Posted on: 21/05/2024
This week's energy news headlines: Business leaders say they need more government support for the Net Zero transition; The system operator forecasts balancing costs will rise out to 2030; Faster progress is needed on the energy infrastructure needed to accommodate more renewables. Our industry round-up includes the latest updates from Government departments and energy regulators
Energy UK has published its response to the National Infrastructure Commission Consultation on the Electricity Distribution Network.
Ofgem has opened an investigation and served a provisional order to Farringdon Energy Limited over whether it is in compliance with rules around treating microbusinesses fairly and their operational capability.
Ofgem has outlined its decision on proposed BSC modification P467 to remove bids from the cash out stack by winter 2024/25 as an enduring solution.
The Department for Energy Security and Net Zero has published a call for evidence to explore new ways to transport captured CO2 that would enable more UK industries to adopt carbon capture technology.
EnergyUK has published its response to the second consultation on REMA.
The latest monthly data has been published on the number of certificates issued for generation under the Renewables Obligation.
Business leaders have called for more government support to help them play their part in the Net Zero transition.
A survey of more than 1,000 senior decision-makers highlighted concerns over cost and political uncertainty as significant barriers to progress.
A lack of policy clarity and difficulties finding suppliers with strong Net Zero credentials were also cited.
Scott Steedman, Director-General of Standards at BSI which carried out the survey, said: “Non-financial reporting will soon force businesses that don’t show leadership in their supply chains to become followers.
“From Government, now is the moment for a clear policy environment that encourages organisations to invest and innovate towards net zero.”
Balancing costs are projected to rise out to 2030, according to a new report from the system operator.
In its first Annual Balancing Cost Report, National Grid ESO said overall balancing costs in 2023/24 are £2.4bn compared £4.1bn in the previous year, partly due to lower wholesale energy prices and implementation of ESO initiatives.
However, future balancing costs will “continue to be subject to a range of drivers”, notably changes to the GB generation mix and network build.
Although wholesale prices have been a major driver of balancing costs in recent years, constraint costs are also rising due to significant changes to the GB generation mix, with up to 80 GW connecting by 2030 in its most ambitious decarbonisation scenario.
“Key decisions that will impact balancing costs include those considered in REMA, and those in Network Development, Connections, and new markets to aid balancing,” it said.
Failure to go “further and faster” over the next five years on plans for infrastructure delivery will threaten climate targets.
The latest annual review from the National Infrastructure Commission focused on areas including energy where it noted that the share of electricity generated from renewable sources has grown to a record 47 per cent in 2023.
Although the commission said there have been “welcome moves” to accelerate the rollout of transmission infrastructure to get electricity where it is needed, changes to the planning system for onshore wind developments are not sufficient for it to meet its potential.
It also said last minute changes to policy have created uncertainty and reduced the incentives to install a heat pump, which risks slowing the transition from fossil fuel heating. The Government is currently off track to meet its target of 600,000 heat pump installations by 2028.
The UK government is planning to build a new nuclear reactor in Scotland, according to Scottish Secretary Alister Jack.
Jack told a House of Lords committee he had asked the UK energy minister to plan for such a site as part of a UK-wide strategy.
However, Scottish First Minister John Swinney said his government would have “nothing to do with nuclear power”.
Jack told the Lords committee: "On the small nuclear reactors, I have asked the energy minister to plan for one in Scotland.
"I believe that in 2026 we'll see a unionist regime again in Holyrood and they will move forward with that."
More solar power has an important role to play in meeting the UK’s energy needs but the best agricultural land should be prioritised for food production, Energy Security Secretary Claire Coutinho has said.
The Government is setting out a number of steps to strengthen food security as part of the UK’s national resilience including ensuring large solar projects avoid the best quality land where possible.
Instead it said solar projects should be developed on brownfield land, contaminated land, industrial land, and lower quality agricultural land.
Coutinho said solar needed to be delivered in a sensible way, ensuring developers and planning authorities consider the cumulative impact projects can have on local communities, especially where they are facing a high volume of applications.
“I want to see more solar on rooftops and where that’s not possible, for agricultural land to be protected; and for the cumulative impact on local villages to be considered where they are facing a high number of solar farm applications,” she said.
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