Financing net zero panel advises policymakers for a long-term view of net zero to boost merchant renewable confidence

Last Thursday’s ‘Financing net zero forum’ brought together 580 registered attendees across the renewables sector to listen to the expert panel discuss managing renewable merchant risk. Joining the chair of the meeting were experts from across the industry, with Shoosmiths sponsoring the afternoon discussions.

Merchant renewables – the development of renewable assets without direct support through policy or subsidy – have faced an interesting year, with the pandemic creating a unique set of circumstances.

Across the panel, there was a consensus that the pandemic gave us a glimpse of what a managed net zero system would look like. This has drawn attention to the situation of renewables in the market, with price volatility, price cannibalisation and curtailment all heightened during this time.

It was no surprise to the panel that these issues were major concerns of the attendees. They expressed the hope that developers and investors can and will “get comfortable” with this new market and its problems. The undercurrent of instability in the industry from a policy and regulatory perspective makes this difficult for merchant renewables to manage.

The panel argued that the many industry institutions from the government through to National Grid should consider how we transition to net zero and the look of future market design. However, they praised the ambition and recognised the need for a coherent strategy. The panel was concerned that the institutions run the risk of reducing confidence in the market they want to bolster without the connected thinking. But they agreed that a more joined-up approach between the relevant institutions would give those developing and investing some stability and confidence.

It may be up to the government to take the lead, the panel suggests, by boosting coordination among different parties to ensure a longer-term view is taken to create more certainty and confidence in a rapidly evolving landscape. This will, in turn, help mitigate some of the risk currently being faced by merchant renewables. According to the panel, the benefits will transcend not just investors and developers. The government will be able to “piggyback” off them with green economic recovery and boost green jobs.

Overall, Great Britain is going to have a more renewables dominated system. While the developer appetite is there, and the pipeline is growing considerably, the panel mentioned a lack of a clear long-term view and a misalignment to the net zero goals. They called on the government to create an actionable net zero roadmap for the decades ahead to boost investors and developers’ confidence.

If you are interested in this topic or would like to attend one of our ‘Financing net zero’ forums, please contact Tom Ross on t.ross@cornwall-insight.com.

Related thinking

Commercial and market outlook

What to look out for in 2024

Cornwall Insight experts provide their predictions for the year ahead in this handy infographic. We have collated some predictions from across our knowledge base to provide a quick snapshot of what to look out for in the GB energy market in 2024. The key highlights include the global discussion on...

E-mobility and low carbon

Paving the way: EV Country Attractiveness Index findings

Following the previous iteration of the EVCA Index, published in September 2023, the EV market has continued to grow across Europe. From October 2022 to October 2023, the EU, Norway, and the UK have seen a combined 29% year-on-year increase in battery electric vehicle (BEV) sales. Cornwall Insight have partnered...

E-mobility and low carbon

Driving growth: EV Country Attractiveness Index findings

Since the previous iteration of the EVCA Index, published in June 2023, there have been some changes to the electric vehicle (EV) landscape. The EV market has continued to grow with battery electric vehicle (BEVs) sales increasing across Europe. Cornwall Insight have partnered with law firm Shoosmiths to create the...

Announcement

2022/23 Australian energy insights report

Analytics on key current developments in the Australian energy industry Cornwall Insight Australia has released its latest compilation of Australian energy insights, charts, and analyses. The report includes the topics of energy storage and flexibility, generation (all technologies), power prices, low carbon generation, FCAS, policy and regulation, electric vehicles, and...

E-mobility and low carbon

Charging forward: EV Country Attractiveness Index Findings

Since the previous iteration of the EVCA Index, published in March 2023, there have been some changes to the EV landscape. New countries have emerged as leaders in battery electric vehicle (BEV) growth while others have continued to develop their charging networks and maintain economic strength at a time when...

Home supply and services

Generation guaranteed: suppliers increase Smart Export Guarantee rates  

The Smart Export Guarantee (SEG), as the successor to the Feed-in Tariff (FiT) scheme, offers payments to small-scale low-carbon generators for the electricity they export, with export rates and tariffs being set by SEG licensees. Since the new year we have seen notable increases and changes in the export rates...

E-mobility and low carbon

Ending the ICE age: EV Country Attractiveness Index Findings

Over the past decade, electric vehicles (EVs) have become increasingly popular across many of the world’s major economies, with both the eco-conscious and average consumer adding to the rise in sales. This phenomenon has not just appeared from thin air, however, as international climate agreements, national net zero plans, EV...

Net zero corporates and ESG

Help us understand your business decarbonisation challenges

Are you a large business impacted by the challenge of increasing energy costs and decarbonisation targets? If the answer is yes, then we’d love your help to find out more about the challenges you are facing. We recently published an insight paper on the challenging economic climate that businesses are...