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Home/Green New Deal: What would Labour’s net zero proposals mean for the GB power market?

Green New Deal: What would Labour’s net zero proposals mean for the GB power market?

Recent Brexit proceedings have highlighted the potential for an early general election. We have prepared a brief summary and implications for the GB power market of Labour’s “Green New Deal” and “composites” presented at their Conference. It should be noted that this note does not represent Aurora’s political views. At Aurora’s Battery and Flexibility Conference on 14th October, Shadow Energy and Climate Change Minister Alan Whitehead also further clarified that this is not the official position of the Labour party.

A summary of policy and analysis:

  • With an eye on net zero by 2030, Labour’s plans could see total renewable penetration rising to 117 GW by 2030; annual demand would also see a significant increase to 423 TWh (or 36% higher than today) from the electrification of heat and transport
  • The rapid build-out of renewables will depress baseload prices to £44/MWh by 2030 – £13/MWh lower than Aurora Central. The frequency of zero/negative price periods will also increase to 2500 hours per annum
  • Wind assets will see a considerable decrease in capture prices, reaching £24/MWh and £23/MWh for offshore and onshore wind respectively by 2030. With generation more focused around peak periods where power prices are high, solar assets would see relatively higher capture prices of £44/MWh.
  • Thermal assets see a dip in energy gross margins as renewable generation squeezes out thermal operation. However, this loss in energy revenue is made up for in the capacity market

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Summary

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