Scotland’s push towards renewables opens door for decentralised energy exchange

With another offshore wind farm in the pipeline and community ownership of renewables encouraged, Scotland is well placed to be part of the decentralised energy future. Engerati takes a look.
Published: Mon 11 Jun 2018

Scotland is planning to make significant advances in renewable energy integration in the near future.

Crown Estate Scotland, the public corporation responsible for managing land and property on behalf of Scottish Ministers, has revealed its plans to lease seabeds for offshore wind farms. The plans would significantly encourage the development of wind power technology in Scottish waters.

There are already two operating wind farms in offshore seabeds in Scotland, as well as two in the process of construction with further projects to start building soon. The new projects to be developed under the leasing proposals would start construction from the mid-2020s.

According to Crown Estate Scotland, the proposal was developed with the intention of supporting supply chain development and sector innovation, creating jobs and stimulating economic growth. Any money that the wind farms make from renewable energy generation will be passed to the Scottish Government for public spending.

The wind farms would hugely contribute to Scotland's goal of having 50% of its consumed energy come from renewable sources by 2030.

According to John Robertson, Senior Energy and Infrastructure Manager at Crown Estate Scotland, “Using our seas to power Scotland is an important part of our economic and environmental well-being. To provide affordable, secure and clean energy, Scotland must continue to sustainably use its natural resources and grow the offshore wind sector.”

UK Government Energy Minister Claire Perry has said, “Through our modern Industrial Strategy, we are generating more clean energy than ever before with an impressive 15% of UK electricity coming from wind last year – up from less than 3% in 2010.

"As technology costs come down, this will enable renewables to flourish. The opening up of more seabed areas for new offshore wind projects is another step towards achieving our low cost, low carbon future.”

Renewables integration and transactive energy

With the UK increasingly invested in renewable energy integration, projects have also resurfaced in a different arena to centralised generation: local energy communities.

In Scotland, renewables integration is happening on both fronts. As well as investing in large-scale renewable generation, localised energy generation is seeing a significant boost with support from the government.

For example, the organisation Local Energy Scotland supports the Scottish Government's Community and Renewable Energy Scheme, a programme to encourage local and community ownership of renewable energy across Scotland.

These initiatives aim to meet the Scottish government's goals to produce 1GW of community and locally owned renewable energy capacity by 2020, and 2GW by 2030. As of June 2017, an estimated minimum of 666MW2 of community and locally owned renewable energy was operational as a result. In the same time period, there were around 17,950 individual renewable energy installations in the country, according to the British organisation Energy Saving Trust.

This indicates that the systems of centralised generations and locally produced renewable power are perhaps moving towards a future where they can function hand in hand. In a present scenario where neither system is fully sustainable on its own, it is important to consider cooperation between both models. For governments, in particular, it may be advantageous to invest on grid-scale projects, such as the offshore wind farms under development, and local energy communities, such as those supported by Local Energy Scotland.

Decentralising renewable energy

With the future of renewable energy looking promising in the UK and Europe, opportunities also emerge in the decentralised energy market and energy exchange. While there is significant investment in renewable energy in a centralised system - as the development of several offshore wind farms may suggest - incentives towards a low carbon economy and technological development could point to a more decentralised future.

As countries all over the world drive policies towards reducing carbon emissions and phasing out fossil fuels as their main energy sources, smaller wind and solar farms are surfacing as viable alternatives. These can come in the form of residential energy systems or small-scale farms - and local energy communities may be on the brink of kicking off for good.

With the assistance of technologies such as peer-to-peer (P2P) energy platforms, where people can generate their own renewable energy from in homes, offices and local farms, and share their energy with other members of their own community. Platforms such as the Pylon Network are aimed at rewarding the production of green energy and connecting grid-connected players with independent Renewable Energy Sources installations.

Other products such as Verv can allow producers of renewable energy to sell any surplus directly to other members of their community, as well as give the consumer more control over their energy data and the possibility to monetise it. Another example is Omega Grid, which seeks to enable P2P trading by using the existing utility infrastructure to encourage renewable generation.

While clean energy is getting a boost from government institutions, its future also lies in large part in the hands of small-scale farms and individual producers, who might even take over the market in future years and reshape the way energy is commercialised. Localised energy production and energy exchange have the potential to provide signals and financial incentives that current energy policies and governance systems are lacking. As such, they have the potential to alter the traditional model of the energy market and shift the way renewable energy is generated and sold.