Carter Jonas energy market 2024 predictions
Release of grid capacity
The updates to the connection process from National Grid should help to start bringing forward some transmission connection dates and remove projects from the queue which are not progressing. This is addition to the accelerated connection of 20GW of capacity announced in November 2023 and an improvement in the connection of battery projects to the transmission network, which should reduce connection times by 4 years.
Increased roll out of solar
The solar market continues to grow with both large ground mount and rooftop installations in tandem with a maturing PPA market. Panel price decreases have helped to continue this trend after some supply chain issues post-Covid. Changes in planning for rooftop and carport systems announced at the end of 2023 will help to reduce enabling costs and speed up timelines for these projects.
Re-emergence of onshore wind in England
With the change to the NPPF footnote and the potential for a new government in 2024, the outlook for this technology is looking rosier than it has for a few years. Although more substantial policy change is required to ensure viability for onshore wind projects in England.Settlement of energy prices back to market norms
With much improved gas storage across Europe, and a milder winter so far, energy prices have stabilised and are projected to reduce over the course of the year.Government Support
Improved Contracts for Difference support rates (covered in more detail below) will undoubtably help support the continued investment in new projects. The Improving Farm Productivity grants now includes solar PV, opening up another route for farms to green their operations.Development Consent Orders
We expect a busy year, which will continue to include a wide range of infrastructure projects including a wave of multi-GW solar farms, carbon capture and storage networks, and undersea intercontinental cabling. All of which will involve a greater scrutiny of community benefits.Biodiversity net gain
Despite government delays in legislation, biodiversity and natural capital will continue to grow in importance and as a planning requirement across a full range of development projects from solar farms to new offices.Battery revenues
Following announced improvements in the transparency of the Balancing Mechanism, it is hoped that battery revenues will stabilise this year from the lows seen at the end of 2023.Funding
The increase in interest rates has had an impact on renewable energy projects, given their heightened sensitivity to fluctuations in the cost of debt. However, financial markets anticipate five rate cuts within the year, lowering the borrowing cost from 5.25% to below 4%. Timing is still to be confirmed though and some analysts anticipate that the Bank of England will advise against making any premature predictions of interest rate reductions.
