Informer Issue 508 - 20/04/2021

Cold weather in the first quarter of 2021 saw GB electricity demand recover to typical pre-Covid levels, according to new data. Figures from consultancy EnAppSys shows demand at the transmission system level was 56TWh, close to the 55.7TWh seen in the same period last year. EnAppSys said wholesale prices were also “notably” higher this Q1 than last Q1 and compared to Q4 2020. The average system price was £61.98/MWh, the highest in any Q1 since 2014. High demand combined with low wind generation resulted in several tight periods in the quarter, with balancing needed to meet demand resulting in very high system prices on occasion. The quarter also saw a peak system price of £4,000/MWh on 8 January, the highest since the £4,993.88/MWh seen back in 2001, soon after NETA go-live. Similar robust levels of demand were experienced across Europe, with the continent as a whole seeing around 10TWh more demand this Q1 than last. Read more

A group of more than 40 industry associations from the UK and Europe have called for emissions trading schemes to be linked up before the COP26 climate summit in November. The International Emissions Trading Association (IETA) said that if the UK wants to reach net-zero, linking the UK’s new ETS to the EU version is critical as it would create a level playing field in terms of carbon pricing, avoid competitive distortions, and lead to alignment of cost implications for industry. Adam Berman, European Policy Director at the IETA said: "It will allow emissions reduction targets to be reached more quickly, easily, and at better value. A larger market means a better market with more liquidity, fewer competitive distortions which damage industry, and more decarbonization opportunities." Following Brexit, the UK left the EU ETS at the end of 2020 and launched a domestic version in January 2021, with trading set to start in May. Other signatories to the letter sent to government leaders include Energy UK and RenewableUK. Read more

The number of companies committing to buy 100% renewable energy through the RE100 campaign has now hit 300 in what it said had now become an “extraordinary business movement”. The latest businesses to join the initiative include global healthcare company Novartis, brewer Heineken, LG Energy Solution and electronics business Epson. RE100 said the growth of the campaign is “a beacon of the remarkable transition that has happened in the energy landscape over the last decade.” “At the heart of this change has been a rapid shift in the cost of renewable energy. A survey of RE100 members in September last year found that almost 70% of respondents cited cost savings as a driver for switching to 100% renewable electricity,” it said. “As companies’ awareness of the impacts of climate change has grown, buying renewables has moved from the fringe of corporate social responsibility practice to become a core element for business in securing their energy needs whilst driving down emissions and building positive relationships with employees, customers, investors and governments,” it added. More than 77 RE100 members already source over 90% renewable power, and more than 40% of total electricity usage across the membership comes from renewables - double the proportion of renewables in the mix compared to 2015. Read more

The pipeline of renewable energy and storage projects across the UK now stands at 86GW, according to new figures. Just under half the total (40.6GW) have a grid connection option confirmed but have not yet submitted a planning application, according to the latest figures from Cornwall Insight’s Renewables Pipeline Tracker. A further 13.5GW is awaiting planning approval. A total of 24.5GW of new capacity is marked as ‘awaiting construction’ while 7.8GW is currently ‘under construction’. Lucy Dolton, analyst at Cornwall Insight, said increased activity was being seen in sites classified as ‘scoping’, with recent developments in the offshore leasing rounds being undertaken by the Crown Estate and Crown Estate Scotland The Renewables Pipeline Tracker now accounts for these sites in its analysis to help assess the potential trends from the next Scotwind Leasing round and future Contracts for Difference (CfD) Allocation Rounds. "While the auction parameters are yet to be announced, the fourth Allocation Round (AR4) of the CfD scheme is firmly on the horizon in 2021. With AR4 set to offer the first Pot 1 auction since 2015, it is also unsurprising to see an increase in the number of onshore wind and solar PV sites entering the development pipeline with the aim of accessing the CfD,” said Dolton. Read more

Boris Johnson will announce new climate change commitments this week that will put the UK on track to lower carbon emissions by 78 percent by 2035. To meet the goals, more electric vehicles, low-carbon heating, renewable power, and, for many, a reduction in meat and dairy consumption will be needed. For the first time, climate law will be applied to include international aviation and shipping. The prime minister's commitments, which will become law, bring forward the current target for reducing carbon emissions by 15 years. This would be a world-leading position. Homes will need to be much better insulated, and people will be encouraged to drive less and walk and cycle more. Aviation is likely to become more expensive for frequent fliers. Read more