Posted on: 22/06/2021
This week's energy news headlines: Increasing electrification means it is vital the UK prepares for the impacts of climate change on the grid; Figures show new wind capacity reached an all-time last year and further strong growth lies ahead and BEIS confirms it plans to stage two Capacity Market auctions next year.
The risk of climate-related failure of the UK power system is rising and needs addressing urgently, according to a new report.
The Climate Change Committee (CCC) warned that security of supply of the electricity system is one of the key priority areas that need immediate focus to protect the public and the economy.
Increased electrification of energy means the system is more vulnerable to any impact of extreme weather driven by climate change such as flooding, water shortages, increased temperatures, storms and sea levels.
The CCC highlighted the blackout seen in August 2019, when a lightning strike led to issues which left a million people without power and stranded train passengers for hours, as an example of the impact weather can have on energy supply.
The report also stressed that the growing proportion of renewable generation poses weather-related challenges, for example during times of low wind and cold weather.
The CCC has urged the Government to work with Ofgem and the industry to review the approach to electricity system design and risk assessment, ensuring that the more central role of electricity in the UK’s energy system is taken into account.
“The severity of the risks we face must not be underestimated,” said Baroness Brown, chair of the CCC’s Adaptation Committee.
“A detailed, effective action plan that prepares the UK for climate change is now essential and needed urgently.” Read more
Continued strong growth in global wind capacity is expected in 2021 after figures showed last year developers added a record 97GW.
BloombergNEF's latest Global Wind Market Outlook forecasts Europe is set to see its highest-ever year of onshore wind additions in 2021, although overall installations across the world are expected to dip to 88GW.
Offshore wind is expected to top 10GW of annual installations for the first time in 2021 and hit over 30GW by 2030.
BloombergNEF predicts cumulative wind capacity will double from 2021 to 2030, reaching 1.7TW by the end of the decade.
It also forecasts over 15GW of onshore wind turbines will be retired in 2030, triple the capacity taken offline this year. Two thirds of turbines taken out of action will be in China. Read more
Energy Minister Anne-Marie Trevelyan has confirmed plans to hold two Capacity Market auctions next year.
In a letter from BEIS to system operator National Grid ESO, Trevelyan said the Government intends to hold the T-1 auction for 2022 to 2023 and T-4 auction for 2025 to 2026.
BEIS said it will set out the auction parameters for the auctions “in due course”. Gas projects accounted for almost two-thirds of capacity under contracts awarded under the latest T-4 Capacity Market auction held earlier this year.
The auction to provide back-up power in 2024 and 2025 cleared at £18/kW/year, up from £15.97/kW/year in last year’s round. Around 40GW of de-rated capacity was procured, including 1.7GW of new build generation. Demand-side response secured 28% of contracts.
The latest T-1 year-ahead auction had cleared at a record high price of £45/kW/year with batteries, demand-side response, and gas projects securing the lion’s share of contracts.
The electricity system is on track for 100% zero carbon periods in just four years’ time, according to the system operator.
National Grid ESO said latest electricity records – including last month’s highest-ever share of wind generation - have highlighted the growth in renewable electricity generation and progress towards zero carbon operation of the GB electricity system.
It said although its control room needs to draw on conventional power plants, typically gas, by 2025 it will have transformed its operation of the electricity system, so that when there is enough zero carbon generation available, it can deliver electricity without using any fossil fuels.
Since 2016 Britain’s electricity has been over two-thirds zero carbon for 5,000 half hour periods, over 100 days cumulatively.
Fintan Slye, National Grid ESO Executive Director, said: “We’re confident that by 2025 we will have periods of 100% zero carbon electricity, with no fossil fuels used to generate power in Great Britain. As with coal free operation of the grid, these may be short periods at first but will still be a significant milestone on the road to net zero and these periods will quickly extend.”
A House of Lords committee will this week question experts on the role of regulator Ofgem in achieving net zero and whether any changes are needed to its powers.
The Industry and Regulators Committee is holding a new inquiry into Ofgem and is staging its first evidence session this week.
Three academics will be asked for their views on Ofgem’s objectives and powers, its work in protecting the interests of consumers, and its relationship to Government and Parliament.
The committee is also expected to seek opinions on whether Ofgem’s work on net zero conflicts with consumer interests, the implications of the target for the security of the UK’s energy supply and how effective Ofgem is as a regulator.
Meanwhile, a taskforce reporting to the Prime Minister has called for a ‘fundamental reform’ of regulation to reflect the need to shift to a smarter energy system.
The Taskforce on Innovation, Growth and Regulatory Reform said the energy supply licence regime is “no longer fit for purpose”. Read more
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