Posted on: 10/10/2023
This week's energy news headlines: The renewables and clean tech sector could double by 2035 but major hurdles remain; Carbon allowances under the ETS face a cut next year; A new report says wind and solar could meet all of Britain’s energy needs; Our industry round-up includes the latest updates from Government departments and energy regulators.
The UK energy transition is facing significant challenges which are delaying progress towards Net Zero, according to an industry body.
In its latest annual review, the REA said while progress on renewable power remains positive, without supportive Government policy measures for areas such as heat and transport it will “continually be a challenge” for the UK to meet its legally binding commitments.
The review also said the renewables and clean tech industry is currently on track to double in value to £46bn by 2035. “However, political uncertainty and rolling back on green policies has meant that renewable developers are hurting, and international investment risks going elsewhere,” it warned.
“With the right policy and regulatory environment, the Government can ensure that these figures are exceeded, and the UK can continue to be a world-leader.”
The number of carbon allowances available for companies to buy in 2024 under the UK’s Emissions Trading Scheme is set to fall to the lowest-ever level.
The Government has announced there will be 69 million allowances available, 12.4% fewer than in 2023. By 2027, this will fall to around 44 million – a 45% reduction on 2023 - before reaching around 24 million by 2030.
It said the move was in line with the UK’s “ambitious” net zero strategy. Through the scheme’s auctions process, companies in industries including manufacturing, power and aviation are required to buy allowances for every unit of carbon they emit. With fewer available to buy, these sectors will need to take further steps to cut their emissions.
The Government said it wanted to give industries the “confidence to decarbonise, by investing in efficiency measures and moving away from fossil fuels to cleaner, more secure energy”.
Wind and solar could comfortably meet Britain’s energy needs in the decades ahead, according to a new report.
The University of Oxford’s Smith School of Enterprise and the Environment said up to 2,896 TWh a year could be generated by wind and solar, against the demand forecast of 1,500 TWh/year.
“This is a question of ambition rather than technical feasibility,’ insists lead author Dr Brian O’Callaghan.
“The UK is already lagging in the global green race. Instead of hitting reverse, we should be turbocharging on renewables with US-style incentives and gearing up our grid for the surge that is already underway.”
The analysis anticipates offshore wind would produce the bulk of the energy, 73% (2,121 TWh/year) with onshore wind contributing around 7% (206 TWh/year).
The scale of the economic opportunity presented by floating wind has been highlighted with figures showing the pipeline of projects has increased by almost a third in just 12 months.
RenewableUK said global capacity had risen from 185GW to 244GW across 285 projects at all stages of development.
So far, 227MW of floating wind are fully operational across 14 projects in 7 countries. Norway has the most with 94MW across 3 projects followed by the UK with 80MW across 2 projects.
Nearly two-thirds of floating wind capacity announced so far worldwide is being developed in European waters (160GW) including 14% in the UK.
“This report shows that although the UK is a world leader in floating wind, other countries are eyeing the massive economic opportunity offered by this innovative technology and are determined to get a slice of the action. The international competition for investment is intensifying rapidly,” said RenewableUK chief executive Dan McGrail.
Plans to rollout out small modular reactors (SMR) as part of the Government’s revival of nuclear energy have taken a step forward.
Six companies’ designs have been chosen to progress in a competition supporting the development of the innovative technology.
The designs – from EDF, GE-Hitachi Nuclear Energy International, Holtec Britain, NuScale Power, Rolls Royce SMR and Westinghouse Electric Company UK – are seen as the most able to deliver operational SMRs by the mid-2030s. The next stage of the process will be launched as soon as possible where successful companies will shortly be able to bid for government contracts.
Energy Security Secretary Claire Coutinho said: “SMRs will help the UK rapidly expand nuclear power and deliver cheaper, cleaner, and more secure energy for British families and businesses, create well-paid, high-skilled jobs, and grow the economy.
“This competition has attracted designs from around the world and puts the UK at the front of the global race to develop this exciting, cutting-edge technology and cement our position as a world leader in nuclear innovation.”
Energy UK has published its response to Ofgem’s Call for Input on engaging domestic consumers in energy flexibility.
The Department for Energy Security and Net Zero has published a consultation to identify emerging generating technologies that may be eligible to participate in capacity market auctions. It closes on 1 November.
Ofgem has published an open letter providing an update on the review of additional wholesale costs as part of the price cap outlining a decision to reschedule the intended follow-up consultation from late September to late November/early December 2023 to ensure the analysis and calculations are robust.
The Scottish Government has published a report on responses to the public consultation on its draft Energy Strategy and Just Transition Plan.
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