Reform electricity market

WHILE AGREEING with the government’s broad priorities: affordability, energy security and decarbonisation, UKWA points out that as the sector weans itself off fossil fuels, it is witnessing a growing demand for electricity. Thanks to significant developments in lift power and battery technology, forklift trucks are increasingly operating on electricity as opposed to gas. Meanwhile, automation is taking hold – driven in part, by labour shortages – with electrically-powered conveyors, cranes and robots more widely deployed than ever before.

In logistics more generally, the demand for electricity is predicted to rise even further due to the changing nature of road and rail freight. UKWA points out that solar panels on warehouse rooftops – a largely untapped resource, close to centres of demand – have the potential to double the UK’s solar capacity and secure supply, to meet this increased demand.

UKWA CEO Clare Bottle says: “Our research shows that only about 5% of warehouses have any solar panels on the roof; and where they do have such panels, these usually only cover 10-25% of the available space.”

The opportunity for doubling the UK’s solar capacity is explored in UKWA’s Walking on Sunshine report which illustrates the benefits of solar PV on warehouse roofs.

In order to tackle market failures, Government must take an ambitious approach’ to planning and infrastructure development, says the association. One suggestion made by UKWA is the extension of solar panels’ exemption from business rates rises across the UK to Scotland, Wales and Northern Ireland. And UKWA’s report stresses the need for Ofgem reform, to change how businesses are charged by District Network Operators when increasing the supply into the grid, as a consequence of deploying renewable generation. 

Clare adds: “To encourage and incentivise the installation of renewable energy domestically and commercially, the Government must remove these barriers. Our response to this consultation makes the case on behalf of our members.” 

Research

The independent research report, commissioned by the UK Warehousing Association (UKWA) and produced by specialist consultancy Delta Energy & Environment (Delta-EE), has shown huge potential benefits for the UK, and for the warehousing & logistics sector, of installing solar photovoltaic (PV) systems on the nation’s warehouse rooftops.

As the warehousing sector possesses approximately a third of all commercial roof space, it has the potential to double UK’s solar PV capacity, which means the warehousing sector alone could deliver the entire UK requirement for 2030 forecast by the National Grid future energy scenarios (FES).

According to the report, UK warehousing has the roof space for up to 15GW of new solar power, which could:

• Double UK’s solar capacity
• Reduce carbon emissions by 2 million tonnes/year
• Cut warehousing electricity costs from between 40-80%
• Save the warehousing sector £3bn/year
• Provide a more secure power supply
• Enable the sector to become a net producer of green electricity

Delta-EE senior analyst and co-author of the report Laurence Robinson, says: “Rooftop solar PV in warehousing can play a significant role in delivering local renewable energy, particularly in urban areas where limited alternative options are available due to land and planning constraints.

“The UK’s 20% largest warehouses can provide 75million square metres of roof space, avoiding the need to develop new land equivalent to the footprint of 500,000 houses.”

Clare Bottle adds: “As energy costs continue to rise, it is essential that we seize this opportunity to potentially double UK’s solar PV capacity and massively reduce electricity costs for businesses in this vital sector. The current crisis in Ukraine has underlined the necessity for a more secure power supply for the UK and adopting solar PV across the country clearly supports the journey towards the government’s 2050 net zero targets.

“UKWA is calling on the government to support the sector in embracing solar PV as it transitions to electrification with transport fleets, forklifts and other mechanical handling equipment (MHE), automation and robotics, all of which will drive up requirement for low-cost, sustainable electricity.”

Funding

On funding, the government’s super deduction on capital investment including solar panels can provide significant investment savings, however this is due to end in April 2023. UKWA proposes this is extended to 2030 to support levelling up the UK's warehousing and help address upfront investment concerns.

On planning, UKWA will highlight the barriers presented by grid permits and recommend that the approach to DNO (Distribution Network Operators)/DSO (Distribution System Operators) and connection planning should be reformed. The aim is to ensure part of the review of the electricity market arrangements by BEIS, and Ofgem's review of DSO governance model, enables the widespread installation of commercial rooftop solar with minimal barriers.

On tax, solar energy is excepted from business rates, UKWA says this must be preserved and maintained, in recognition of the important role solar plays in supporting improved EPC ratings.

UKWA will also promote and support local energy schemes to encourage closer cooperation between businesses and communities, helping to increase the value for exported solar power, while also minimising impact on the wider grid infrastructure.

The report includes consideration of the possible barriers to solar PV installation – such as upfront investment, payback time, grid connections – and provides an independent assessment of the viability as well as the benefits of solar PV for the UK warehousing sector. 

The case for solar PV on warehouse rooftops is overwhelming, for the sector and for the UK, says UKWA.

The association has developed a solar PV installation tookit, a step-by-step guide for members keen to adopt solar PV and reap the benefits of lower costs, increased energy security and reduced carbon emissions.

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