Posted on: 15/10/2024
This week's energy news headlines: The new system operator is confident on winter power supplies; More than £24bn of private sector investment in UK clean energy is announced; A support scheme to encourage more long-duration storage is unveiled. Our industry round-up includes the latest updates from Government departments and energy regulators.
Ofgem has announced its funding decision for the Strategic Innovation Fund Round 3 Alpha funding.
EnergyUK has published an explainer on Market-wide Half Hourly Settlement.
Ofgem has published a letter setting out its proposed costs for administering the Renewables Obligation for 2024/2025.
The joint Government-Industry Floating Offshore Wind Taskforce has published its 2050 Vision report.
The Department for Energy Security and Net Zero has published a report looking at emissions measurement and reporting approaches for the public sector.
New interconnectors and growth in battery storage have helped to increase forecast margins on the electricity system this winter.
The new system operator said the base case de-rated margin is forecast to be 5.2GW, up from the 4.4GW last winter.
The NESO said an increase in generation connected to the distribution networks was also a contributory factor in offsetting generation retirements such as the recent closure of Ratcliffe-on-Soar, the UK’s last coal fired power station.
The system operator cautioned that there may still be some “tight days” where it needed tools including the use of system notices.
Craig Dyke, director of system operations at NESO, said: “While our margin assessment has improved from previous winters, we are continuing to monitor risks and uncertainties and, if necessary, will take steps to build resilience.”
On Monday a capacity market notice (CMN) was triggered by NESO’s automated system but was later cancelled.
More than £24 billion of private investment for clean energy projects across the UK has been announced.
The funding, unveiled ahead of a major UK investment summit, includes Iberdrola doubling its investment in the UK and Orsted and GreenVolt unlocking more than £10bn of spending on offshore wind farms.
SeAh Wind UK also announced a £225m expansion of its investment in the North East to build a state-of-the-art wind technology manufacturing facility in Teesside.
Prime Minister Keir Starmer described the investments as a “huge vote of confidence” in the new government’s growth mission.
A new support scheme to boost investment in long duration electricity storage (LDES) has been announced.
The Government said the ‘cap and floor’ mechanism could see the first significant LDES facilities in nearly four decades, helping to create back up renewable power and bolster the UK’s energy security.
LDES projects, including pumped storage hydro, work like giant batteries by storing renewable energy and releasing it onto the grid when needed.
The Government said the investment support scheme will boost investor confidence and unlock billions in funding for vital projects.
Energy Minister, Michael Shanks, said: “We’re reversing a legacy that has seen no new long duration storage built for 40 years - and taking steps to unleash private investment in both established and new technologies.”
Projects aimed at tackling energy network challenges to achieve net zero have been awarded £9.7m of funding by Ofgem.
The latest projects to be supported by the Strategic Innovation Fund (SIF) include one which looks at improving the process of network planning to manage rising heat pump demand.
Another supported project will create a risk management tool to assess the quantum computing threat to the energy network.
Marzia Zafar, Deputy Director of Digitalisation and Innovation at Ofgem, said: “We’re at a critical moment when it comes to our energy system, but by supporting fresh ideas and bold thinking,
“I’m confident we can reach net zero in the most equitable way possible, offering benefits for people all over the country.”
Trade bodies have urged the Government to re-think proposals to introduce zonal pricing as part of major reforms to electricity markets.
Organisations including UK Steel sent an open letter to Energy Secretary Ed Miliband and Business Secretary Jonathan Reynolds arguing that having different prices zones across the UK would undermine investment in low carbon energy and hit competitiveness.
The zonal pricing proposal is part of the Review of Electricity Market Arrangements (REMA) which aims to address the ageing transmission system which is not designed to support the flexibility needed by the growth of intermittent generation.
RenewableUK’s Executive Director of Policy Ana Musat said: “We cannot afford to move to zonal pricing as it would endanger the Government’s own mission to deliver clean power by 2030. It would create unacceptable risks for a range of sectors, including manufacturing and steel production, which are essential for the health of UK’s economy and productivity.”
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