Distribution Network Operators (DNO) are "extortionate and highly ineffective monopolist gatekeepers" who are preventing the warehousing sector from investing in energy generation and connecting to the energy grid.
The accusation comes in a report published this week by the UK Warehousing Association (UKWA) which argues that the UK’s solar PV capacity could be doubled and deliver the entire UK requirement for 2030, by rolling out solar panels across warehouse rooftops across the UK.
It calculates there is the equivalent of 18,500 acres of land for solar power generation in the sector that could generate more than the 13.8TwH of electricity required in the UK renewable energy strategy.
However access to the grid is controlled by Distribution Network Operators (DNOs) - licensed companies that own and operate the network of towers, transformers, cables and meters that carry electricity from the national transmission system and distribute it throughout Britain.
UKWA chief executive Clare Bottle said: “Warehouse owners across the country are struggling to pay for gas-powered electricity from the grid, when they could be generating all the power they need and more from the roof of their buildings. Out of sight, easy to maintain and affordable, the case for solar should be obvious and yet we are being held back by poor market practice and failures of regulation.
She points in particular to what the UKWA describe as "the obstructive, extortionate and not fit for purpose DNOs" which she claims are "holding back the businesses that could invest hundreds of millions of private sector funding into clean renewable power."
Bottle added that “we need a fundamental rethink of the way in which DNOs hold power over access to the grid, how they get renewable schemes connected to the grid and the prices they charge.”
She is calling on the new Prime Minister Liz Truss to act to remove these barriers to investment, so the UK is not exposed to this type of energy crisis in the future.
The UKWA report Investment Case for Solar Power in Warehousing and Logistics looks at how the UK warehouse sector is sitting on what it describes as "one of the obvious solutions to UK energy resilience that is actionable right now."
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 and enable the sector to become a net producer of green electricity.
Laurence Robinson, senior analyst at Delta-EE and co-author of the report, said: "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.
“Just 20% of the UK’s largest warehouses can provide 75 million square metres of roof space, avoiding the need to develop new land equivalent to the footprint of 500,000 houses.”
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Commenting on the report, Bottle said, “As energy costs continue to rise, 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 demand for low-cost, sustainable electricity.”
UKWA said that solar PV is widely predicted to be a major part of future sustainability, providing low cost, secure and green electricity, but so far – despite cost reductions of over 80% in the past decade – this option has been largely unexplored and untapped in the warehousing sector.
It argues that, unlike utility scale solar, warehouse rooftop solar does not compete with farmland. It said that the report shows that warehousing is in a unique position to adopt solar power, providing an unparalleled amount of accessible, unobstructed roof space close to industrial and residential centres.
UKWA is asking the new Prime Minister Liz Truss to take action. It highlights the barriers presented by grid permits and recommends wholesale reform of the way DNOs operate and their regulation by Ofgem.
It is also calling for an extension to 2030 of the government’s super deduction on capital investment, due to end in April 2023 to address upfront investment concerns.
The association also wants solar energy to coninue to be excepted from business rates, in recognition of the important role solar will play in a greener economy.
Clare Bottle will be joined by Kevin McCann of Solar Energy UK, Thomas McMillan, Energy Director at Savills, Jenna Strover, Head of Commercial Delivery at Potter Space and Laurence Robinson of Delta-EE in the Logistics Theatre at IMHX on Thursday morning 8th September to present and discuss the report findings and sector strategy for solar.
UKWA will also have available its new solar PV installation toolkit, 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.
