Informer Issue 565 - 20/09/2022

Further details on the business energy bill support scheme are set to be announced this week, with financial help due to start from next month. Although the Government said the scheme might not be ready in time given the complexities involved, payments would be backdated to 1 October. The Government pointed out businesses have not benefited from an energy price cap and are not always able to fix their energy price through fixed deals, and many are reporting projected increases in energy costs of more than 500%. It plans to announce a six-month support scheme for businesses and other non-domestic energy users with ongoing, focused support for vulnerable industries following that initial period. The Federation of Small Businesses (FSB) said the support would come as “a huge relief”. FSB national chair Martin McTague said: “Many have been pushed to the brink by crippling energy bills, and so it is welcome that help is on the way.” Meanwhile, reports have suggested work on the Energy Security Bill could be paused while the Government tackles the energy cost crisis. Read more

Many of the world’s leading investors have urged global governments to raise their ambition on climate change ahead of the COP27 summit later this year. Over 500 organisations together managing some $39 trillion of investments have called for greater commitment to shift away from fossil fuels and more emphasis on disclose of climate risks by major companies. The 2022 Global Investor Statement to Governments on the Climate Crisis has been issued ahead of COP27, which is due to take place in Egypt in November. "Investors are urgently seeking to manage their exposure to climate risks and increase the contribution that their investments make to the Paris Agreement goals," the statement read. "We encourage governments to engage closely with investors to make sure these risks are effectively managed and that these opportunities are fully realised." Read more

The Government has announced plans for lower-priced long-term contracts for renewables to break the link with gas prices. New Prime Minister Liz Truss pledged to speed up deployment of all clean and renewable technologies including hydrogen, solar, carbon capture and storage, and wind as part of moves to boost security. “Renewable and nuclear generators will move onto Contracts for Difference to end the situation where electricity prices are set by the marginal price of gas,” she said. “This will mean generators are receiving a fair price, reflecting their cost of production, further bringing down the cost of this intervention.” RenewableUK Chief Executive Dan McGrail said: “Everyone will benefit from the new Prime Minister’s clear commitment to speed up the roll-out of renewables. “We’re already working closely with ministers and our member companies on proposals to break the link between the unaffordable cost of gas and the price of electricity.” Read more

Jacob Rees-Mogg has been names as the new Secretary of State at BEIS as part of a ministerial re-shuffle in the wake of the appointment of the new Prime Minister. Rees-Mogg, who previously held the post of Minister of State for Brexit Opportunities, replaces Kwasi Kwarteng who has been appointed Chancellor in the new cabinet. His appointment was criticised by environmental groups, with Greenpeace tweeting: “Jacob-Rees Mogg is the last person who should be in charge of climate and energy”. In April, he said the Government wanted “every last drop” of oil and gas to be extracted from the North Sea. In other appointments, Graham Stuart has been named as Minister for Climate at BEIS and Cop26 chair Alok Sharma remains in his role. Read more

The European Commission has announced a series of measures aimed at tackling the energy crisis including a windfall tax on generators and demand reduction targets. The commission is proposing a temporary revenue cap equivalent to £158 per MWh on generators including renewables, nuclear and lignite producers, with revenues above that level collected by European governments to help reduce bills in their countries. Commission President Ursula von der Leyen said power companies were making revenues “they never accounted for, they never even dreamt of.” The commission also wants to introduce measures to cut electricity consumption by at least 5% during peak price hours and a target for member states to lower overall electricity demand by at least 10% until the end of March 2023. The Commission said the unprecedented measures are a “necessary response to the energy supply shortages and high energy prices affecting Europe”. Read more

In Policy news, with the Government announcing its Energy Bill Support package, a factsheet outlining support for businesses and non-domestic consumers is now available. An updated calendar for the UK Emissions Trading Scheme auctions has also been published including revisions to volumes with an additional 803,500 allowances spread across auctions to the end of the year. In Consultations, the BSC panel has sent its response to Ofgem’s consultation on The future ownership of Elexon. The consultation closes on 22 September.

BEIS is also seeking views on the Government’s minded-to position for a business model to incentivise deployment of Power bioenergy with carbon capture and storage projects. Closing date is 7 October. Finally, Ofgem is consulting on its intention to issue a direction in relation to a claim by NGET for an ‘Energy Not Supplied Exceptional Event’ on the network on 24 March 2022. Closing date is 5 October. Calls for Input currently open include one from Ofgem on Data Best Practice as part of moves to support the digitalisation of the energy sector. It closes on 21 October. Read more