Over recent issues, I’ve written about the potential for solar panels on warehouse rooftops to save money, reduce emissions and secure electricity supply. As well as helping our sector to help itself, the UK Warehousing Association is campaigning for Government support too. On behalf of the logistics community, we have highlighted the importance of reforming the electricity markets.
Fortunately, there is some good news here, with a consultation which closed in October. It spoke of the need to design an electricity system which passes the savings of renewable electricity generation onto consumer bills, keeps us on our world-leading decarbonisation trajectory, and ensures our supply of energy is secure and stable. Not only an ambitious remit, but a necessary one.
In our consultation response, while broadly agreeing with the Government’s vision for dealing with the growing demand for electricity, we went on to explain how this applies in our sector, where forklift trucks are being switched from gas to electric and battery-powered robots are increasingly used. The future demand for electricity to power road and rail freight, will have a direct impact on warehousing too.
To deliver its decarbonisation plans, we believe Government must take an ambitious approach to tackling market failures in planning and infrastructure development. For example, it is vital that the current exemption of solar panels from business rate rises continues in England, and it should also be extended across the UK to Scotland, Wales and Northern Ireland.
The importance of decarbonising the electricity system by 2035 as a response to the global climate crisis is clear, but security of supply is critical too. The unstable situation with energy supply created largely by the fallout from Russia’s war on Ukraine, has underlined the importance of this point. Blackouts due to electricity failure would damage supply chain resilience and – as COVID lockdowns have taught us – supply chain continuity is vital to keeping shelves stocked and the nation fed.
In respect of solar installations on warehouse rooftops, the current system for access to the grid is inconsistent. One company may be allowed to connect at no direct cost, on a first come first served basis. If subsequent applicants exceed the remaining network capacity, they are required to pay for grid reinforcement works. Solar project costs are already 80 percent ‘upfront’, so these additional advance costs are a burden; and connection costs cannot be amortised, so they must be borne in one year.
We concluded with a reminder that access to affordable electricity underpins absolutely all economic activity: every business relies on suppliers; every supply chain uses warehousing; and every warehouse needs electricity. As an influential trade body, UKWA is investing considerable time, money and effort in promoting the benefits of solar power to its 900+ Members and helping them to overcome the barriers to adoption. However, it is for Government to deal with problems around the regulation of the electricity market and network access. If renewable installations cannot even connect to the grid then warehouses across the UK that could be putting megawatts of power generation onto their rooftops simply will not be able to.
Clare Bottle
UKWA, CEO
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