Post #73: Going green in the UK - Heptagon Capital – Production

As the clock strikes midnight tonight, it will have been two months since the UK last burned coal to generate power. The country has come a long way.

Post #73: Going green in the UK

As the clock strikes midnight tonight, it will have been two months since the UK last burned coal to generate power. The country has come a long way. Just a decade ago, coal was responsible for ~40% of Britain’s electricity. While the current pandemic has clearly played a role (in reducing overall energy demand), the bigger story is about the transformation of the UK’s energy system over the last ten years.

Back in 2010 only 3% of the country’s electricity came from wind and solar. On a year-to-date basis, renewables are now responsible for a bigger share of electricity generation than fossil fuels. The former accounts for 37% versus 35% for the latter (the remainder comprises nuclear and energy imports, per data from Carbon Brief, cited here). This has been a function of conscious policy choices and sustained investment. The UK can now also boast ownership of the world’s largest offshore wind farm. Located 120km off the coast of Yorkshire, the project spans an area larger than Malta. Each of its 174 turbines are ~100m tall with their blades covering an area bigger than the London Eye observation wheel can turn. Upon completion later this year, the project will be capable of powering up to 1m homes.

As exciting as these data points are, there is still a lot further to go. Many hope that the current pandemic will bring about an energy policy reassessment by governments globally. The UK has already committed to fully decommission its remaining three coal plants by the end of 2025 at the latest. Experts predict that the world could move from two-thirds of its energy generated by fossil fuels in 2018 to two-thirds coming from zero-carbon sources by 2050 (per BNEF). Even if the sun is currently absent from the UK’s skies, the wind is still blowing.


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