Posted on: 06/09/2022
This week's energy news headlines include: The Government’s plans to help consumers and businesses through the energy crisis are set to be unveiled; Industry leaders have backed calls for new fixed priced contracts for older renewable projects; and Planning and regulatory delays are threatening targets to dramatically increase offshore wind in the UK.
Incoming Prime Minister Liz Truss is set to announce her plans to deal with soaring energy costs after winning the Tory leadership contest. Truss is widely expected to freeze domestic bills by providing suppliers with access to government-backed loans which would be repaid over many years through charges on bills. Such a move has been estimated to cost at least £100bn.
Businesses are also expected to be offered help, although it is unclear what form that may take and whether details will be announced at the same as a domestic scheme.
The incoming Prime Minister pledged to "deliver on the energy crisis" by both providing help with bills and boosting the UK's domestic energy sources. Energy UK has called for Covid-style support to help businesses, including loans and grants as well as cuts to VAT and business rates.
Dan Alchin, Director of Regulation at Energy UK, said: “The Government helped support businesses through the pandemic and sadly, this current crisis is of a similar magnitude for many of them - threatening closures, job cuts and higher consumer prices.” Read more
Proposals for new fixed price contracts for older renewable generation projects to cut bills and reduce exposure to volatile gas prices have been backed by industry leaders.
RenewableUK has leant its support to the proposals to allow wind and other renewable projects supported by the Renewables Obligation to opt for the new contracts.
The proposed scheme would see the market power price – which is set by gas – replaced by a fixed price contract to ensure that the long-term costs of keeping the renewable projects running would be met, but consumers would be shielded from market prices set by expensive gas.
RenewableUK said the proposals would build on the success of the flagship Contracts for Difference scheme which has procured large amounts of cheap renewable capacity which generate power at fixed prices and any revenue above the fixed price is paid back to consumers.
Chief Executive Dan McGrail said: "It makes no sense to allow the exorbitantly expensive cost of gas to set the price for the whole of the electricity market. This proposal is a step forward towards breaking that outdated link. It will enable billpayers to benefit more from the vast amounts of low-cost electricity being generated by wind and other renewables, which are our cheapest new power sources".
The rate of offshore wind turbine installation needs to double or even triple to meet the Government’s target of a four-fold increase in offshore renewable energy by 2030, according to a new report.
The study from industry body Offshore Energies UK (OEUK) has found that nearly half the offshore wind projects needed to reach the Government's 2030 target are only at concept stage. The report warned that projects typically take many years to move from there to operation, largely due to delays in government planning and approval processes.
Achieving Government targets will require an estimated 3,200 new, and much larger, wind turbines to be installed by 2030 – roughly three new turbines every two days. OEUK’s report will say this is achievable but only if the Government removes barriers.
Ross Dornan, lead author of OEUK’s Economic Report, said: “As of late August, OEUK knew of around 40 projects planned through to 2030 at various stages of the development cycle. Based on this pipeline, the Energy Security Strategy target is potentially achievable, but it is important to understand the associated project uncertainties and risks.
“This scale of installation is very ambitious, and it will require significant improvements to the regulatory and permitting process.”
Six nuclear technology projects across the UK have won backing to help develop the next generation of reactors.
This £3.3m funding through the Government’s Advanced Modular Reactor Research, Development and Demonstration programme will support innovations such as high temperature gas reactors (HTGRs).
The Government said the funding represents “another key step in its plans to accelerate homegrown nuclear power to strengthen the energy security”.
Energy Minister Greg Hands said: “This investment will help unlock the potential for new nuclear reactors in the UK, as we drive forward plans to boost clean, cutting-edge, homegrown technologies for our energy security, while driving down bills in the long term.
In addition, the Government is providing up to £830,000 to the Office for Nuclear Regulation and the Environment Agency to develop their capability and consider innovative regulatory approaches to high temperature gas reactors to support plans to have a UK-based demonstration project by the early 2030s.
The re-opening of the Rough gas storage site off the coast of Yorkshire has moved another step closer after the oil and gas regulator gave its approval.
The green light from the North Sea Transition Authority means the site could start operating within weeks.
In a tweet, Business Secretary Kwasi Kwarteng said: “After months of work, the UK oil and gas regulator has granted the required approvals and consents to Centrica to open the Rough gas storage facility off the East Yorkshire coast.”
The site, which used to supply around 70% of the UK’s gas storage capacity but closed in 2018, could provide some 28 billion cubic feet of gas storage capacity this winter.
Concerns over gas supplies this winter has led to moves to re-open the site. It is thought capacity would be built up gradually and the facility could eventually be used to store hydrogen.
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