Vikings at our shores


Vikings at our shores

Thanks to interconnected supplies with Europe, renewables are now the UK’s dominant source of electricity.

In 2023, and for the first time in its history, the UK generated more electricity from renewable sources than fossil fuel based sources. Wind energy was the dominant contributor to the UK's renewable energy generation with an honourable mention for solar.

The UK is a world leader in the adoption of renewable energy, and the UK government has ambitious proposals to expand renewable energy generation over the coming decade. Greater renewable electricity is laudable, but it is subject to a common criticism. What happens when the wind is not blowing or the sun is not shining? Given the intermittent nature of wind and solar generation, this is a pertinent question.

 

Storage is one part of the solution. Battery storage technology is still immature and cannot balance the grid for more than a few minutes at a time. Pumped hydro is a proven technology, but it is costly and requires a specific geography, and has a long lead time to construct.

 

So what to do when the wind is not blowing? Even if it is calm and cloudy in the UK, it is likely to be sunny and windy somewhere else. This is where interconnectors come in. A network of high voltage undersea cables are increasingly linking the UK's electricity grid to that of Western European countries like France, the Netherlands and Norway. In January 2024, National Grid and Energinet (the Danish grid operator) switched on the Viking Link. The Viking Link is a 1.4 GW interconnector linking the UK and Denmark. Costing £1.7bn and stretching 475 miles across the North Sea it is the world's longest land and subsea interconnector. This single connection can provide electricity for up to 2.5m UK homes.

 

The burgeoning network of interconnectors goes a long way towards solving the problem of renewable intermittency. During blustery days with low demand, the UK can now export the surplus generation of its growing fleet of wind farms. Likewise during the dark, still days of winter (yes, they do occasionally happen), the UK can now import electricity from Norway's hydro power plants.

 

National Grid and other investors in interconnector capacity are playing a crucial role in transitioning the UK towards a renewable energy mix which is resilient in the face of intermittent weather.

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Source: Viking Link

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More about the authors

Sajeer Ahmed Investment Manager

Sajeer Ahmed is a member of Aegon AM’s global equities team and co-manages the Aegon UK Sustainable Opportunities strategy.



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