Informer Issue 594 - 18/04/2023

The Government has set out plans for a major reform to its flagship renewables support scheme aimed at attracting further investment in capacity and improving energy security. Under the proposals for the future of the CfD scheme, it is seeking views on reviewing applications based on a project’s contribution to the “wider health” of the renewables industry and not just on the ability to deliver low-cost energy. Supply chain sustainability, addressing skills gaps, innovation and enabling system and grid flexibility are among the ‘non price factors’ which could be considered alongside price when submitting bids. The Government cited an example that more investment in supply chain sustainability would help to reduce its carbon impact and access the resources and materials needed to deploy sustainability at scale in the longer term. Minister for Energy Security and Net Zero Graham Stuart said the CfD scheme has been “hugely successful” in supporting British low-carbon electricity generation driving down costs for consumers.
“But we want to go further to ensure we maximise the scheme’s potential to improve energy security and ensure renewable energy developers can make the necessary investment in supply chains and innovation, which will ultimately make for a stronger sector and help our economy to grow. “This potential reform to the scheme to introduce non-price factors presents a solution to grow the renewable energy supply chain as we accelerate our energy transition plans to power more of Britain from Britain.” Read more

Global power sector emissions are likely to have peaked in 2022 marking the start of a new era, according to a new report. Climate think-tank Ember’s latest Global Electricity Review said clean power growth is likely to exceed electricity demand growth in 2023, the first year for this to happen outside of a recession. “With average growth in electricity demand and clean power, we forecast that 2023 will see a small fall in fossil fuel generation, with bigger falls in subsequent years as wind and solar grow further. A new era of falling power sector emissions is close,” it predicted. The report also found that wind generation capacity in the UK jumped by 23% last year and highlights the UK’s progress in reducing coal power. The UK has seen the largest fall in coal generation in the G20 with a decrease from 23% in 2015 to 1.6% in 2022. Overall, the report found that global electricity is now at its cleanest-ever, as wind and solar now generate 12% of global power. “A new era of falling fossil emissions means the coal power phasedown will happen, and the end of gas power growth is now within sight. However, it all depends on the actions taken now by governments, businesses and citizens to put the world on a pathway to clean power by 2040,” said Małgorzata Wiatros-Motyka, Senior Electricity Analyst for Ember. Read more

Three businesses are to share a £30m funding pot from the UK Government to design and develop new energy storage technologies. The winning businesses include Synchrostor, which is building a pumped thermal energy storage grid-connected demonstration plant. Invinity Energy will also receive funding to develop and manufacture a 7MW, Vanadium Flow Battery (VFB), the largest in the UK. Cheesecake Energy will receive backing to test their FlexiTanker technology which stores electricity using a combination of thermal and compressed air energy storage. The Government said capturing and storing energy for use when and where it is needed will play an essential role in powering more of Britain from Britain and increasing the country’s energy security. Minister for Energy Security and Net Zero Graham Stuart said: “Storing energy for longer periods is vital to build a robust and secure energy system and ensure that renewable energy is used efficiently. “Fortunately the UK has a wealth of pioneering businesses that are making their mark on this industry.” Read more

Ofgem has announced the Renewables Obligation buy-out price for the 2023-24 period will be £59.01 per certificate, up more than 11% on the previous figure. The price is the figure suppliers will need to pay for each ROC they do not present towards compliance with their 2023-24 obligation. The previous year’s figure was £52.88. The regulator has also set the mutualisation threshold for 2023-24 for England & Wales at £72.2m, up from £65.8m in the previous period, and £7.2m for Scotland, up from £1.54m. Mutualisation will be triggered in the event of a relevant shortfall in the buy-out fund. It was triggered for the fifth year in a row last year after a number of suppliers failed to meet their obligations. The total shortfall left by energy suppliers for 2021-22 stood at just under £120m. The regulator said that of the suppliers who failed to comply, 27 were either in administration or have had their licence revoked. Under mutualisation, the shortfall of money owed under the renewables support scheme is shared among suppliers who have paid into the scheme. Read more

The G7 group of world leaders has pledged to accelerate the shift to low carbon energy at their meeting in Japan. However, they have not set a timetable for phasing out coal-fired power plants during two days of talks in Sapporo which were held ahead of a G7 summit in Hiroshima next month. The G7 aims to increase offshore wind capacity by 150GW by 2030, and increase solar PV to over 1TW by 2030. It has also pledged to improve system flexibility across its member countries. The G7 nations account for 40 per cent of the world’s economic activity and a quarter of global carbon emissions. The We Mean Business Coalition, which works with representatives of over 10,000 large and small companies to accelerate climate action, has urged the G7 to take bold action on climate issues. Measures it calls for include communication of the national action plans that demonstrate delivery of the 2016 G7 commitment to eliminate fossil fuel subsidies by 2025. Read more

The Department for Energy Security and Net Zero has launched an open consultation on the introduction of non-price factors into the Contracts for Difference scheme. The consultation closes on 22 May.

Ofgem has published the Renewables Obligation Buy-out Price, Mutualisation Threshold and Mutualisation Ceilings for 2023-24. The buy-out price is £59.01 per RO Certificate (ROC).

The Department for Energy Security and Net Zero has published the latest Energy Trends: UK Renewables report including data on capacity, electricity generation and liquid biofuels consumption.

The Data Communications Company (DCC) is seeking views on the draft Testing Approach Document for the Market Wide Half Hourly Settlement (June 24) Release. The document defines the approach to testing to be undertaken by both DCC and Testing Participants. The consultation closes on 2 May.

National Grid ESO has published the Code Administrator Modification Tracker for April 2023.