Informer Issue 612 - 22/08/2023

Harnessing the potential of flexible electricity usage could avoid the need to construct the equivalent of four additional gas-fired power station, according to a new report.

The analysis by Cornwall Insight and Smart Energy GB found that greater domestic flexibility could also save £2.5 billion, provide significant environmental benefits and reduce the need for upgrades to power infrastructure.

Households that participate in flexible electricity initiatives could stand to cut wholesale electricity costs by more than 14% by 2030 and 50% by 2040.

The report said the analysis shows the “immense potential” of flexible household electricity use to support GB as it journeys towards a renewables-based system.

“It is clear that by empowering consumers to become the architects of their own energy usage as well as supporting home decarbonisation technologies across the consumer base, the government can reduce expenses, alleviate strain on the grid, and even eliminate the need for additional costly gas-fired power stations,” said the report. Read more

Ofgem has given its backing to plans for an amnesty to allow some generators to exit the UK’s grid connection queue without incurring the usual charges.

National Grid ESO’s Transmission Entry Capacity (TEC) amnesty could free up to 8GW of unwanted capacity across some 50 projects.

It would also enable other projects to connect to the grid faster than is currently possible. The existing TEC queue is now over 340GW of new generation capacity.

Although generators usually have to pay cancellation charge to exit a grid connection contract National Grid ESO plans to waive the fees up until September 2024.

It will only apply to projects who already expressed an interest in leaving the register during the amnesty window and have supplied relevant cost information. Read more

A new one-stop shop has been launched to help smaller firms reduce energy bills and cut carbon emissions.

The UK Business Climate Hub includes a carbon calculator and tools to help businesses measure, track and report on their emissions.

It offers advice on areas including sustainable sourcing, reducing emissions from freight and the most cost-effective ways of installing solar panels and electric vehicle (EV) charging points.

There are 5.5 million SMEs in the UK, with business and industry accounting for around 25% of emissions. Research shows that 90% of SMEs are keen to tackle climate change, but find it difficult to know how or where to start to find the right solutions to reduce their carbon footprint.

Minister of State for Energy Security and Net Zero, Graham Stuart, said: “The UK has cut its emissions more than any other major economy in the world. More and more businesses are recognising the business benefits of reaching net zero and we’re determined to empower them to do so.

“Whether it’s fitting a low-carbon heat pump, generating energy with solar panels, or reducing the emissions from shipping goods, the new support will ensure businesses can drive towards net zero.” Read more

The number of companies setting science-based targets to reduce their emissions has risen sharply, according to new figures.

The Science-Based Targets Initiative said 87% more businesses had their targets validated (1,097) in 2022, more than the entire previous seven years combined (1,082).

Companies representing more than a third of the global economy (34%) by market capitalisation had set or committed to setting science-based targets by the end of 2022. 69% of FTSE companies had set science-based targets and 42% of S&P companies.

SBTi’s CEO Luiz Amaral said the figures showed the “enormous demand from the business world for credible, ambitious targets for reducing greenhouse gas emissions”.

“As catastrophic floods in Pakistan to deadly heatwaves in Europe in 2022 demonstrated, the human and economic costs of climate change are already being felt around the world. Companies must act now.” Read more

Few offshore wind projects could make it through the next CfD round leaving UK bill payers £1.5bn a year worse off, according to a report.

The Energy and Climate Intelligence Unit (ECIU) warned that Treasury rules don’t take account of predictions that the gas price will stay high and put an arbitrary limit on the number of farms that can be contracted under the scheme. It pointed out the previous auction round didn’t max out its budget and the current auction could secure as little as around 2GW of offshore wind.

Although the Government recently increased the budget for the auction to £190m, the ECIU warned this is likely to make little difference to the outcome of the auction.

Jess Ralston, Energy Analyst at the ECIU said: “Government seems to be focussed on North Sea gas licences and tax breaks for oil companies that won’t bring down bills while tying up offshore wind farms that generate electricity cheaper than gas in red tape.

“Even with inflation pushing costs up for offshore wind, it will still generate electricity much cheaper than gas power stations. Stifling wind farms pushes up bills. Treasury’s rules seem to be actively working against bringing them down.” Read more

Ofgem has issued a call for input on engaging domestic consumers in energy flexibility. It puts forward a view that key to unlocking large-scale engagement is an attractive, simple, and seamless customer journey.

Ofgem has published its responseto Department for Energy Security and Net Zero consultation on the Strategy and Policy Statement for Energy Policy.

Energy UK has published the latest in its Clean Growth Gap series of reports. It looks at the UK’s energy transition in a global context.

The Department for Energy Security and Net Zero has published the outcome of its consultation into the role of biomass in achieving net zero.

The Capacity Market prequalification submission window is now open. Participants can apply to bid for agreements to receive capacity payments based on the auction clearing price for the 2024/25 and 2027/28 delivery years by 5pm on 19 September.