Informer Issue 493 - 22/12/20

The growing focus on the net zero agenda is leading to rising demand for renewable energy from UK businesses and consumers, according to a new report.

The increasing appetite for green energy is also sending an important signal to the investment community which will support the build-out of more renewable capacity in the years ahead.

Research by investment group Alpha Real Capital and Cornwall Insight found that more than half of consumers expect to choose a renewable energy contract the next time they switch.

Although environmental benefits were the main driver, almost half (46%) also believed green tariffs were better value. More than a quarter of respondents (26%) said they are prepared to pay more for renewables and of those, over 70 per cent would pay a premium of 5 per cent or more.

Ben Hall, Group Consulting Partner at Cornwall Insight, says: “Whilst this research mainly focused on residential consumers, it’s also clear from our experience the net zero agenda is increasing demand for renewable energy from corporates and large businesses too. This growing demand will undoubtedly send an important signal to the investment community, boosting the build-out of renewable technologies that will help the UK meet its 2050 net zero goals.”

Will Morgan, Head of Renewables at Alpha Real Capital, says: “Growing demand from consumers for renewable energy underpins renewable energy markets and will lead to more investment opportunity.”

Recent research from Alpha found that over the next five years, 68% of UK pension fund investors expect allocations to renewable energy to increase.

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Onshore and offshore wind farms across Great Britain generated a record 17.3GW of energy over the weekend.

The achievement, between 1-1.30pm on Sunday, beat the previous record high of 17.1GW which was set in January.

Wind was generating 43.2% of Britain’s electricity at the time the latest record was set and National Grid ESO said wind’s contribution meant 74% of the UK’s electricity was zero carbon at the time.

RenewableUK's Deputy Chief Executive Melanie Onn welcomed the latest announcement.

"It's great to see our onshore and offshore wind farms have smashed another record, generating more power on a cold December day than ever before, just when we need it most."

“We expect to see many more records set in the years ahead, as the Government has made wind energy one of the most important pillars of its energy strategy for reaching net zero emissions as fast and as cheaply as possible. This new record is an early Christmas present we can all celebrate".

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The owner of a generation plant has agreed to pay £6m for breaching wholesale energy market regulations.

Ofgem said EDF Energy Thermal Generation (EDF ETG) inadvertently breached its licence obligations by submitting technical data to the system operator which did not correctly reflect the true capabilities of its generation plant or the amount of energy it could supply.

The regulator found that for more than two years, it frequently inflated the minimum amount of power – known as the Stable Export Limit (SEL) - that it said its West Burton B (WBB) plant could supply.

“EDF ETG did this at times when the plant was not planning to generate energy. In many cases, this meant that the ESO had to purchase more energy from the plant than needed, when the plant was used to balance the system,” it said.

Ofgem said it recognised that the generator did not consider that its approach would result in increased overall balancing costs for the system operator.

“EDF ETG instead considered that, by attempting to recover its fixed costs over greater volume, its approach could allow it to provide the ESO with lower prices.”

Ofgem said EDF ETG has taken swift action to prevent any reoccurrence and has also agreed to pay £6m into a voluntary redress fund.

“Ofgem has concluded that there is no merit in opening a formal investigation. This is owing to the company’s admissions, the steps it has taken to prevent any future reoccurrence, and the redress that it has agreed to pay,” it added.

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Scotland has become the first country in the UK to publish a hydrogen policy statement, setting out plans to invest £100m over the next five years to support the sector’s development.

The Scottish Government has set a target for renewable and low-carbon of 5GW – enough to power 1.8 million homes - and at least 25GW by 2045. It said its investment would harness Scotland’s renewable energy potential in technologies such as wind, wave and tidal power to produce green hydrogen.

Scottish Energy Minister Paul Wheelhouse said Scotland had “massive potential in this new sector”.

“Hydrogen is rapidly emerging across the international community as a sustainable solution for the decarbonisation of the economy and a key element of the energy transition picture,” he said.

Scottish Renewables’ Senior Policy Manager Helen Melone welcomed the announcement and said: “With 25% of Europe’s wind resource Scotland has the potential to become a global leader in green hydrogen, delivering 310,000 jobs and £25bn of GVA by 2045."

“Scotland’s renewable energy industry, and in particular its offshore and onshore wind sectors, look forward to delivering green hydrogen as part of the just energy transition we must make to tackle the carbon emissions which cause climate change.”

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Global coal demand is forecast to rise by 2.6% in 2021 as economies recover from Covid-19, according to a new report.

Although the pandemic saw a major drop in demand for the fossil fuel, it will rebound next year according to a new report from the International Energy Agency (IEA).

Renewables remain on track to overtake coal as the largest source of electricity generation by 2025, but the IEA said there is little sign that the world’s coal consumption is set to decline substantially in the coming years with rising demand in some Asian economies offsetting declines elsewhere.

The IEA said as coal is by far the single largest source of global energy-related carbon emissions, the trends outlined in the report pose a major challenge to efforts to put those emissions on a path compatible with reaching climate and sustainable energy goals.

The rebound in coal demand in 2021 is set to be short-lived, with coal use forecast to flatten out by 2025 at around 7.4 billion tonnes. This would make 2013, when global coal demand reached 8 billion tonnes, coal’s all-time peak. But while coal’s share in both the electricity mix and the overall energy mix are in steady decline, coal use in absolute terms is not set for a rapid decline in the immediate future.

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