The Informer

This week’s headlines: Ofgem looks to help the energy industry deal with Covid-19 challenges by setting out priorities for suppliers and network companies; the Government reassures on plans for the next CfD round; green energy overtakes fossil fuel generation for the first time; and wind turbine prices could rise due to supply bottlenecks.

  • Ofgem aims to free up energy industry

    Ofgem has set out priority activities for suppliers and networks to help them focus on meeting vital customer needs during the pandemic.

    In a move which it said would provide clarity to leave the industry “free to focus” on helping customers, the regulator has sent letters aimed at helping provide flexibility for companies to make the right decisions.

    Chief Executive, Jonathan Brearley said he recognised that energy firms will be facing significant operational challenges in responding to coronavirus as well as staff shortages.

    As well as highlighting priority work such as essential connections and planned projects necessary for security of supply and network resilience, it said it wanted to enable firms to de-prioritise lower priority work “without undue fear of regulatory enforcement or penalties.”

    The Energy Networks Association has also launched a media campaign to raise awareness that if electricity or gas workers are seen during the lockdown it’s because they are carrying out essential work.

    Ross Easton, Director of External Affairs at the Energy Networks Association said: “With the introduction of social distancing rules, energy network companies have changed their procedures to protect employees and their customers. This allows colleagues on the ground and in control rooms and contact centres to continue vital work safely, including taking emergency calls and carrying out safety-critical maintenance work.”

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  • Government to press ahead with next CFD round

    Plans for the next Contracts for Difference (CfD) round to support major renewables projects in the UK are progressing despite the Covid-19 disruption, the Government has said.

    In an update on the CfD 4 round which is due to be held next year, the Department for Business, Energy and Industrial Strategy (BEIS) said it continues to work towards the "important objective of delivering CfD4 in 2021."

    BEIS said the auction round would support the government’s decarbonisation objectives and further promote confidence in the renewables industry after the current COVID-19 emergency has passed.

    A consultation is currently being held ahead of CfD4 with webinars being staged if necessary instead of physical stakeholder events.

    “We will keep the consultation deadline under review and will reassess the situation towards the end of the period as is currently envisaged,” BEIS added.

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  • Renewables outstrip fossil fuels for first time

    Close to half of GB’s electricity generation came from renewables in the first quarter of the year, making it the country’s main power source for the first time.

    Data from analysis firm EnAppSys found 44.6% of power came from renewables and 29.1% from gas-fired plants. The remainder came from nuclear (15.3%), imports (7.3%) and coal plants (3.7%).

    Output from windfarms exceeded 10GW for 63% of the quarter and more than 5GW for 85% of the quarter. Nuclear generated its smallest volume since 2008, producing 12.2TWh in the quarter as older reactors suffered increasing levels of downtime as they move towards the end of their operational life.

    EnAppSys’ director Paul Verrill said: "Whilst the 'stay at home' measures reduced demand in the last weeks of March, which increased the contribution of renewables, wind farms generated significantly more power than gas-fired plants, which historically have been the dominant fuel type for electricity generation in Great Britain for some years now."

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  • UK wind turbine prices could rise

    Wind turbine costs for UK developers are set to rise due to bottlenecks in the manufacturing supply chain, according to an industry analyst.

    Somik Das, Senior Power Analyst at GlobalData, said that despite the manufacturing sector being exempt from the lockdown in many European countries, stringent quarantine measures are likely to create a shortage of supplies.

    He estimates that during the first quarter of 2020, the UK’s average turbine price is estimated to have risen to $854/kW, from $816/kW, and is expected to peak further in Q2 to reach $891.6/kW as suppliers are impacted by capital crunch, a shortage of personnel and transit issues.”

    Das said nearly 15GW of wind projects, primarily offshore, are currently in the pipeline and awaiting construction and that the ongoing disruption caused by Covid-19 outbreak could prove to be a source of concern for potential investors.

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  • 2020 on course for biggest-ever fall in emissions

    This year is on course to see the biggest ever drop in CO2 emissions due to the impact of lockdowns on energy demand and travel.

    Analysis from Carbon Brief said the fall would be even larger than that seen during the Second World War.

    It estimates emissions cuts this year in the region of 1,600m tonnes of CO2, equivalent to more than 4% of the global total in 2019.

    However, the research also stressed that the likely reduction in CO2 this year would still be far off the goals of the Paris Agreement. It also stressed that atmospheric carbon levels are expected to increase again this year, even if emissions cuts are greater still.

    Carbon Brief said rising CO2 concentrations – and related global warming – will only stabilise once annual emissions reach net-zero.

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