Posted on: 22/10/2024
This week's energy news headlines: 2025 is forecasted to be a breakthrough year for the UK’s energy transition; Business energy customers face higher bills according to a new forecast; Industry leaders urge closer energy trading links between the UK and Europe. Our industry round-up includes the latest updates from Government departments and energy regulators.
The Department for Energy Security and Net Zero has published the outcome of its consultation into a new Climate Change Agreements scheme.
Scottish Renewables has published its response to Ofgem’s consultation on the Regional Energy Strategic Plan policy framework.
The Department for Energy Security and Net Zero has opened a consultation into proposed changes to the Capacity Market. It closes on 10 December
Ofgem has published its decision to reject BSC Code Modification P471 to allow more flexibility in procurement of BSC Agents.
Ofgem has opened a consultation on the future of the ban on Acquisition-only Tarrifs after March 2025.
A significant improvement in funding opportunities means 2025 is set to be a ‘breakthrough’ year for the UK’s energy transition.
An industry survey found renewed confidence among energy professionals against a backdrop of factors which also included a supportive political climate and the game-changing possibilities of artificial intelligence.
The report by law firm Womble Bond Dickinson said while financial conditions in the sector have historically been challenging, UK energy players and investors are now seeing a “marked change in fortunes”.
Richard Cockburn, head of Womble Bond Dickinson's UK Energy Sector, said: "Appetite for financing projects is now much more positive.
“Looking ahead, our outlook shows how UK energy producers and investors plan to broaden their energy mix with solar, green hydrogen and heat networks topping the list for the coming years.”
Electricity bills for small industrial consumers are set to rise to around £200,000 more than pre-crisis levels in 2026, according to new research.
Cornwall Insight said that businesses such as small manufacturers and large retail and leisure units are predicted to be paying £550,000 annually (£238 per MWh) for electricity by the contract year April 2026/March 2027 – a 57% increase compared to pre-energy crisis levels.
Although small industrial business energy costs have fallen from the highs seen in 2022-2023, Cornwall Insight said the residual effects of the energy crisis and Russia’s invasion of Ukraine continue to influence the wholesale market.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: “While the electricity bills of businesses have remained above historic averages for many years, political conversations under both the current and previous government have been dominated by household energy bills, with businesses largely left out of the discussion—it’s the energy elephant in the room.”
Industry leaders have urged governments across Europe and the UK to work to deliver more efficient electricity trading.
In an open letter, a coalition of 19 leading European energy associations and transmission system operators said closer ties between the European Internal Energy Market (IEM) and the GB market would unlock investment in offshore generation and grid infrastructure.
RenewableUK Chief Executive Dan McGrail said the call was part of an ambition to transform the North Seas area into a European green power hub.
“More efficient electricity trade between the UK and EU is a key part of this, and the letter sets out how we can secure investor confidence and fully develop offshore wind projects in the region,” he said.
“We are collectively calling for issues around linking the EU and UK Emissions Trading Schemes to be tackled as a matter of urgency, as extending European price coupling to the GB market is the only viable market mechanism to realise the potential of the North Seas.”
A scheme to incentivise businesses to invest in energy efficiency and decarbonisation measures is to be extended by a further six years.
Following a consultation, the Government said the Climate Change Agreements will continue to offer eligible businesses reduced Climate Change Levy rates in return for meeting targets.
Over 2,600 businesses across over 50 sectors currently take part in the scheme with savings expected to be worth around £310m per year. The next target period under the scheme will begin on 1 January 2026.
Industry Minister Sarah Jones said: “The extension of the Climate Change Agreement scheme is a critical step in supporting our energy-intensive industries as we transition to a low-carbon economy.
“This is not only an investment in cleaner technologies but also in the long-term resilience and success of our industries.”
The UK and Scottish Governments have signed a new agreement to boost GB Energy’s ambitions to support clean energy supply chains and infrastructure.
The agreement aims to leverage Scotland’s strong pipeline of renewable energy opportunities and deliver maximum impact and value for money from projects.
Energy Secretary Ed Miliband said: “Scottish energy workers will power the United Kingdom’s clean energy future - including in carbon capture and storage, in hydrogen, in wind, and with oil and gas for decades to come as part of a fair transition in the North Sea.
“Unlike in the past we’re also working closely with the Scottish Government with a new agreement to ensure our publicly owned company GB Energy is primed to accelerate clean energy investment in Scotland.”
The UK Government has also confirmed that oil and gas workers will be supported to move more easily into careers in the renewable sector, including offshore wind, through a skills passport scheme.
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