The Department for Energy Security and Net Zero (DESNZ) has published its “Clean Power 2030 Action Plan”, putting some detail around the UK Government’s mission to deliver clean power to the UK by 2030. Here we review the key policy levers proposed by DESNZ and consider the extent to which they provide meaningful signals to developers, funders and supply chains considering their pipelines of investment in the coming years.

What is the Clean Power 2030 Action Plan?

Amongst its “missions” for the UK, the newly-elected Labour government set itself the challenge of delivering clean power by 2030, which it defines as clean sources (such as on- and offshore wind, solar, nuclear and CCUS-abated gas) providing in a typical weather year:

• at least as much power as the country consumes over the whole year; and
• 95% of the country’s generation.

Achieving this represents an immense policy challenge. DESNZ have identified that the scope exists to increase provision of clean electricity through the addition of capacity from sources such as:

• onshore wind: an additional 13-15 gigawatts (GW), doubling current installed capacity;
• offshore wind: an additional 28-35 GW, tripling current installed capacity;
• solar: an additional 28-30 GW, tripling current installed capacity;
• battery storage: an additional 19-23 GW, a five-fold increase in current installed capacity; and
• long duration electricity storage (such as pumped hydro and liquid air energy storage): an additional 1-3GW, potentially doubling current installed capacity.

Projects currently committed or in construction meet only a limited proportion of these gaps, and many of those projects and others in early development are encountering delays caused by planning, grid connection and supply chain constraints. The scale of the task in the few short years to 2030 is clear.

DESNZ does not expect each of the amounts above to be met in full, but expects that policy will develop to favour those projects and sectors showing most potential as time goes on.

But how?

DESNZ propose a range of measures intended to accelerate the development of additional clean power capacity, including the following:

• improvements to the planning and consenting environment for network infrastructure and new generation projects, much of which overlaps with the related consultation which closed on 24 September 2024, and on which the UK government is expected to respond by the end of the year. Proposed measures, some of which have been previously announced, include:
  • adding additional resource and expertise to relevant bodies with a view to examining mission-critical projects faster;
  • ending the de facto ban on onshore wind development in England;
  • adding onshore wind projects of >100 MW into the Nationally Significant Infrastructure Project (NSIP) regime; and
  • introducing a Planning and Infrastructure Bill, alongside reviewing secondary legislation, with a view to streamlining planning and consenting for key infrastructure, with a particular recognition that, in Scotland, “the consenting regime for larger scale energy infrastructure… is not fit for purpose”.
• DESNZ also proposes improvements to the network expansion process, and fundamental reforms to the grid connection regime. Around twice as much network infrastructure will be needed by 2030 as has been built in the last decade, and generation projects currently in the pipeline are experiencing lengthy delays caused by the “first come, first served” connection process. To address these, it proposes measures such as:
  • recognising those grid expansion projects most critical to satisfaction of the 2030 plan within the weighting given by Ofgem in approving strategic investments by network companies;
  • consulting with Ofgem on tightening incentives and penalties on electricity transmission owners and network operators; and
  • accelerating the connection of projects critical to the 2030 plan and removal of slow-moving and stalled projects from the queue, prioritising based on readiness alone, with updated offers being issued by the end of 2025.
• It also anticipates making a number of changes to electricity markets to adapt to the shape of a renewables-dominated power system. Proposals here are less concrete, but reference a number of key upcoming events including:
  • the ongoing Review of Electricity Market Arrangements (REMA), expected to be finalised before Allocation Round 7 (AR7) auctions open in mid-2025;
  • potential amendments to AR7 Contracts for Difference to use zonal reference prices, if a final decision is taken in REMA to pursue zonal pricing;
  • confirmation that the government is looking to secure at least 12 GW of offshore wind capacity through AR7, AR8 and (depending on the speed of project deployment) AR9; and
  • widening access to the Capacity Market, with access to three-year agreements with no capex thresholds for low carbon technologies, and introducing a new nine-year capex threshold for low carbon projects falling between the current three and 15-year thresholds.

Will there be a meaningful impact?

If implemented, the proposals are likely to provide real encouragement to developers, funders and supply chains, though much remains to be done if the 2030 clean power targets are to be met.

Most immediately impactful would be the grid connection priority given to projects that are aligned with the 2030 plan and are actually viable. Connection constraints are a consistent challenge for new generation projects – with connection dates for new projects often being far into the future. Greater confidence around grid connection will substantially assist with investment decisions.

There is some detail around reforms to the planning and consenting processes that will assist projects in early development. But resourcing and expertise gaps remain a significant constraint and will likely take some time to fill; potentially too long to have a meaningful impact on the 2030 target, albeit still welcome for the longer-term pipeline. Also, while the inclusion of >100 MW onshore wind developments in the NSIP regime is positive, the threshold is high: relatively few projects will be in a position to take advantage.

The biggest gaps remain around electricity market reforms. With the REMA programme still ongoing, developers and funders will be hesitant to commit resources and funds to projects where the impact on AR7 and Capacity Market financials remains unclear. The sooner the regulatory picture settles, the faster those projects will be able to progress and contribute towards meeting the government’s ambitious targets for 2030 and beyond. 

As part of our work with a range of clients in the renewables, low carbon generation and network infrastructure spaces, we are closely monitoring these developments and their implications for projects. We would be delighted to discuss any of these with you further.

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