Posted on: 13/02/2024
This week's headlines: The UK becomes the first’s major economy to halve emissions; Labour defends dropping a pledge to spend £28bn a year on the green economy; The system operator is to admit up to 300MW of aggregated assets into the Balancing Mechanism. Our industry round-up includes the latest updates from Government departments and energy regulators.
Energy UK has published its response to a consultation on strengthening the economic regulation of the energy, water, and telecoms sectors.
The latest monthly data on the number of certificates issued for generation under theRenewables Obligation has been published.
Ofgem has published its decision for amendment to the terms and conditions related to balancing in relation to proposed Balancing Reserve Service.
Ofgem has launched a consultation on proposals that could reduce the costs to consumers upon failure of a supplier. The proposals around the Supplier of Last Resort would aim to recover some of those costs through the insolvency process where the failed supplier has residual value after paying out certain creditors.
Dramatic growth in renewable generation has helped the UK become the first major economy to halve its emissions.
The 50% fall between 1990 and 2022 is largely due to the shift away from using coal for power generation. In 2012, coal provided almost 40% of UK electricity, but later this year it will be zero. At the same time renewables now account for more than 40% of the country’s electricity – up from just 7% in 2010.
Energy Security Secretary Claire Coutinho pointed out the cut in emissions had been achieved despite growth in the economy of 80%.
“These statistics show the UK is making significant progress towards net zero. While statistics from recent years remain impacted by the unprecedented economic impacts of the coronavirus pandemic, the long-term trend shows that the UK is rapidly driving down emissions,” she said.
Labour has pulled back from a pledge to spend £28bn a year on the green economy if it wins the upcoming general election.
The plan was first announced in 2021 but Labour leader Sir Keir Starmer blamed the “damage the Tories have done to the economy" for dropping the spending commitment. "Every family knows that they've had to adjust their plans. We've now had to adjust our plans,” he said.
However, Labour stressed it was still committed to a major expansion of areas including wind generation, more environmentally-friendly steel production and the clean energy company GB Energy.
Reacting to the announcement, Greenpeace UK’s head of politics, Rebecca Newsom, said: “Dropping the pledge would be weak political, economic and climate leadership from Starmer before he’s even got his feet under the table. This is a vision worth fighting for, not retreating from.”
Capacity from small scale assets, such as EV chargers and electric heating systems, will be used to balance the electricity system under a move by the system operator.
National Grid ESO said it will be admitting up to 300MW of aggregated assets into the Balancing Mechanism (BM) to enable for greater consumer participation in flexibility.
The ESO said the assets - each with an individual capacity of less than 1MW – will be allowed into the BM as part of an aggregated unit with relaxed requirements for operational metering. The ESO said the move would allow a greater range of participation from different types of assets.
Ofgem has also approved the ESO’s new Balancing Reserve service, which it expects to go live next month. The service will see the ESO move to day-ahead procurement of the energy reserves needed to respond to system demand in real time, rather than the current on-the-day system.
Solar industry leaders have warned than although many projects will be connected to the grid more quickly than had been expected they won’t be able to able to supply power to it for years.
Solar Energy UK said changes to the way the queue for connections is managed will accelerate projects considered most likely to go ahead.
But it said as part of the reforms, output has to be kept within certain limits meaning that it may be curtailed until grid upgrades are ready, which may not be until the 2030s.
Solar Energy UK Chief Executive Chris Hewett said: “The idea of offering a grid connection that you can’t use and calling that some sort of success is absurd. It is like being told you can open a shop on the High Street, as long as you keep the doors locked.”
The industry body raised the issue at the House of Commons’ Environmental Audit Committee as part of its inquiry into enabling sustainable electrification of the UK economy.
A House of Lords committee has raised significant concerns over the role of UK regulators and their ability to operate with genuine independence from Government.
The Industry and Regulators Committee says a fresh approach to overseeing UK regulation – including of sectors including energy and the environment - is required.
The Committee found that some regulators are being overloaded with objectives, without clear guidance on how they should prioritise between them.
It also said the waters have been muddied between regulatory and political issues, “resulting in the Government’s strategic guidance effectively ducking decisions on which it should give a view”.
Lord Hollick, Chair of the inquiry, said: “Independent regulators must have the confidence to tell the Government and the public about the serious problems facing their sector and be able to set out proposals to meet them with clarity, efficiency and transparency.
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