Basking in the sun: nine solar policy essentials
Learn moreInstitutional Investments
New Year, New Solar: Transforming the UK energy landscape by 2030
20/1/25
15 min
Renewable energy
Insight
As we kick start our resolutions and plans for 2025, foremost in my mind is the government’s Clean Power Action Plan and the breathtaking scale and pace of reform in our sector. The Plan, published on 13 December, sets out a range of policy measures for the successful delivery of the Clean Power Mission to ensure that 95% of total electricity generation is clean (i.e. fossil-fuel free) by 2030. This target is extremely challenging; in solar alone it will require a threefold increase in solar electricity generation in five years from 15 GW today, to 45-47 GW in 2030.
The Plan is structured to directly address many of the barriers faced by the kinds of projects Downing develops and it goes much further than recent governments in proposing holistic solutions.
Will it achieve what it is aiming to? I hope so. From my perspective, though, I don't think it is important to achieve everything by the arbitrary date of 2030; what is important is that we try to and that we get there eventually in a way that is affordable and has the full support of the Nation.
Changes needed to the planning system
On planning, the Plan acknowledges that the system - at all levels - is not delivering effectively for the clean power agenda and that change will require radical action that goes beyond revisions to planning frameworks and regimes or process streamlining. Proposals include significant change to the planning framework to dramatically improve the process for critical energy infrastructure (the Planning and Infrastructure Bill is due out soon) and the inclusion of solar projects above 100MW in the nationally significant infrastructure regime, recognising their criticality to UK energy supply. There is also an explicit focus on ensuring the revised frameworks prioritises those projects that will deliver for 2030.
At the same time, it is recognised that it is crucially important to also give the consenting planning authorities the right tools and resources. A budget has been allocated for planner recruitment and training in local and central government. Work will be done to expand all cost recovery mechanisms to put consenting organisations on a sustainable financial footing.
The focus on planning is very welcome. I do, however, have some reservations. The move to include more projects in the Town & Country planning regime and less in the Nationally Significant Infrastructure Project regime is predicated on the local planning regime operating effectively. It is not.
The success of this move is dependent on sweeping reform.
The focus on recruitment and training of local planning officers is a great initiative, but it assumes that local planning committees follow their recommendations. Our experience is that they frequently do not. Our experiences of the long delays in the current planning process is that many of the statutory consultees are struggling to cope with the demands placed on them alongside their day jobs. A failure to focus on this element will simply move the indigestion in the system to a different spot.
Improving grid connections
Building on the action already taken by government and the regulator to streamline the connections queue, the Plan promises the continued development of a prioritised grid queue, not just by removing unviable projects but also by ensuring that technological and locational factors are built into the process to connect the right projects at the right time and to prioritise the projects that deliver for 2030. Updated grid connection offers will be issued during the course of 2025, and the intention is to also include in the queue any project that has been awarded a Contract for Difference (provided it has met the Gate 2 Readiness Criteria).
Unlocking solar energy potential
For the solar sector specifically, there is an acknowledgement of the need to create more opportunities for solar installations. The Solar Roadmap will soon be published with actions to unlock the potential for rooftop solar installation on commercial and industrial buildings. A call for evidence will be launched looking at the potential for solar panels in carparks. For homes the government will set out a position on whether to mandate solar for future homes standard, and in the spring, after phase 2 of the Spending Review a decision will be made on whether support for solar will be included in the Warm Homes Plan.
Reforming Contracts for Difference (CFD)
The government recognises that reform is needed to Contracts for Difference, the key financial support mechanism for large renewable projects, to remove some of the uncertainty and to give greater line of sight to the industrial strategy. A key challenge here will be reforming the mechanism to bring forward additional projects, whilst minimising costs for consumers. A new consultation on CFD reform will be issued in early 2025 and will consider, amongst other things, the implementation of auction schedule to increase certainty, a review of auction parameters and changes to CFD contract terms (including the merits of increasing the CFD term above 15 years).
Getting the public behind the Plan
Finally, the government has announced the launch of a new campaign to increase public awareness of the importance of network infrastructure and to enhance community benefits for people living near onshore energy infrastructure.
Public support for the Plan is absolutely critical and I was heartened to see this as one of the first 3 areas of focus of the DESNZ select committee.
A promising future for clean power?
So, will all this effort enable us to hit the 2030 target? Without question, the Clean Power Mission and its Action Plan has created more clarity on policy and interest for investors in this sector, including investors from overseas. Given our experience in managing investments in the UK energy space, we are confident that the Clean Power Mission will further increase investment appetite in the UK market in the medium term.
However, this leaves us with a tricky 2025. The pace and scale of reform is unprecedented and is introducing considerable uncertainty. Plans are changing as the weeks pass and the roadmap is unfurled. We look forward to seeing who will navigate the best course through a challenging 2025.
If you’d like to discuss any of the topics raised throughout the article, please get in touch.
Share
Contents
See full contents
Tom Williams explores the government’s ambitious Clean Power Action Plan and its transformative potential to drive a fossil-free energy system by 2030.
As we kick start our resolutions and plans for 2025, foremost in my mind is the government’s Clean Power Action Plan and the breathtaking scale and pace of reform in our sector. The Plan, published on 13 December, sets out a range of policy measures for the successful delivery of the Clean Power Mission to ensure that 95% of total electricity generation is clean (i.e. fossil-fuel free) by 2030. This target is extremely challenging; in solar alone it will require a threefold increase in solar electricity generation in five years from 15 GW today, to 45-47 GW in 2030.
The Plan is structured to directly address many of the barriers faced by the kinds of projects Downing develops and it goes much further than recent governments in proposing holistic solutions.
Will it achieve what it is aiming to? I hope so. From my perspective, though, I don't think it is important to achieve everything by the arbitrary date of 2030; what is important is that we try to and that we get there eventually in a way that is affordable and has the full support of the Nation.
Changes needed to the planning system
On planning, the Plan acknowledges that the system - at all levels - is not delivering effectively for the clean power agenda and that change will require radical action that goes beyond revisions to planning frameworks and regimes or process streamlining. Proposals include significant change to the planning framework to dramatically improve the process for critical energy infrastructure (the Planning and Infrastructure Bill is due out soon) and the inclusion of solar projects above 100MW in the nationally significant infrastructure regime, recognising their criticality to UK energy supply. There is also an explicit focus on ensuring the revised frameworks prioritises those projects that will deliver for 2030.
At the same time, it is recognised that it is crucially important to also give the consenting planning authorities the right tools and resources. A budget has been allocated for planner recruitment and training in local and central government. Work will be done to expand all cost recovery mechanisms to put consenting organisations on a sustainable financial footing.
The focus on planning is very welcome. I do, however, have some reservations. The move to include more projects in the Town & Country planning regime and less in the Nationally Significant Infrastructure Project regime is predicated on the local planning regime operating effectively. It is not.
The success of this move is dependent on sweeping reform.
The focus on recruitment and training of local planning officers is a great initiative, but it assumes that local planning committees follow their recommendations. Our experience is that they frequently do not. Our experiences of the long delays in the current planning process is that many of the statutory consultees are struggling to cope with the demands placed on them alongside their day jobs. A failure to focus on this element will simply move the indigestion in the system to a different spot.
Improving grid connections
Building on the action already taken by government and the regulator to streamline the connections queue, the Plan promises the continued development of a prioritised grid queue, not just by removing unviable projects but also by ensuring that technological and locational factors are built into the process to connect the right projects at the right time and to prioritise the projects that deliver for 2030. Updated grid connection offers will be issued during the course of 2025, and the intention is to also include in the queue any project that has been awarded a Contract for Difference (provided it has met the Gate 2 Readiness Criteria).
Unlocking solar energy potential
For the solar sector specifically, there is an acknowledgement of the need to create more opportunities for solar installations. The Solar Roadmap will soon be published with actions to unlock the potential for rooftop solar installation on commercial and industrial buildings. A call for evidence will be launched looking at the potential for solar panels in carparks. For homes the government will set out a position on whether to mandate solar for future homes standard, and in the spring, after phase 2 of the Spending Review a decision will be made on whether support for solar will be included in the Warm Homes Plan.
Reforming Contracts for Difference (CFD)
The government recognises that reform is needed to Contracts for Difference, the key financial support mechanism for large renewable projects, to remove some of the uncertainty and to give greater line of sight to the industrial strategy. A key challenge here will be reforming the mechanism to bring forward additional projects, whilst minimising costs for consumers. A new consultation on CFD reform will be issued in early 2025 and will consider, amongst other things, the implementation of auction schedule to increase certainty, a review of auction parameters and changes to CFD contract terms (including the merits of increasing the CFD term above 15 years).
Getting the public behind the Plan
Finally, the government has announced the launch of a new campaign to increase public awareness of the importance of network infrastructure and to enhance community benefits for people living near onshore energy infrastructure.
Public support for the Plan is absolutely critical and I was heartened to see this as one of the first 3 areas of focus of the DESNZ select committee.
A promising future for clean power?
So, will all this effort enable us to hit the 2030 target? Without question, the Clean Power Mission and its Action Plan has created more clarity on policy and interest for investors in this sector, including investors from overseas. Given our experience in managing investments in the UK energy space, we are confident that the Clean Power Mission will further increase investment appetite in the UK market in the medium term.
However, this leaves us with a tricky 2025. The pace and scale of reform is unprecedented and is introducing considerable uncertainty. Plans are changing as the weeks pass and the roadmap is unfurled. We look forward to seeing who will navigate the best course through a challenging 2025.
If you’d like to discuss any of the topics raised throughout the article, please get in touch.
Share
Tom Williams explores the government’s ambitious Clean Power Action Plan and its transformative potential to drive a fossil-free energy system by 2030.
As we kick start our resolutions and plans for 2025, foremost in my mind is the government’s Clean Power Action Plan and the breathtaking scale and pace of reform in our sector. The Plan, published on 13 December, sets out a range of policy measures for the successful delivery of the Clean Power Mission to ensure that 95% of total electricity generation is clean (i.e. fossil-fuel free) by 2030. This target is extremely challenging; in solar alone it will require a threefold increase in solar electricity generation in five years from 15 GW today, to 45-47 GW in 2030.
The Plan is structured to directly address many of the barriers faced by the kinds of projects Downing develops and it goes much further than recent governments in proposing holistic solutions.
Will it achieve what it is aiming to? I hope so. From my perspective, though, I don't think it is important to achieve everything by the arbitrary date of 2030; what is important is that we try to and that we get there eventually in a way that is affordable and has the full support of the Nation.
Changes needed to the planning system
On planning, the Plan acknowledges that the system - at all levels - is not delivering effectively for the clean power agenda and that change will require radical action that goes beyond revisions to planning frameworks and regimes or process streamlining. Proposals include significant change to the planning framework to dramatically improve the process for critical energy infrastructure (the Planning and Infrastructure Bill is due out soon) and the inclusion of solar projects above 100MW in the nationally significant infrastructure regime, recognising their criticality to UK energy supply. There is also an explicit focus on ensuring the revised frameworks prioritises those projects that will deliver for 2030.
At the same time, it is recognised that it is crucially important to also give the consenting planning authorities the right tools and resources. A budget has been allocated for planner recruitment and training in local and central government. Work will be done to expand all cost recovery mechanisms to put consenting organisations on a sustainable financial footing.
The focus on planning is very welcome. I do, however, have some reservations. The move to include more projects in the Town & Country planning regime and less in the Nationally Significant Infrastructure Project regime is predicated on the local planning regime operating effectively. It is not.
The success of this move is dependent on sweeping reform.
The focus on recruitment and training of local planning officers is a great initiative, but it assumes that local planning committees follow their recommendations. Our experience is that they frequently do not. Our experiences of the long delays in the current planning process is that many of the statutory consultees are struggling to cope with the demands placed on them alongside their day jobs. A failure to focus on this element will simply move the indigestion in the system to a different spot.
Improving grid connections
Building on the action already taken by government and the regulator to streamline the connections queue, the Plan promises the continued development of a prioritised grid queue, not just by removing unviable projects but also by ensuring that technological and locational factors are built into the process to connect the right projects at the right time and to prioritise the projects that deliver for 2030. Updated grid connection offers will be issued during the course of 2025, and the intention is to also include in the queue any project that has been awarded a Contract for Difference (provided it has met the Gate 2 Readiness Criteria).
Unlocking solar energy potential
For the solar sector specifically, there is an acknowledgement of the need to create more opportunities for solar installations. The Solar Roadmap will soon be published with actions to unlock the potential for rooftop solar installation on commercial and industrial buildings. A call for evidence will be launched looking at the potential for solar panels in carparks. For homes the government will set out a position on whether to mandate solar for future homes standard, and in the spring, after phase 2 of the Spending Review a decision will be made on whether support for solar will be included in the Warm Homes Plan.
Reforming Contracts for Difference (CFD)
The government recognises that reform is needed to Contracts for Difference, the key financial support mechanism for large renewable projects, to remove some of the uncertainty and to give greater line of sight to the industrial strategy. A key challenge here will be reforming the mechanism to bring forward additional projects, whilst minimising costs for consumers. A new consultation on CFD reform will be issued in early 2025 and will consider, amongst other things, the implementation of auction schedule to increase certainty, a review of auction parameters and changes to CFD contract terms (including the merits of increasing the CFD term above 15 years).
Getting the public behind the Plan
Finally, the government has announced the launch of a new campaign to increase public awareness of the importance of network infrastructure and to enhance community benefits for people living near onshore energy infrastructure.
Public support for the Plan is absolutely critical and I was heartened to see this as one of the first 3 areas of focus of the DESNZ select committee.
A promising future for clean power?
So, will all this effort enable us to hit the 2030 target? Without question, the Clean Power Mission and its Action Plan has created more clarity on policy and interest for investors in this sector, including investors from overseas. Given our experience in managing investments in the UK energy space, we are confident that the Clean Power Mission will further increase investment appetite in the UK market in the medium term.
However, this leaves us with a tricky 2025. The pace and scale of reform is unprecedented and is introducing considerable uncertainty. Plans are changing as the weeks pass and the roadmap is unfurled. We look forward to seeing who will navigate the best course through a challenging 2025.
If you’d like to discuss any of the topics raised throughout the article, please get in touch.
Share
As we kick start our resolutions and plans for 2025, foremost in my mind is the government’s Clean Power Action Plan and the breathtaking scale and pace of reform in our sector. The Plan, published on 13 December, sets out a range of policy measures for the successful delivery of the Clean Power Mission to ensure that 95% of total electricity generation is clean (i.e. fossil-fuel free) by 2030. This target is extremely challenging; in solar alone it will require a threefold increase in solar electricity generation in five years from 15 GW today, to 45-47 GW in 2030.
The Plan is structured to directly address many of the barriers faced by the kinds of projects Downing develops and it goes much further than recent governments in proposing holistic solutions.
Will it achieve what it is aiming to? I hope so. From my perspective, though, I don't think it is important to achieve everything by the arbitrary date of 2030; what is important is that we try to and that we get there eventually in a way that is affordable and has the full support of the Nation.
Changes needed to the planning system
On planning, the Plan acknowledges that the system - at all levels - is not delivering effectively for the clean power agenda and that change will require radical action that goes beyond revisions to planning frameworks and regimes or process streamlining. Proposals include significant change to the planning framework to dramatically improve the process for critical energy infrastructure (the Planning and Infrastructure Bill is due out soon) and the inclusion of solar projects above 100MW in the nationally significant infrastructure regime, recognising their criticality to UK energy supply. There is also an explicit focus on ensuring the revised frameworks prioritises those projects that will deliver for 2030.
At the same time, it is recognised that it is crucially important to also give the consenting planning authorities the right tools and resources. A budget has been allocated for planner recruitment and training in local and central government. Work will be done to expand all cost recovery mechanisms to put consenting organisations on a sustainable financial footing.
The focus on planning is very welcome. I do, however, have some reservations. The move to include more projects in the Town & Country planning regime and less in the Nationally Significant Infrastructure Project regime is predicated on the local planning regime operating effectively. It is not.
The success of this move is dependent on sweeping reform.
The focus on recruitment and training of local planning officers is a great initiative, but it assumes that local planning committees follow their recommendations. Our experience is that they frequently do not. Our experiences of the long delays in the current planning process is that many of the statutory consultees are struggling to cope with the demands placed on them alongside their day jobs. A failure to focus on this element will simply move the indigestion in the system to a different spot.
Improving grid connections
Building on the action already taken by government and the regulator to streamline the connections queue, the Plan promises the continued development of a prioritised grid queue, not just by removing unviable projects but also by ensuring that technological and locational factors are built into the process to connect the right projects at the right time and to prioritise the projects that deliver for 2030. Updated grid connection offers will be issued during the course of 2025, and the intention is to also include in the queue any project that has been awarded a Contract for Difference (provided it has met the Gate 2 Readiness Criteria).
Unlocking solar energy potential
For the solar sector specifically, there is an acknowledgement of the need to create more opportunities for solar installations. The Solar Roadmap will soon be published with actions to unlock the potential for rooftop solar installation on commercial and industrial buildings. A call for evidence will be launched looking at the potential for solar panels in carparks. For homes the government will set out a position on whether to mandate solar for future homes standard, and in the spring, after phase 2 of the Spending Review a decision will be made on whether support for solar will be included in the Warm Homes Plan.
Reforming Contracts for Difference (CFD)
The government recognises that reform is needed to Contracts for Difference, the key financial support mechanism for large renewable projects, to remove some of the uncertainty and to give greater line of sight to the industrial strategy. A key challenge here will be reforming the mechanism to bring forward additional projects, whilst minimising costs for consumers. A new consultation on CFD reform will be issued in early 2025 and will consider, amongst other things, the implementation of auction schedule to increase certainty, a review of auction parameters and changes to CFD contract terms (including the merits of increasing the CFD term above 15 years).
Getting the public behind the Plan
Finally, the government has announced the launch of a new campaign to increase public awareness of the importance of network infrastructure and to enhance community benefits for people living near onshore energy infrastructure.
Public support for the Plan is absolutely critical and I was heartened to see this as one of the first 3 areas of focus of the DESNZ select committee.
A promising future for clean power?
So, will all this effort enable us to hit the 2030 target? Without question, the Clean Power Mission and its Action Plan has created more clarity on policy and interest for investors in this sector, including investors from overseas. Given our experience in managing investments in the UK energy space, we are confident that the Clean Power Mission will further increase investment appetite in the UK market in the medium term.
However, this leaves us with a tricky 2025. The pace and scale of reform is unprecedented and is introducing considerable uncertainty. Plans are changing as the weeks pass and the roadmap is unfurled. We look forward to seeing who will navigate the best course through a challenging 2025.
If you’d like to discuss any of the topics raised throughout the article, please get in touch.
Please fill out the form to download the full report
Share
Sign up to stay up to date with the latest insights and investment opportunities
Learn more
.jpg)
Downing LLP does not provide advice or make personal recommendations and investors are strongly urged to seek independent advice before investing. Investments offered on this website carry a higher risk than many other types of investment and prospective investors should be aware that capital is at risk and the value of their investment may go down as well as up. Any investment should only be made on the basis of the relevant product literature and your attention is drawn to the risk, fees and taxation factors contained therein. Tax treatment depends on individual circumstances of each investor and may be subject to change in the future. Past performance is not a reliable indicator of future performance. Downing LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 545025). Registered in England No. OC341575. Registered Office: Downing, 10 Lower Thames Street, London, EC3R 6AF.
VAT Number: 112 940 149