Informer Issue 604 - 27/06/2023

MPs have called on the Government to urgently pull together its numerous power sector decarbonisation plans into a coherent strategy. A hard-hitting report by the Public Accounts Committee voiced scepticism over the credibility of growth targets for nuclear, solar and wind and said it was “unconvinced” the private sector has enough clarity to provide investment. The committee said that the Government has “no overarching delivery plan” to decarbonise the power sector by 2035. Although it has many separate ongoing decarbonisation plans, its ambitions are jeopardised by the lack of an integrated and coherent delivery plan which it said should be pulled together by autumn 2023 at the latest. Dame Meg Hillier MP, Chair of the Committee, said: “There are just twelve years left for the Government to meet its low carbon energy target, and much still to do if this is to be achieved – and at a cost the taxpayers and bill payers can bear while ensuring the lights stay on,” she said. “We need an overarching plan charting the way, to provide much-needed confidence to the businesses and consumers who are needed to deliver it.” Read more

A clear Government target for deployment of tidal stream energy in the UK could help unleash a wave of private sector investment into the sector, according to a new report. Academics at the Grantham Research Institute on Climate Change and the Environment said globally the sector remains “very much in its infancy”. Barriers to its development have included high technology costs, poor access to government subsidies and uncertainty over environmental impacts. However, the report points out that the UK is currently the global leader in tidal stream energy development with the most generation capacity and the largest number of developers. The UK has around 10 MW of tidal stream generation capacity installed, which represents over half of the world’s currently operational capacity. The report lists a series of recommendations to capitalise on the potential including an explicit statement of government ambition and consultation with industry to explore which mechanisms can most effectively carry early-stage tidal stream concepts to commercialisation. Read more

Ofgem has launched a consultation on its proposals for recovering the costs of setting up the new Future System Operator (FSO) body. The FSO will have responsibilities across both the electricity and gas systems to drive progress towards Net Zero while maintaining energy security and minimising costs for consumers. The Electricity System Operator National Grid and National Grid Transmission forecast spending approximately £180-£210m initially to establish the FSO with the main costs being around IT work. “To enable the introduction of the FSO, the ESO and NG will need to carry out a substantial and complex programme of work,” Ofgem points out. The regulator has developed funding proposals to enable the costs to be recovered. The consultation is open until August 2. Read more

The Government looks set to change its mind on plans to introduce a hydrogen levy on energy bills. In an interview with the Daily Telegraph, Energy Security Grant Shapps said he now doesn’t support a levy on households to fund the production of hydrogen to be used instead of fossil fuels and believes the costs should be met “further up the chain”. The annual levy has been estimated to add about £118 a year to energy bills from 2025. Shapps said it was vital to get the hydrogen industry up and running given its huge potential for energy storage, powering industry and export opportunities. But he stressed he didn’t want to see “people’s household bills unnecessarily bashed by this”. Read more

Awareness of Net Zero and support for renewable energy remain among the British public remains high, according to the latest findings of a regular survey. The Public Attitudes tracker carried out by the Department for Energy Security and Net Zero found 89% of respondents said they were aware of the concept of Net Zero and almost half said they knew at least a “fair amount” about it. The tracker also found that 82% of respondents said they were at least fairly concerned about climate change, and 39% said they were very concerned. The results showed 85% of people said that they supported the use of renewable energy, with 51% describing themselves as strongly supportive. In terms of technology, solar energy was supported by 88% of respondents, wave and tidal energy (83%), offshore wind (83%), and onshore wind (78%). Read more

Ofgem has published an update about the auditing process for Renewables Obligation Generating Stations for 2023/24. The Department for Energy Security and Net Zero has launched a consultation on the future role of the Industrial Energy Transformation Fund and the final design of Phase 3, which will help industry to improve energy efficiency and reduce carbon emissions. Energy UK has published a blog looking at the Role of the SME in the Future of the UK Energy Market. Scottish Renewables has published a response to Ofgem’s open letter on future reform to the electricity connections process. National Grid ESO has opened a consultation on the next version of its Demand Flexibility Service ahead of next winter. The consultation closes on 17 July.