Posted on: 05/11/2024
This week's energy news headlines: Industry leaders give a cautious welcome to measures announced in the budget; the planned closure of nuclear power sites is forecast to lead to price rises; Proposals to speed up the planning process for large green energy projects in Scotland are unveiled. Our industry round-up includes the latest updates from Government departments and energy regulators.
The Department for Energy Security and Net Zero has launched a consultation on reform of electricity infrastructure consenting in Scotland. It closes on 29 November.
Energy UK has published a report looking at innovations in business decarbonisation.
Ofgem has published the latest quarterly reports for the Non-Domestic Renewable Heat Incentive and the Green Gas Support Scheme,
The Department for Energy Security and Net Zero has published the latest decisions on energy infrastructure development applications..
Scottish Renewables has published its response to Ofgem’s view on developing a temporary cap and floor on wider TNUoS charges for generation.
Industry leaders have welcomed measures in the budget to boost the energy transition but believe more could have been done by the Chancellor.
Announcements included £134m of funding from the new National Wealth Fund to re-develop ports as bases for floating offshore wind and the go-ahead for eleven new green hydrogen projects.
Dhara Vyas, Energy UK’s CEO-designate, said it was encouraging to hear the Chancellor underlining the role the industry can play in an economic revival. “The industry looks forward to continuing to work with the Government to help deliver on its ambitions for clean, homegrown and secure energy.”
RenewableUK’s Chief Executive Dan McGrail said greater urgency was now needed to ensure the UK secures investment in areas such as offshore wind amid “fierce international competition”.
Trevor Hutchings, Chief Executive of the REA, said the announcements, which also included the Carbon Border Adjustment Mechanism and the Warm Homes Plan, represented “positive leaps forward” but there were missed opportunities to drive more ambitious outcomes through measures such as increasing the carbon floor price which could accelerate the transition to net zero.
Plans to close two nuclear power stations are forecast to lead to an increase in wholesale electricity prices later this decade.
Research by Cornwall Insight said the scheduled shutdown of two of the UK's Advanced Gas Reactor (AGR) stations is expected to trigger a rise in prices in 2027, with prices remaining elevated through the end of the decade.
Although more renewable energy sources are set to come online, the report said the closure of nuclear stations and slower-than-anticipated progress on some renewable targets are likely to keep electricity prices elevated.
Tom Edwards, Principal Modeller at Cornwall Insight, said: "As the UK prepares for the closure of its AGR stations, the challenges of managing capacity during the energy transition are becoming more evident. Balancing energy prices amid rising demand and the loss of nuclear generation capacity will require thoughtful coordination of policy, investment, and innovation.”
Proposals to improve the planning process to unlock more renewable projects in Scotland have been unveiled.
In collaboration with the Scottish Government, the UK government has launched a consultation on proposed changes that will make the system for considering large energy projects in Scotland more efficient.
Currently it can take up to 4 years to approve large electricity infrastructure projects in Scotland, such as power lines and onshore wind farms, under UK legislation that has been in place since 1989.
Energy Minister Michael Shanks said modernising “outdated bureaucratic processes” would help to accelerate new clean, homegrown energy.
Last month, Scottish and UK governments also signed an agreement to support clean energy supply chains and infrastructure, via new partnerships between Great British Energy and Scottish public bodies.
Revenues for battery storage units are set to rebound by 2026 following underperformance over the past couple of years, according to a new report.
Latest data from Cornwall Insight said factors including rising wholesale prices, more price volatility and increasing renewable build out over the next few years will lead to the rise.
It is forecasting annual revenues for 2-hour assets are forecast to climb from approximately £96/kW in 2025 to £108/kW by 2026, representing a marked improvement.
“Looking further ahead, we forecast a slight slowdown in yearly revenues in the latter half of the decade. This is in line with our underlying projections for wholesale power prices, alongside a greater saturation of the battery storage market,” said the report
“However, these levels will be significantly higher than what is currently being achieved in the market.”
The global market for clean energy technologies such as wind turbines and batteries is set to more than triple to over $2 trillion by 2035.
The International Energy Agency said the forecast rise comes as countries look to bolster their energy security, maintain their economic edge and reduce emissions.
Most of this spending is concentrated in the countries and regions that already have established a clear foothold in the sector and are looking to build on their positions.
“The market for clean technologies is set to multiply in value in the coming decade, increasingly catching up with the markets for fossil fuels,” said IEA Executive Director Fatih Birol.
“As countries seek to define their role in the new energy economy, three vital policy areas – energy, industry and trade – are becoming more and more interlinked.”
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