Generating renewable energy is key to reaching net zero, but are our current networks equipped to deal with the change? 

Investment in renewable energy is needed more urgently than ever — for technology and innovation that will support our national grid and improve its capacity.

As the UK works to meet its pledge of being net zero by 2050, the proportion of electricity generated by renewables — like wind and solar — has now grown to a record 40%.  But, with this comes higher risk of instability, as more and more renewable energy sources enter the grid. 

Film paid for and controlled by Quinbrook Infrastructure Partners. It is produced by the ITN Business commercial team and is not created by ITN news staff journalists.

Investing in technology that can support the national grid is now a crucial next step. And, as explored in our Pensions at Work 100 programme, pensions can play a key role in this.

Dawn Turner, an Independent Advisor and Non Executive, told our reporter how climate action — or lack thereof — now has real implications for pension funds.

Independent Advisor, Dawn Turner

“Since 2015 and the Paris Agreement, pension providers and beneficiaries have started to recognise the risk to future financial performance of their pension pots by not addressing ESG matters — and in particular climate change,” says Dawn.

“Investors have got to look at new and different opportunities in terms of investments, to actually achieve some of the climate change ambitions.”

Helping make renewables reliable: Meet the synchronous condenser

The synchronous condenser is a piece of technology that plays a vital role in stabilising the national grid and preventing blackouts.

Synchronous convertor
The synchronous condenser in south Wales

“The synchronous condenser provides that huge opportunity to bridge that infrastructure gap and make renewable energy a reliable source, and also address some of the sceptics’ concerns,” Dawn says.

The synchronous condenser looks and works a bit like a generator — but doesn’t actually generate energy. Mark Burrows, Head of Europe at Capital Formation and Investor Engagement, clarifies its job:

“A good analogy is to imagine a group of cyclists, who are cycling up a hill and they want to maintain their distance from one another,” he explains. “As you go up a hill, you have to cycle a little harder to maintain the same distance, and as you go down the hill you apply the brakes. It’s all about maintaining that same distance and that stability.”

Synchronous convertor

It’s estimated that 80 synchronous condensers will need to be built across the country to help achieve the UK’s net zero targets.

Investment manager Quinbrook Infrastructure Partners has been investing in grid infrastructure that improves the national grid’s capacity to take on renewables, so that as a country we’re better prepared for the transition to a decarbonised system. And turns out there are other benefits too.  

“Just this one alone here in south Wales has created over 300 jobs,” says Mark. “And at the same time, because of the need for synchronous condensers, the national grid offers you revenues which are linked to inflation.”

The UK has promised to hit 95% low carbon power by 2030. With more synchronous condensers, we’re better placed to meet this target, as it allows for more renewables to be bought online.

“If we enable ourselves to build more renewable capacity and become a consistent exporter of power, it’s been forecast to be worth £70 billion per annum,” says Rosalind Smith-Maxwell, Quinbrook’s Senior Vice-President.

Rosalind Smith-Maxwell, Senior Vice-President at Quinbrook

 “We’re in a position of decarbonising with a mix of power; a mix of wind, solar, bioenergy, and hydro[…]. To decarbonise the grid, investments of £375 billion would be needed from today in new generation and grid support, to enable us to hit those 100% decarbonisation levels by 2035.”

“We’re facing challenges in the UK that other grids are yet to face,” adds Rosalind. “If we can solve these with green hydrogen, with long duration storage; if we can show how well [the synchronous condensers] work, that becomes an incredibly valuable piece of IP that other countries and regions will need to learn from.”

Ethical investing with inflation-linked returns is quickly becoming a priority — for the government, but also for pension schemes to protect retirement savings.

Changing how we think about energy is the only way for the UK to reduce its emissions. Watch the full Pensions at Work 100 programme to learn more.