The winds of change – what can we do to meet our net-zero targets?

There have been a number of setbacks of late for the UK government’s plans of quadrupling offshore wind, tripling solar power and doubling onshore wind by the end of this decade. For example, Ørsted’s recent decision to abandon its Hornsea 4 scheme to build 2.4 gigawatts (GW) of new capacity in the Humber region means that previous estimates of UK offshore wind energy production may need to be recalibrated downwards.

According to a report released by the Department for Energy Security and Net Zero in April 2025, the UK is aiming for 43–50GW of offshore wind capacity by 2030, of which Hornsea 4 would have contributed about 5%. In addition, there is the candid recognition by other European countries that their energy policy requires a reality check.

These worrying trends lead one to question: are the UK's net-zero aspirations just a pipe dream? And realistically, what is required to have any chance of bringing them to fruition?

UK renewable energy progress so far to meet net-zero targets

Grid connection issues are one of the main blockers hindering the UK’s ability to deliver clean power and reduce reliance on fossil fuels. There is no clear indication on how and when this will be resolved, although the previous and current government both vowed to cut grid connection delays. The queue for the grid has grown tenfold in the past five years and now contains the equivalent of 739GW - double what we need to meet our 2050 forecast.

In terms of solar energy, when the current government came to power in July 2024, there was 17.5GW of deployment capacity. They quickly lifted the de facto ban on onshore wind and approved three solar farms – Sunnica, Gate Burton and Mallard Pass, within weeks of coming to power.

Anecdotally, developers felt optimistic about the future of the UK renewables market in the summer of 2024. However, in the nine months between July 2024 and March 2025, solar capacity grew by just 3%. The previous nine months saw more than double that, at over 6%.

Operational onshore wind capacity in the UK currently totals 15.7GW comprising 9,200 onshore wind turbines. This increased by 739MW in 2024, although the split between the first and second half of the year is unclear, largely due to the commissioning of some large-scale projects, such as Viking (443MW) and Broken Cross (43.2MW).

However, the capacity under construction perhaps paints a more worrying picture, with just 898MW under construction in the UK. In fact, the number of onshore wind projects submitted for planning permission decreased in 2024 compared to 2023. The UK has about 3,000 offshore turbines, with a capacity of 16GW. 2024 marked the first year since 2016 without any new offshore wind projects fully commissioned. As such, it appears that the manifesto promises have somewhat stalled across the various renewables technologies.

Overseas alternatives to domestic sources of energy

Security of energy supply must be a top priority for any nation. However, according to the UK government, the UK’s net energy imports rose by 40% between 2023 and 2024 and this upward trajectory has not slowed in recent months.

This trend is even more worrying following the blackout on the Iberian Peninsula, which demonstrated how vulnerable an electricity system can be. The new German government has specifically stated that risks of this kind must be minimised, that system risks and costs have been underestimated, and has recognised that renewable energies alone will not be able to supply an industrial nation like Germany with electricity reliability at affordable prices.

Netherlands also seem to be following Germany’s lead as they recently struck a deal to ramp up domestic gas production. The Dutch Minister of Climate and Green Growth said, “In a world that is becoming increasingly unstable, it is important that we take responsibility for our own energy supply.”

Balancing energy supply and demand

In order to achieve more domestic production and innovation in the renewables energy sector, we need to revisit the fundamentals and help to encourage growth and efficiency in this sector.

Simply put, this country’s energy needs far outweigh our ability to produce sufficient energy to meet demand. This problem is not going to go away as energy needs, both nationally and globally, are on the rise.

If the UK wants to meet the government’s commitment of energy independence and avoid vulnerabilities to external geopolitical pressures, then we need to see meaningful investment in the UK’s energy production resources and reduce dependency on imported energy. In the short term, we have a choice; either continue to produce hydrocarbons in the UK to meet our immediate needs, or to import this from overseas.

Tax remains one of the government’s most powerful tools to influence behaviour, stimulate innovation, and encourage investment in the UK’s energy sector. Ørsted, for example, has cited rising supply chain costs and the merchant risk inherent in government auctions as key challenges. In light of this, the government has two main options: increase subsidies on the price paid for renewable energy, or provide incentives that reduce input costs for producers. Government subsidies are not new to the energy sector. Nuclear energy, for example, has long benefitted from guaranteed energy purchase prices.

Fiscal levers to incentivise renewables investment

The UK government has a vested interest in encouraging the growth of domestic energy production for various reasons:

• It creates UK jobs.
• It generates tax revenues once the project starts supplying energy to the grid.
• It bolsters the UK financial markets (assuming UK lending).
• It meets the stated aim of energy independence.

So, what can be done to boost UK energy production? A seemingly obvious answer would be to scrap the limits on the total subsidy on offer to developers in the government auctions. However, this is likely to be met with public hostility as it could add many billions of pounds a year to national electricity bills.

Instead, more targeted fiscal incentives could deliver meaningful results without straining public finances or public opinion. For example:

• A super-deduction on qualifying capital allowances.
• A higher or uncapped limit on tax-deductible interest expense for renewables projects.
• Tax credits for businesses that achieve carbon neutrality, or better, carbon negativity.
• A dedicated innovation relief specifically for renewable activities that demonstrably reduce carbon emissions.
• Carbon-based tax credits, awarded relative to the amount of carbon saved.

Without government intervention, more renewables projects risk being scrapped, turning the ambitious target into little more than a pipe dream. Aside from the Industrial Strategy, the government needs to remove uncertainty for investors in the upcoming auction for new clean power projects and provide transparency on the rising supply chain costs affecting these developments.

How we can help your renewables business

We have extensive experience working with clients in the renewables and cleantech sectors and are committed to supporting businesses in the industry.

We understand the challenges of working in this dynamic environment and how we can help you respond to the challenges and opportunities it presents.

Our renewable energy team is made up of industry specialists, renewable energy consultants and other experts who offer maximum insight and value throughout the project lifecycle of your renewables business.

If you would like to discuss the impact for your energy and natural resources business, please contact Sheena McGuinness.