COVID-19: Keep up to date with the latest information via our Frequently Asked Questions. If you are experiencing a power cut or loss of supply, click here.

Weekly Industry Update – 30.04.18

Category : News


Week in Energy

Policy updates:

Industry updates:

Week in Energy

Monday 23/04 – a coalition of 21 major energy companies and top investors call on Britain and the EU to maintain close links on energy and climate policy after the UK leaves the bloc.

Tuesday 24/04 – A study by ITM Power examines the potential deployment of large-scale power-to-gas energy storage found four suitable locations in northern England. Britain goes 76 hours without burning coal, breaking a national record set just five days beforehand. The Environment Agency confirms it has dropped plans that could have prevented unabated generators under the MCPD avoiding Triads.

Wednesday 25/04 – The Judicial Review of Ofgem’s decision to cut triad avoidance payments by approving CMP264 and CMP265 begins. The Commons Scottish Affairs Committee launches a new inquiry into the challenges facing the North Sea oil and gas industry. Carbon Tracker research shows the EU’s carbon prices could double by 2021 and quadruple by 2030 if the European Commission legislates to align the bloc’s emissions targets with the Paris Agreement.

Thursday 26/04/08 – BEIS statistics show a 28% year on year decline in the use of coal by major power producers in Q1 2018. A study by Imperial College London finds linking heat, transport and electricity into one fully integrated energy system could be a cost-effective way to decarbonise. Ofgem grants Diamond Transmission Partners BBE Limited a licence for the £193mn Burbo Bank Extension offshore windfarm grid link.

Friday 27/04 – The World Bank predicts oil prices will average $65/ barrel this year.

Back to top

Policy 1 | Local Authorities take leading role in deploying solar

The Solar Trade Association (STA) has detailed how local councils are assuming a leadership role on solar deployment through measures including developing “subsidy-free” solar farms, master planning “smart” neighbourhoods and using solar to save money and provide stable sources of revenue to fund services.

Analysis by the STA of BEIS data shows that the top 10 local authorities by investment have collectively invested £80mn in solar. Independent expert modelling commissioned by the STA confirms local authorities can deliver solar schools using zero interest Salix Finance for payback within 8-9 years, without the need for central government support using a Power Purchase Agreement model and business rate relief. Similarly, the unique advantages of local government mean they can develop solar farms in good sites for payback in 12 years, or less using private wires.

Notable case studies from the report included:

  • A subsidy-free 7.4MW solar farm with 4MW battery storage being brought forward by West Sussex Country Council, with other councils such as Hounslow set to follow.
  • Innovative tendering schemes to combat cost pressures on rooftop solar, including Portsmouth City Council which has installed nearly 5MW of solar over 300 buildings.
  • Zero interest Salix Finance funding a solar school with help from Calderdale Council and payback in eight years. An ambitious programme for 50 solar schools continues in West Sussex.
  • For eight years Sheffield Council has required all “significant developments” (five or more dwellings, or more than 500m2 floor space) to meet a minimum of 10% of the predicted energy needs of both new and converted buildings from renewable or low carbon energy.

To increase the uptake of such projects, the STA identified a series of policy recommendations. These include councils making full use of planning powers to stipulate higher energy performance in new developments at all scales, being ambitious as high volumes and larger rooftop schemes mean lower unit cost and providing relief from business rates for solar and storage for state schools, health centres and Community Benefit Societies, Community Interest Companies and Co-ops that have invested, or want to invest in, onsite solar power and storage for self-consumption.

STA Chief Executive Chris Hewett said: “Leadership on solar in the UK today comes from local councils, and increasingly from regional government. Local people want a stake in clean energy, so they understand the tremendous value of solar and energy storage – both hugely accessible technologies. We’ve been impressed by the level of innovation and political leadership being demonstrated today by some councils. Our message to councils’ is don’t wait on national government; there is a lot you can do today with solar and the UK solar industry wants to work with you to help meet your climate, air quality and economic goals.”

Back to top

Policy 2 | Arup outlines roadmaps to diversified and decentralised UK energy future

Engineering consultancy Arup has completed a study examining business model roadmaps for the energy sector to 2035. The report describes the next few decades as among the “most transformative the energy sector has ever seen”. It predicts that, by 2035 the UK’s energy system will operate a more decentralised and decarbonised model that will see a more diverse range of heating sources and the electrification of transport.

The report was written from the perspective of it already being 2035, summarising the energy transition that has occurred, and the decisions taken from 2018 that have made that transition possible. It notes that, to achieve the change envisioned will require strong leadership from government, a stable policy framework and regulators to have a “whole systems approach”.

The energy system of 2035, says Arup, will be “disaggregated and multi-vector”. Flexibility will be key in areas including system architecture and operation, as well as new regulatory frameworks, to achieve the government’s three objectives of decarbonisation, security and affordability. A “plural energy system” will exist that ensures diversity and market competition; uses the best and most appropriate technology for specific applications; and doesn’t abandon the inherent value of existing infrastructure.

According to the report, 2035 will see the UK as a “nation of energy producers”. This will be the result of a decentralised electricity system in which small-scale generation at the distribution level and behind the meter provides nearly half of generation capacity.

In such a system, industrial sites and large non-domestic sites will develop and use microgrids and batteries will be widespread in both residential and commercial properties. The nature of this distributed generation will see local networks play an increasingly important role.

The electricity sector, Arup predicts, will be low-carbon – offshore wind will have grown significantly, hitting the 10GW mark in the early 2020s, and new nuclear plants will be operational. Intermittency in renewables will not be as big an issue as expected, according to the report, having been overcome by new types of storage at the point of generation, on the grid and in homes and businesses.

By 2035, says the report, the heat sector will be in transformation. Ongoing efforts to decarbonise heat will result in a fragmented sector that includes heat networks in cities, electrification in rural areas and hydrogen instead of gas in suburban areas. Elsewhere, Arup predicts the electrification of the transport sector, natural gas playing a small but vital role in powering heavy industry, and hydrogen production becoming a major industry. Homes too, will be increasingly smart, with new properties being almost exclusively energy-neutral.

If the transition is achieved as predicted, Arup forecasts new technology and digital developments, a future-proofed jobs market and a forward-looking industry. It will also be “internationally recognised that the UK has set the bar high for energy development and is an advanced nation delivering against the United Nation’s Sustainable Development Goals.”

Back to top

Policy 3 | Major energy firms call for UK-EU climate cooperation

A coalition of 21 major energy firms and businesses have called on the UK and the EU27 to continue to work closely post-Brexit to meet the commitments of the Paris Agreement in any future relationship.

The letter, addressed to Brexit Secretary David Davis and the EU’s Chief Brexit Negotiator Michel Barnier, is signed by companies including SSE and Aviva. It was coordinated by the Prince of Wales’ Corporate Leaders Group.

It stated that climate change poses “one of the greatest long-term threats to our economies and societies” and, therefore strongly urges both the UK and EU to continue to work together. To achieve this, the letter calls for a comprehensive Climate and Energy Chapter that could cover “trade and non-trade” issues.

The letter highlighted how integrated energy markets and climate change policies across Europe have “enhanced energy and climate security” and resulted in lower energy bills in both the UK and EU. It therefore says that Brexit negotiations should ensure such benefits continue in the future.

If this is achieved, says the letter, it will foster innovation and economic growth and ensure that the UK and EU “remain leaders in the global battle against climate change”.

Back to top

Policy 4 | Cost of Energy Review debated in Parliament

The Dieter Helm Cost of Energy Review was discussed in Parliament on Tuesday, 24 April. The review, published November 2017, examined how industry, government and regulators can lower costs while meeting climate targets. Accordingly, the debate centred around the cost of energy to consumers.

Opening, Graham Stringer (Labour) pointed to the review’s “extraordinary headline” that £100bn more than necessary will be paid by 2030 for current energy policies. He noted too that consumers are “paying 20% more” for energy than is otherwise necessary.

Energy and Clean Growth Minister Claire Perry said the challenge of how to make policy that “keeps the lights on and costs down” involves important questions for debate. The focus on low carbon, she said is a “win-win” situation, adding that reducing costs for consumers and business must be at the heart of future strategy. Perry pointed to progress in lowering the cost of low carbon energy, noting network costs have fallen 17% since privatisation, and the large roll-out of smart meters. The move to SMETS2, she added must be “done as seamlessly as possible for consumers”.

Government must “set ambition” said the Minister, adding that key questions to answer are the importance of energy to economic success, disruptors, how to move from passive to active demand, and the need to access lower cost and effective storage technologies.

Back to top

Industry 1 | Feasibility study identifies potential power-to-gas energy storage locations

A study by the energy storage firm ITM Power has identified four potential locations for the deployment of large-scale power-to-gas storage

The feasibility study, first announced in November and funded by BEIS, aimed to examine the potential deployment of large-scale power-to-gas energy storage. It focused on potential sites able to support deployments that could operate cost-effectively with a storage capacity of 50MW or greater. The study was restricted to areas within the boundaries of the NGN gas distribution network.

The findings of the study, published on Tuesday, 24 April, revealed that four locations met the required criteria and would be suitable for the deployment of a large-scale first-of-a-kind power-to-gas demonstration project. Of the four sites that were identified, Low Thornley was recommended as the most suitable for the construction of a 50-100MW facility.

ITM explained that Low Thornley, which is the site of the Integrated Transport Electricity and Gas Research Laboratory (InTEGReL) facility in Gateshead, would be able to support large-scale gas-to-power throughout the year, despite variations in demand between summer and winter.

The company added that hydrogen injected at Low Thornley could provide stored energy in the form of low-carbon gas to over 243,000 customers. It was also noted that the area’s close proximity to the A1 and the urban centres of Newcastle and Gateshead would offer the ability to export hydrogen locally to develop a local hydrogen refuelling network.

The study recommended that a Front End Engineering Design (FEED) study for a 50-100MW power-to-gas demonstration project at Low Thornley now be undertaken. This would provide the chance to fully scope the programme and establish the cost of building, installing, commissioning and demonstrating the facility.

It also recommended that a UK-wide gas network industry strategy be developed for the wider demonstration and deployment of gas-to-power as a short-term approach to decarbonising the heat industry. It would also support the wider deployment of renewable generation by providing a route to “proven technology which can bridge power and energy networks.”

Graham Cooley, CEO of ITM Power, said: “results are very exciting for the deployment of large scale Power-to-Gas energy storage”.

Back to top

Industry 2 | Britain’s coal-free record extended to three days

On Tuesday 24 April it was revealed that Great Britain had gone 76 hours without burning coal, the longest consecutive period since the industrial revolution.

Data from National Grid showed that coal was not used to meet any of GB’s electricity demand from 9.05am on 21 April until 1,10pm on 24 April. The previous record of 54 hours and 50 minutes was set last week on 19 April. In the absence of coal almost a third of Britain’s electricity was supplied by gas, with wind and nuclear meeting around a quarter each.

The Guardian reported that in recent weeks overall power demand has been lower than expected due to warmer weather, meaning it was easier for gas and low-carbon sources to meet the majority of the UK’s demand.

Jonathan Marshall, an Analyst at the Energy and Climate Intelligence Unit, praised the news, saying: “Ever rising renewable capacity in the UK will see these records fall more and more frequently, clearly showing progress made over the past decade or two.”

However, Andrew Crossland, from the MyGridGB website, warned that the transition from coal to gas could be a “false dawn”. He said: “Shifting to gas is likely to make our electricity market more volatile as our energy price becomes increasingly locked to international gas markets. That will only hurt consumers.”

Back to top

Industry 3 | National Grid seeks to enable aggregated Statement of Works process for embedded generation

National Grid has raised CMP298 Updated the Statement of Works Process to Facilitate Aggregated Assessment of Relevant and Collectively Relevant Embedded Generation, which will initially be considered by the CUSC Panel on 27 April.

National Grid prepares Statements of Works (SoW) where a generator connecting to a distribution network may require expenditure on the transmission network of more than £10,000. As a number of generators considered together may have an impact on the transmission system, although may not when viewed in isolation, National Grid has proposed to enable an aggregated SoW process.

The network operator believes that this will enable more effective and efficient system management and enable embedded generators to have more timely information on which to base investment decisions.

When justifying its position, National Grid said that embedded generators have for some time been expressing dissatisfaction with the timeliness of information on the transmission impact of their connection applications. This has resulted in them not getting the right information in a timely manner to make an investment decision.

Back to top

Tags :

Leave a Reply

  • This field is for validation purposes and should be left unchanged.