United Kingdom Renewable Energy Market - Growth, Trends, and Forecast (2020-2025)
The market is segmented by Source (Wind, Solar, Bioenergy, and others)
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Scope of the report
Key Market Trends
TABLE OF CONTENTS
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The market for offshore wind energy in the United Kingdom is expected to grow at a CAGR of more than 9% in the forecast period of 2020-2025. Factors such as supportive government policies and efforts to meet the rising power demand using renewable energy sources and to decrease dependency on fossil fuels in order to reduce carbon emissions are significant contributors to the growth of the market. The declining costs of renewable technologies are becoming competitive with fossil fuel sources, and additional subsidies on renewables are driving the market further. Even with a flourishing renewable market, the high initial investment for the installation of renewable sources along with the development of new grid structure and energy storage systems for both offshore and onshore projects are few factors that can restrain the renewable market of the United Kingdom.
With the most cost-effective way of power generation, wind energy is leading the renewable energy market in the country. Moreover, with an installed capacity of more than 57 GW in 2018, the United Kingdom is the primary producer of wind power in Europe.
With ambitious offshore wind energy targets in place by 2030, huge market opportunities exist for wind energy market companies in the near future.
The introduction of Feed-in Tariff (FIT) provided a boost to solar installations till mid-2019. Later with an increment of VAT from 5% to 20% on solar pnels, the growth of solar power is expected to be hampered.
Scope of the report
The United Kingdom renewable energy market report include:
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Key Market Trends
Increasing Deployment of Wind Energy to Drive the Market
The United Kingdom is leading the globe in terms of offshore wind energy with an installed capacity of more than 8500 MW in 2019. With several ambitious projects already in the development phase, the government is aiming to reach 20000 MW by the end of 2030.
After the successful installation of East Anglia One offshore wind farm with a capacity of 714 MW, the United Kingdom government is all set for the development of East Anglia Two and East Anglia Three with capacities of 900 MW and 1400 MW respectively.
In 2018, wind energy produced 57.1 TWh of electricity with an installed capacity of more than 20 GW, contributing 17% of the entire United Kingdom’s power demand. Out of 17%, offshore wind energy accounted for 8%, whereas onshore provided the rest 9%.
With another significant installation, Hornsea one, which is estimated to be operational by 2020, the United Kingdom will be operating the world’s largest offshore wind farm with a capacity of more than 1.2 GW generated by 174 turbines.
Therefore the high growth rate of wind energy makes the United Kingdom one of the leaders in the renewable market and driving towards a green future.
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Varying Policies of the United Kingdom Government
The United Kingdom regulated Feed-in Tariff in 2010. This boosted the installation of solar panels at a tremendous rate, increasing the solar electricity from 4TWh in 2014 to 13 TWh in 2018. But in March 2019, the government closed this scheme, which is expected to affect the growth of the solar market in the United Kingdom.
In June 2019, the government of the United Kingdom passed a law committing to achieve net-zero carbon emissions by 2050. For this, The United Kingdom is going to rely heavily on renewable like solar and wind.
With the discontinuation of Feed-in Tariff, the government introduced Smart Export Guarantee (SEG) modifying the FIT, which makes the energy suppliers pay the customers for every unit they are going to feed in the grid, although the energy suppliers are free to decide the rate for exported power.
From October 2019, the United Kingdom government increased the Value added tax (VAT) on Energy Saving Materials (ESM) by 15%. With incremented VAT, the customers must pay a 20% tax on solar and storage affecting installers, which is going to increase net installation cost significantly. Considering the recent 20% VAT on the high installation cost of solar, public interest in the solar market can be affected negatively.
The United Kingdom government’s policies and regulations are one of the significant factors that will be deciding the future of the renewable market in the United Kingdom. These different strategies can drive the market growth in either way.
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The United Kingdom renewable energy market is partially fragmented. Some of the major companies include Vestas Wind Systems A/S, Siemens Gamesa Renewable Energy SA, Electricite de France SA , Renewable Energy Systems Ltd., and Ecotricity Group Ltd.