The Informer

This week’s headlines: The renewables industry criticises Ofgem’s confirmation of plans to overhaul the charging regime; a survey finds businesses struggling to achieve their sustainability ambitions; and the UK has moved up a place in the world’s most attractive locations for green energy.

  • Ofgem presses ahead with charging reforms

    Renewable energy groups have criticised Ofgem for pressing ahead with its Targeted Charging Review (TCR), arguing they will stifle the business case for subsidy-free renewables, energy storage and flexibility services.

    The energy regulator will effectively remove Transmission Generation Residual payments for larger generators and reduce Embedded Benefit payments for some smaller generators.

    After examining residual charges for maintaining pylons and cables, it will also replace the current regime with fixed charges on households and businesses.

    Ofgem said the decision is part of a series of reforms that will ensure the costs of the network are kept as low as possible and shared more fairly across its users.

    The Renewable Energy Association’s call for the TCR to be run in tandem with the 2023 Forward Looking Charges Review was dismissed, prompting Chief Executive Nina Skorupska to warn: “We now face a period of investor uncertainty and a significantly weakened business case for battery storage and the other crucial systems we need to ensure Britain has a modern power grid.”

    Trade body RenewableUK called for Ofgem’s remit to be altered, with Head of Policy & Regulation Rebecca William adding: “Reforming Ofgem so that it takes account of the need to reach net zero rapidly and cheaply would unlock further investment to build the flexible, smart, clean energy system of the future – vital infrastructure which the UK needs to function in the decades ahead.”

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  • Businesses struggle with sustainability ambitions

    A lack of funding and resources is holding businesses back from fulfilling their environmental and social ambitions, according to a survey of more than 9,000 companies.

    The poll of firms in 35 markets by banking giant HSBC found that 96% wanted to be more ambitious with their actions in the future.

    HSBC noted: “For many businesses, becoming more sustainable is not only beneficial for the environment and for society, but for their bottom line too.”

    Financial challenges were identified as the biggest barrier for 35% of businesses, while 31% blamed freeing up resources to implement important projects.

    A quarter of respondents said they were confused by the sheer number of environmental measurement criteria available to them.

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  • UK moves up renewable attractiveness league table

    The UK has climbed from eighth to seventh position in accountancy firm EY’s Renewable Energy Country Attractiveness Index following the latest subsidy-free Contracts for Difference auction round.

    Seventh place in the league table is the UK’s highest ranking for two years and sees it reclaim a position it last occupied in 2017 before Brexit uncertainty sent its attractiveness tumbling.

    The UK is ranked as the second most-attractive country for offshore and marine energy investment out of 40 nations, as well as fourth for biomass and fifth for onshore wind, but only 36th for solar photovoltaics.

    China retained the top position in the index despite a 39% year-on-year drop in investments, with EY highlighting the “sheer size of investments taking place”.

    The United States held onto second place thanks to growth in its offshore wind pipeline and tax credits for solar farms.

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  • UK off track on carbon emissions

    Accountancy firm PwC has warned that the UK needs to go beyond simply phasing out coal from its power stations if it’s to achieve its net-zero target.

    The company’s latest annual Low Carbon Economy Index found the UK will need to reduce its carbon intensity by 9.7% each year.

    Despite leading the G20, it has only achieved a decarbonisation rate of 3.7% since 2000.

    Between 2012 and 2016, during which the majority of coal was being phased out of the power sector, the decarbonisation rate averaged 6.9% each year, only hitting the required 9.7% during 2014.

    Kiran Sura, Assistant Director in the Sustainability & Climate Change Team at PwC UK, said: “A more coherent and more ambitious policy response is required across all sectors of the economy.”

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  • Global wind speeds on rise

    Research has found that global wind speeds have risen since 2010, reversing a previous trend observed since the 1970s.

    Adrian Chappell, a Reader in Climate Change Impacts at Cardiff University’s School of Earth & Ocean Sciences, said: “This rapid increase in global wind speeds is certainly good news for the power industry.”

    Scientists had suggested previously that the slowdown in world wind speeds had been caused by urbanisation and vegetation changes, which caused an increase in the “roughness” of the planet’s surface and slowed down wind speeds.

    But the latest research now suggests that the change in wind speeds is caused by changes in large-scale ocean and atmospheric circulation patterns, with changes taking around a decade to occur.

    Wind speeds may decline further in the future, the researchers said, and so highlights the need for the wind power industry to anticipate such changes.

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