Monday 09/04 – National Grid data shows the first three months of 2018 saw Scotland’s onshore wind turbines provide 5,353GWh of power to the National Grid, an increase of 44% on the same period last year. Global renewable energy generation capacity has increased for the seventh consecutive year, according to statistics from the International Renewable Energy Agency.
Tuesday 10/04 – National Grid and the Danish transmission network operator Energinet delay the final investment decision on the proposed 1.4GW Viking Link interconnector. National Grid’s Summer Outlook finds that lower overall electricity demand, combined with increased renewable generation, is expected to result in less need for gas-fired electricity generation.
Wednesday 11/04 – BEIS confirms £320mn of funding for heat networks will be opened for bids in the Autumn. BP commits to two new North Sea developments, Alligin and Vorlich, which are expected to produce 30,000 barrels of oil equivalent per day at peak production. The CBI argues that aligning with EU energy and climate change rules after Brexit will help to achieve secure, affordable and low-carbon energy for UK consumers.
Thursday 12/04/08 – BEIS releases a series of research reports on heat decarbonisation, including Frontier Economics analysis on future market models and regulatory frameworks. The skeleton Target Operating Model options for market-wide half-hourly settlement are approved by Ofgem. DfT statistics show 53,203 ULEVs were registered in the UK in 2017, up 27% year on year, making up 1.7% of all new vehicle registrations.
Friday 13/04 – The DfT confirms new biofuel targets coming into force that will double the use of renewable fuels in the UK transport sector within 15 years. London-based machine learning startup Verv completes the UK’s first physical trade of energy on the blockchain.
The government has announced the launch of a new fund to help develop heat networks, in line with the priorities set out in its Clean Growth Strategy.
In an announcement on Wednesday, 11 April, BEIS explained that the £320mn Heat Networks Investment Project (HNIP) will offer grants and loans to both the public and private sectors in England and Wales for the development of networks that serve two or more buildings. The scheme will open for applications in Autumn 2018. Applicants can apply for support with the construction of new heat networks, the development of existing heat networks, commercialisation phase and construction costs and projects to access recoverable heat. The project is expected to run until 2021.
The government noted that heat networks could play a “vital role” in the long-term decarbonisation of heat, as they create the opportunity to make use of larger-scale renewable and recoverable heat sources. It estimated that heat networks could meet up to 24% of heat demand in industrial and public-sector buildings by 2050.
The long-term objective of the HNIP is to help establish a self-sustaining market for heat networks that does not require direct government subsidies. It aims to do this in three ways: increasing the volume of strategic, optimised and low-carbon heat networks that are built by providing central government funding, which will attract additional investment; improving the quality of heat networks that meet local infrastructure and consumer needs; and building capability of project sponsors and the supply chain to develop systems “of the right type and quality.”
Alongside the announcement of the projects launch, BEIS also published the findings of an initial pilot scheme it ran between October 2016 and May 2017. The pilot received 25 full applications requesting a total of £78.mn of funding. BEIS awarded nine of these a total of £24.2mn of funding (£15.7mn in grants and £8.5mn in loans). This funding supported a total capital expenditure of £75.1mn.
During the pilot a number of stakeholders emphasised that there was a shortage in knowledge and skills relating to heat networks within a number of groups, including local authorities, technical and financial consultants and construction firms. This, BEIS suggested, may contribute to keeping costs high, raise concerns over quality and impact on delivery of heat network projects. Stakeholders also revealed concerns over the lack of regulation for heat networks and uncertainty over the sector’s future direction.
Energy and Clean Growth Minister Claire Perry commented: “The UK has led in the decarbonisation of electricity, and [this] announcement shows we are just as committed to tackling heat. [This] announcement creates a route to market for innovative energy projects across the country and demonstrates a key objective of the Clean Growth Strategy; to help deliver technologies that can lower bills, cut carbon and improve the quality of life for communities across the country.”
The Confederation of British Industry (CBI) has called for the UK to align with EU energy and climate change rules following Brexit. In its Smooth Operations report, published on Wednesday, 11 April, the CBI argued that this would help to achieve “secure, affordable and low-carbon energy” for UK customers.
The report noted that the “critical nature” of the energy system means that it is “vital” that a “pragmatic approach” is taken in Brexit negotiations in this area. It therefore set out a number of recommendations for factors negotiators should consider when establishing the future energy relationship between the UK and the EU.
The first was that the continuation of barrier-free access and appropriate regulatory convergence with the UK will be important to ensuring that both the UK and the EU are able to continue to trade energy effectively. The CBI explained that appropriate convergence with the current EU rules on the Internal Energy Market (IEM) will be “essential” to ensuring that the UK and EU are able to trade energy in a “harmonised way”. It therefore recommended that negotiations on the UK’s involvement in the IEM should include some form of agreement of a “practical and cost-effective” method of accessing and facilitating interconnectors based on a “level playing field between UK and EU generation”.
The CBI also noted that the UK’s continued influence in key EU agencies and bodies would allow both parties to manage regulatory alignment and ensure that the European energy sector “continues to flourish”. It added that it will be important for the UK to ensure it remains involved with the development of the European-wide system, rules and regulations. A key part of this will be ensuring that the UK continues to hold influence with key EU regulators and system operators.
The report called for the UK to maintain the benefits of being a member of Euratom to support its nuclear energy industry. It suggested that this could either be through continued membership or through new arrangements. The CBI warned that a failure to preserve the existing Euratom arrangements “would result in significant damage to the UK civil nuclear industry”. It added that the current arrangements “are vital for the operation of the existing nuclear fleet”, which currently provides approximately 20% of the UK’s electricity generation.
Finally, the CBI called for the UK to remain in the EU Emissions Trading System until at least the end of the current phase in 2020. Thereafter, the report recommended that the UK either continue to participate in the scheme, provided it is able to maintain influence over any future reforms, or that it establish its own approach that is aligned with the EU system. The CBI added that it was important that any future relationship ensures continued decarbonisation and competitiveness in the UK.
The report concluded: “In a rapidly changing world, a close relationship between the UK and the EU on energy and climate change objectives is in the interest of both sides.”
The UK Offshore Wind Industry Council (OWIC) has announced the launch of a full review of the UK supply chain as part of its previously announced vision for 2030.
In an announcement, published on Friday, 13 April, the council explained that the review will be led by former McLaren Group CEO Martin Whitmarsh. He will be working with companies in the supply chain to try and encourage existing suppliers to increase their capabilities in the offshore wind sector and introduce “significant business opportunities to new enterprises.”
Whitmarsh will be supported by a team of industry experts: Claire Canning from the Offshore Renewable Energy Catapult, Kasper Sørensen from MHI Vestas Offshore Wind, Thomas Ellson from innogy and Victoria Sinclair from ScottishPower Renewables.
The review will lead to the production of a Supply Chain Development Plan for the offshore wind industry, which will include deliverable opportunities and suggestions on how the UK could increase productivity and value at each stage of the offshore wind supply chain. The plan will also set out how the industry could deliver £2.6bn in annual exports by 2030, up from £0.5bn today, and support up to 27,000 high quality jobs.
Commenting on the review Whitmarsh said: “I’m looking forward to working alongside the industry experts and engaging with suppliers at all levels of the value chain, and I’m confident that we’ll be able to produce a clear plan, with tangible recommendations to achieve the ambitious targets the OWIC has set for the industry.”
On Thursday, 12 April Ofgem approved the high-level Target Operating Model (TOM) options for market-wide half-hourly settlement.
Ofgem consider that it’s in all consumers’ interests to be settled against their half-hourly consumption data. The TOMs set out the high-level design ideas for the revised end-to-end settlement arrangements that have been developed by the Elexon-led Design Working Group (DWG). The group developed five different proposals for the process, which detail different groupings of the retrieval, processing, aggregation and volume allocation services. These range from a model that keeps all of the processes separate, to a model that bundles all four into one central service.
Following the approval by Ofgem, Elexon now intends to carry out a consultation on the high-level TOMs, beginning in late April, and the DWG will proceed to the second stage of the TOM design project. In this second stage the TOMs will be developed in greater detail, with the overall aim of identifying a preferred TOM with transitional arrangements in time to inform Ofgem’s decision on whether or not to proceed with market-wide half-hourly settlement in H2 2019.
In its latest Summer Outlook report National Grid has predicted that the total available supply of gas in the UK between April and September will exceed demand. As a result, GB sourced gas is expected to be routed to areas where the price is more attractive.
The Summer Outlook is an annual report by National Grid, which sets out its view of the gas and electricity systems for the coming summer. It is designed to inform industry stakeholders and support National Grid’s preparations for its operation of the energy system.
Gas from the UK and Norwegian Continental Shelf is expected to make up the dominant share of gas supplies coming into the UK over the coming summer. The report noted that gas supplies from the more flexible sources, particularly interconnector imports and Liquified Natural Gas (LNG) are expected to remain low.
National Grid explained that the increased use of renewable electricity generation has not only impacted the operability of the electricity system, but also impacts demand on the gas system. Lower overall electricity demand, combined with increased renewable generation, has resulted in less need for gas-fired electricity generation. As a result, it is expected that overall gas demand during the summer will be 35.7bcm, slightly lower than summer 2017.
The report also noted that the coming summer is expected to see one of the highest volume of maintenance on the gas transmission system to date. It added that “summer can be a challenging time” to manage supply and demand variability whilst also providing access to the network, despite GB demand being lower.
Both the peak and minimum demand on the electricity transmission system in the summer are expected to be lower than in 2017. The minimum transmission system demand is expected to be 17GW, which equates to 21.1GW of underlying demand. This is marginally (0.6GW) lower than the previous year’s minimum. Peak transmission system demand is expected to be 33.7GW between June and August. National Grid also expects there to be sufficient generation and interconnector imports to meet demand throughout the summer.
The report explained that the increase in distribution-connected generation (wind and solar) has contributed to the overall downward trend in demand. Solar PV has continued to impact the daily demand profile because it suppresses daytime demands on the transmission system, making forecasting difficult. The capacity of distributed connected solar PV and wind has increased to 12.9GW and 5.7GW respectively.
The system operator noted that the increased variability in supply and demand caused by periods of low demand and high levels of renewable generation “can create operability challenges.” Therefore, National Grid expects to have to take greater action to curtail generation and possibly instruct inflexible generators to reduce their output to balance the system.
A paper published by Regen on Tuesday, 10 April, considered the place of electric vehicles (EVs) in the UK transport system and strategies to manage the impacts on the UK’s energy network.
The paper highlighted the imbalance between the significantly high up-front costs and lower running costs as the key challenge slowing consumer uptake of EVs. Regen suggested that as the initial costs of EVs reduce, range and charging anxiety are likely to become the future key barriers. To overcome these barriers the report recognised the need to provide a better offer to both business and household consumers.
Considering grid impacts, the report noted a more diverse portfolio of charging options, in particular, the use of workplace and destination charging to help to spread demand load both geographically and over time. Work-place charging, is expected to become an important charge point locations for both commuters and overnight fleet charging for employer owned vehicles.
Regen’s modelling found the implementation of these measures could reduce peak EV demand by approximately 30% from 6.6GW to 4.2GW in summer and 7.7GW to 4.9GW in winter.
In a statement on Friday, 6 April, the Solar Trade Association (STA) announced easier grid access for solar installations up to 200kW on business and housing developments in Scotland.
The announcement came as a result of new analysis conducted by the network operator which found that data provided by STA Scotland members across a range of solar installations concluded that the effect of most solar installations on the local grid was much less than previously thought.
Previously a Statement of Works from developers had been required from developers seeking to install small solar projects of over 11kW. This caused developers to commission a costly and time-consuming analysis of how projects may affect transmission loads at national level, adding around £10,000 to project costs. This decision to relax solar restrictions is set to have a significant impact on the attractiveness of going solar for commercial rooftops.
STA Scotland Chair Chris Clark said; “This is a breakthrough for solar in much of Scotland and it goes a long way towards removing one of several barriers to Scotland realising its solar potential”. Clark added “As a result of SPEN taking a sensible approach to rooftop schemes, businesses and housing developers in Scotland will find it easier & cheaper to go solar.”
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