Posted on: 08/10/2024
This week's energy news headlines: Ofgem believes an intervention is needed over TNUoS charges; Industry and Government join forces to boost solar acceleration; The new system operator with oversight of both electricity and gas launches. Our industry round-up includes the latest updates from Government departments and energy regulators.
The Department for Energy Security and Net Zero has published a report looking at emissions measurement and reporting approaches for the public sector.
EnergyUK has published a report looking at the UK has moved away from coal-powered generation.
The latest decisions on energy infrastructure applications have been published by the Secretary of State.
Ofgem has published its decision to accept CUSC modification CMP430 to bring in adjustments to TNUoS charging from 2025 to support the Market Wide Half Hourly Settlement Programme.
Ofgem has published an open letter seeking industry action to mitigate the investment impacts of very high projected TNUoS charges.
Ofgem believes a temporary “cap and floor” mechanism for transmission charging would help reduce investment uncertainty and protect consumers.
In an open letter, the regulator noted that “very high” projected Transmission Network Use of System (TNUoS) levels in the north of the Great Britain were a concern and that there was widespread support for some form of intervention.
Ofgem recently asked for industry views on the long-term case for significant reform of TNUoS charges and options for its future role.
“Our view is that a temporary cap and floor on wider TNUoS charges for generation would offer the most efficient type of intervention,” it said in its latest update.
“In our view, a temporary intervention is expected to be particularly helpful to reduce investment uncertainty and protect the interests of consumers. “
Ofgem is now “strongly encouraging” the system operator to raise a code modification proposal to mitigate the challenges and reduce investment uncertainty.
Energy Secretary Ed Miliband has highlighted the key role solar will play in meeting the Government’s 2030 clean power mission.
Miliband addressed the first meeting since the Government’s Solar Taskforce was activated to bring renewed focus on accelerating the delivery of projects.
The meeting focused on issues such as ensuring that a skilled and properly resourced workforce is in place to scale up solar installations across the UK.
Since being elected the Government has given the green light to 2GW of “nationally significant” solar, more than the last 14 years combined.
Miliband said: “The taskforce has shared ambitions to go further and faster, and as solar is one of the cheapest sources of power to build and operate, it is just common sense to make sure it powers even more UK homes and businesses.” Read more
The new National Energy System Operator (NESO), with oversight of both electricity and gas, is now in operation.
The organisation aims to ensure that Great Britain’s energy infrastructure is secure, resilient, flexible, and future-proof as the country decarbonises to reach net-zero.
NESO will bring together critical roles and responsibilities under one roof and will stand independent from both Government and industry in delivery of its future work.
Paul Golby, Chair of the NESO, said its establishment is “critical not just to the delivery of clean power by 2030 but to the delivery of net-zero by 2050”.
“As we take on the new roles and responsibilities of NESO it is critical that we do so with humility. We won’t know all the answers by ourselves but by working together with Government, the regulator, industry and wider society we can deliver on our primary duties to run a safe, secure and affordable energy system capable of supporting net-zero.”
The UK Government said a £21.7bn funding boost for carbon capture and storage signals a “new era for the clean energy industry”.
It said the UK will be among the first to deploy the technology at scale at sites in Teesside and Merseyside.
The carbon capture and hydrogen projects will create 4,000 new jobs and help remove over 8.5 million tonnes of carbon emissions each year.
Prime Minister Keir Starmer said the announcement will give industry the certainty it needs with a commitment to 25 years of funding.
However, Greenpeace UK argued the money would be better invested in renewables and said there was a risk the UK was locking itself into “second-rate solutions”.
Positive news on EU gas storage levels are among the factors which have led to forecasts of a dip in the January domestic price cap.
Cornwall Insight said strong global LNG supply outlooks and improved confidence regarding gas and electricity imports ahead of winter have also caused wholesale market prices to shift downward.
It is now predicting a 1% fall in January to an annual £1,697 for a typical dual fuel consumer. Prices are also forecast to decline slightly in both Q2 and Q3 of 2025.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said that while its latest forecast is welcome news, he cautioned it remains subject to volatile wholesale gas and electricity markets.
"There remain a further six weeks or so for the wholesale market to influence our forecasts, and while the negligible quarter-on-quarter drop is welcome, it must be remembered that bills will still remain hundreds of pounds above historic levels,” he said.
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