Could warehousing go off-grid?

THE NATIONAL Grid has been described as ‘severely depleted’ by BCS (Business Critical Solutions) head of utilities Rees Westley.

“Here are the bald facts,” says Rees. “The National Grid is severely depleted; there is little or no capacity for importing or exporting power to other areas; our infrastructure is not really fit for purpose; in certain geographical areas, there will be no significant power availability for the next seven to nine years. The last point refers to planned investment into areas such as sustainable energy and the Government’s plans for a more decentralised energy model that also relies heavily on renewables.”

Currently we have a scenario where we have a concentration of demand in West London and as a result the National Grid is so constrained that it is unable to import or export power. On the other hand the Scottish power networks are underutilised and sustainable power sources such as on and offshore wind turbines are being switched off due to over-supply and lack of demand.

The issue is that the transmission lines that run from North to South are constrained and are unable to move power between them. There is currently subsea transmission infrastructure (four circuits) being constructed that are due to come online towards the end of the decade that will carry this renewable energy southbound.

So, why is that important to warehousing?

Rees explains: “The construction of major warehouse developments are inextricably linked to the ability to source and utilise power. The impact of power availability runs across every aspect of the market from informing decisions on site selection, through the design and construction phases and the operation of such facilities. With forecast growth for warehousing likely to remain substantial, we are fast approaching the crunch point where we have to accept that in the UK we simply do not have enough power to continue as we are. In simple terms, the ‘magic pot of power’ is running dry.”

What are the options in the meantime?

Rees is advising clients on a number of solutions to reduce reliance on distribution and transmission networks including creating more efficiency and rationalising demand. In some cases there is the option to consider generating your own power to supplement any shortfall.

“However, the reliability of this type of renewable energy is not guaranteed as it isn’t always sunny or windy, so this often needs to be supplemented with other technology such as lithium and hydrogen power storage and smart grid technologies.”

Look up

So, the solution for warehousing could be to look up, and use the roof warehouse occupiers possess to use solar power to generate on-site electricity.

This is certainly the recommendation from an independent research report, commissioned by the UK Warehousing Association (UKWA) and produced by specialist consultancy Delta Energy & Environment (Delta-EE).

The report says the warehousing sector possesses approximately a third of all commercial roof space, with the potential to double UK’s solar PV capacity.

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 75 million square metres of roof space, avoiding the need to develop new land equivalent to the footprint of 500,000 houses.”

Chief executive of UKWA 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 and planning

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

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 association has developed a 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.

To deal with the immediate crisis, the Government has announced measures to cap energy bills for UK firms for six months. But in the long term, the UK will have to up its game on the supply side, and perhaps warehousing can play a somewhat unlikely role in this.