid and at times when there is less, is the key to this all.
Expanding grid infrastructure so we can connect new renewables quickly – and using our current grid infrastructure more flexibly – is critical for the clean energy transition.
An optimistic future
The UK’s renewable energy goals are ambitious – but they offer a clear roadmap for investors ready to fuel Britain’s shift to clean energy.
By aligning investment strategies with the UK’s climate goals, institutional investors aren’t only driving returns, but are catalysing a shift that will be sustainable, resilient and low-cost for the end consumer.
This new world won’t just have better technology and be better for the planet, it will be cheaper for customers too. The future is green and it is well underway – now investors can play an even greater role in making it happen quicker than ever before.
*Alex Brierley is co-head of Octopus Energy Generation’s fund management business.