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“Co-location, co-location, co-location”: Benefits and challenges

Key take-aways of the launch event  

By Jamie Maule, Dr Matthew Chadwick & Nick Fothergill (Partner – Weightmans LLP)

As part of the UK’s transition to net zero, the electricity generation mix needs to evolve, with increasing amounts of renewable capacity required to meet net zero commitments. To maximise the timeliness and minimise the costs of this evolution, many developers and investors are considering the co-location of multiple generation and storage assets behind a single grid connection, alongside co-location of generation and storage assets with electric vehicles (EV) charging infrastructure or low-carbon hydrogen production.

Held at Weightmans’ London offices on 7 December, this launch event and webinar for the paper ‘Co-location, co-location, co-location’, written in partnership by Cornwall Insight and UK law firm Weightmans, centred around seizing the key opportunities and overcoming potential challenges for co-location.

REMA: opportunity or barrier to co-location?

For the future of co-located projects and energy market investment as a whole, the Review of Electricity Market Arrangements (REMA) consultation launched in July is an area of high uncertainty. One of the key suggestions within the REMA consultation is the shift in the UK market from a national to a zonal or nodal pricing model. The panellists argued that in a locationally priced market there are risks associated with investors moving to follow the money and creating system imbalances. Liam Kelly, Green Switch Capital, added that the mismatch between where the revenue is and where it is possible to build, combined with the upheaval of the grid and pricing infrastructure, could result in “huge infrastructure and investment projects being put on hold or collapsing altogether”. For co-location specifically, the panellists noted that locational pricing could discourage co-location, with renewable assets limited by the geography of the UK and planning process, but with batteries able to move to where the price signals are highest, resulting in a separation of the two.

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