Onsite generation ‘will continue to boom’

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A boom in onsite generation is in now sight and the UK market has the potential to triple in size, according to Jonathan Maxwell, CEO of Sustainable Development Capital Limited. “There is a very substantial opportunity,” he suggests. “The intensity of focus from large corporates on minimising their carbon footprint is completely different compared to five years ago.

The energy regulator is tearing up the current electricity charging arrangements and starting from scratch. Some argue that the disruption threatens to undermine decentralised and flexible technologies. But Maxwell thinks Brexit may ultimately create greater demand for onsite generation, while Ofgem’s root and branch charging reviews need not pose an existential threat.

“There are always two sides to these coins, and differences of opinion make a market,” he says. “Brexit does create uncertainty. It will slow decision making at a corporate level. On the other hand, it may increase issues with energy security: we have a degree of reliance on international gas and interconnectors. Those problems do not go away, they are no easier to solve,” says Maxwell.

He says resilience – or security of supply – is a major aspect of the business case to invest in energy efficiency or on-site generation. As Japan appears to pull back, the UK new nuclear programme is diminished and behind schedule, while coal plants are closing and grid operators are working harder to reliably accommodate increasing volumes of renewables.

“If energy security is a driver to people being more efficient with energy and generating more on site, I would say Brexit is at least as much a tailwind as a headwind,” Maxwell suggests.

Ofgem’s charging reviews are “complex”, says Maxwell, a reflection of the UK energy landscape. “But if the fundamental question is who is going to pay for the grid and how that is fairly allocated, the answer to that question should not diminish the business case for a good onsite generation project, particularly where a good private wire solution is included,” says Maxwell.

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