Still a green light for British renewables

UK energy keeps hitting gold with renewable energy and its net zero goals.

The UK remains one of the global leaders in renewable energy installation, as it is behind one of the more aggressive programs to meet its net zero emission ambitions by 2030. Despite the push for green energy, are there legitimate warning signs ahead that justify the emerging clamour to abandon the country’s climate goals?

Not a red light to be seen

British renewable energy (RE) capacity has seen massive growth, from a 2.9-gigawatt (GW) installed capacity in 2000 to a massive 65.1 GW after two decades. In the last 10 years alone, an average of 3.43 GW RE capacity has been added to the mix, driven by both solar and wind energy which have expanded by 107 per cent and 82 per cent, respectively. The British energy system continues to explore other renewable sources such as marine and tidal technologies, but utility-scale projects are far from maturity.

In terms of generation, renewables have supplied a consistently growing share relative to UK’s aggregate electricity needs. Graph 1 shows that RE supplied 154 terawatt-hours (TWh) of power in 2025, currently its highest share on record at 52.6 per cent. Wind-generated energy supplied the most power out of all renewables in 2025, generating 86.4 TWh, led by offshore wind providing 52 TWh and onshore wind farms bringing the remaining 34 TWh. Biomass supplied the next largest share of electricity at 41 TWh. Following that is solar power supplying 20 TWh despite the UK’s stereotypical overcast weather. Finally, despite a large share of RE powering the British economy, fossil fuels in the form of natural gas remain an indispensable energy source for British homes and businesses, supplying 93 TWh, close to a third of all generated power.

This rapid growth did not occur out of the blue: the increased share of green energy technologies in the UK’s power mix is one of the pillars of the UK’s decarbonisation and net-zero ambitions as outlined under the 2021 Net Zero Strategy. This includes powering all of the UK’s electricity needs using clean sources, with gas-fuelled power as essential backup.

One of the programs which elicited a robust response from the private sector is the Contracts for Difference (CfD) program, which pays RE developers a single price for all their generated electricity. This essentially shields developers from the price volatility of the spot market, thus creating a stable revenue stream that makes the upfront investment more palatable for investors and developers alike. As of end-2025, the CfD program facilitated investments equivalent to 39 GW of capacity across seven rounds, with around 10 GW already operating and powering millions of British homes.

For the overall RE industry, programs implemented by the UK government generated USD 45.6 billion in total revenue in 2024, employing nearly 90,000 individuals in the same year. More recent estimates put the industry’s total contribution at USD 141 billion in gross value added, close to 4 per cent of the UK’s GDP. Rather than a red stop sign, the numbers indicate that the industry is on a red-hot streak.

Proceed with caution?

While the future of renewables is seemingly rosy in terms of investment potential, technical and engineering limitations are casting a grey fog upon Britain’s RE roadmap. With the continuous addition of green energy sources, the national grid is already showing some blacks and blues. In short, the current design of the grid cannot effectively handle simultaneous rapid increases in power production.

This mismatch in design and circumstances is more evident in the curtailment of wind energy supply in the UK’s power system, shown in Graph 2. Curtailment is when the grid operator, the National Energy System Operator (NESO), asks power plants to reduce their generation to maintain the stability of the power grid. Usually, wind farms are asked to curtail generation first as they are more agile and responsive to instantaneous decisions compared to other renewables. In the last decade, curtailed wind energy increased to as much as 9.9 TWh in 2025, equivalent to 11 per cent of total wind generation in the same year. This incurred a curtailment cost paid by the NESO to the wind farm operators amounting to USD 513 million in compensation for that year alone.

The escalating curtailment activities in the last decade underscore the grid’s inability to accommodate additional renewable energy capacities despite the net zero goal. It also highlights the stark difference between renewable and non-renewable power sources. Generators fuelled by coal and natural gas use heavy spinning turbines that naturally provide frequency stabilisation for the grid; however, the Clean Power 2030 target already replaced fossil fuels with renewables, with the last coal-fuelled power plants shut by late 2024, hence, the UK must look towards other solutions for grid stabilisation. The NESO has proposed a USD 118 billion grid upgrade program to accommodate the many changes brought on by UK’s huge dependence on green energy.

The future of renewables in the UK is still a golden goose. An estimated USD 610 billion worth of energy infrastructure is already in the pipeline with some 400,000 jobs still needed in the transition. These figures underscore the undeniable importance of the low-carbon RE industry in Britain’s economic future, notwithstanding the challenges brought on by the national grid. The UK should continue along this path not just to reduce greenhouse gas emissions but to pursue a sustainable means of growth and development. As such, raising the white flag should never be the option, unlike what other pundits are claiming.

This original article has been produced in-house for Lundgreen’s Investor Insights by on-the-ground contributors of the region. The insight provided is informed with accurate data from reliable sources and has gone through various processes to ensure that the information upholds the integrity and values of the Lundgreen’s brand.