Episode 5
Clean Energy Powerhouses Lead the Way in the Race to Net Zero
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EPISODE 5: Follow The Leader
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New Behaviors
In 2019 ScottishPower sold the last of its gas-generation assets, making it the first integrated energy company in the U.K. to shift completely from coal and gas generation to renewable power.
Transforming from coal-fired power stations to renewable energy took time, money, and an entirely new business model. ScottishPower is now well placed to profit from the transition to a low-carbon economy.
“Because of our experience in the renewables industry, we can deliver innovation faster.”
Owned by Iberdrola, the company is one of the ‘clean energy supermajors’ that represent the modern energy industry. But it did not become a green powerhouse overnight. The company’s first wind farm, Carland Cross in Cornwall, opened in 1992; Whitelee in Scotland, the U.K.’s largest onshore wind farm, came online in 2009.
“The emergence of companies that have completely shifted toward clean energy is a revolution for the sector,” says Rain Newton-Smith, Chief Economist at the CBI. “In proving that you can be both green and successful, they offer a hugely positive example for other businesses—in the energy sector and beyond.”
“These clean energy powerhouses took a lot of the risk upfront, but are now leading the way,” says Nigel Topping, High-Level Climate Action Champion for the COP26 UN climate talks. “It’s up to the rest of the industry to follow in making their business fit for purpose now—and that means tackling climate change head-on.”
“During lockdown, we commissioned more than 700 megawatts (MW) in a single offshore project, East Anglia One,” Ms. McQuade adds. “Our first turbines had 500-kilowatt (kW) capacity. Now we’re using 7MW devices, and in future there will be 15MW turbines in the North Sea.”
Decarbonizing power generation was the relatively straightforward part. “We’ve done some of the easy stuff. We need to address heating, transport including heavy haulage, aviation, shipping and industrial processes,” she says.
ScottishPower’s experience in wind energy, including seeing the cost of wind turbines fall dramatically and the development of far more powerful machines, makes it confident it can take on even more ambitious decarbonization plans in future, Ms. McQuade says. “We’re talking gigawatts of capacity, billions of pounds of investment, tens of thousands of jobs created.”
It is now looking to add other green technologies to its portfolio, such as solar, and supermarket-sized batteries situated next to its wind farms. And it is planning to massively boost the capacity of some of its first wind farms by ‘repowering’ them—replacing existing turbines coming to the end of their life with much bigger machines.
The company is also looking into the potential of green hydrogen, produced when renewable energy is used to separate hydrogen from water. It is working with the Port of Cromarty Firth and a number of Scotch whisky makers to create a green hydrogen project in the Highlands that will help the whisky industry to cut its emissions.
“Because of our experience in the renewables industry, we can deliver innovation faster. The opportunity is there; the realms of possibility are within reach,” says Ms. McQuade.
“The pace of change is only going to accelerate as policy-makers introduce more supportive policies and stimulate innovation, public pressure grows from concerned consumers, and more investors use climate action and resilience as a metric for investment,” adds Mr. Topping.
This shift is partly due to the fact that there is now an ecosystem in place that can make things happen—it includes wind turbine and software suppliers, contractors, trucking companies, vessels, accommodation providers, and many others. ScottishPower engages with potential suppliers and trade associations such as the Offshore Wind Industry Council, Scottish Renewables and RenewableUK, as well as bodies such as Innovation UK, the Offshore Wind Innovation Hub and the Offshore Wind Catapult. It can help its members understand the opportunities available and give them the confidence to invest while helping to deliver its own projects. “There’s a real ripple effect into local economies,” Ms. McQuade says.
The decarbonization of the economy is accelerating and energy firms are the foundation of this transition, adds Ms. Newton-Smith. “For firms to survive and thrive within that agenda, they must demonstrate agility, invest in upskilling and retraining, and signal clear commitment to responding to consumer demand for sustainably generated, competitively priced household energy.”
It helps that wind power is now cost-competitive with fossil fuels, so customers are buying it not just because it is green, but also because it is cheap.
“Industry and government have come together to create opportunities, platforms, funding mechanisms, and even competitions that move us faster along the innovation curve,” Ms. McQuade says. “As our strategy has rolled out, we have seen increasing buy-in from investors. There’s a real focus on funding clean energy.
“We could not have done this alone. And there is very little point in doing it if you don’t have others around you.”
First movers
Innovation experience
The power of partnerships