Weekly Industry Update – 03.09.18

Category : News


Contents:

Week in Energy

Policy updates:

Industry updates:

Week in Energy

Monday 27/08 – Mayors of 19 cities around the world, including London, vow to ensure all new buildings are carbon neutral by 2030. Data from National Grid highlights how the heatwave that affected Britain over the summer caused lower wind speeds and therefore higher power sector emissions.

Tuesday 28/08 – Energy UK cautions that uncertainty over Brexit could lead to higher energy bills. Facebook commits to sourcing 100% renewable power across its operations by 2020.

Wednesday 29/08 – The UK provides £56mn to a fund to develop energy storage technology in South Africa. Data from analysts EV-volumes shows that Europe-wide sales of electric vehicles in the first six months of 2018 were 42% higher than in 2017.

Thursday 30/08/08 – The Solar Trade Association publishes an open letter to Energy Minister Claire Perry calling on her to urgently confirm the continuation of an export tariff for small-scale renewables from next April. BEIS figures show 17,400 smart and advanced meters were installed in smaller non-domestic sites by large energy suppliers in Q2 2018.

Friday 31/08 – RenewableUK finds that 2017 was a record year for onshore wind deployment, but says that without fresh support, deployment rates are set to fall significantly.

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Policy 1 | BEIS statistics show non-domestic metering milestone

BEIS released its latest Energy Trends data on Thursday, 30 August. The figures revealed from April to June electricity supply from Major Power Producers (MPPs) in solar reached a record high after its share increased by 10% compared to the same period in 2017. In contrast, April to June saw coal’s share of supply from MPPs decrease 20% to hit a record low of 1.9% of total electricity supplied.

Generation from renewable sources was aided by more favourable weather conditions and increased available capacity. The total share of renewable generation increased to a record quarterly high of 30.1%, compared to 27% in Q1 2017. Wind and solar generation remained higher than nuclear in Q1 2018 and became the UK’s second largest source of electricity. This was due to increased wind and solar capacity and higher wind speeds in Q1 2018, combined with lower nuclear generation.

Furthermore, BEIS noted that nuclear’s share of generation fell to 18%, the lowest level since Q4 2014, predominantly due to outages. In total, low-carbon electricity accounted for 48% of generation – a record high for Q1 – although fell 6.3 percentage points on Q3 2017 due to seasonal differences in electricity consumption.

Overall generation was 1.0TWh lower in Q1 2018, at 92.8TWh, than in Q1 2017. BEIS noted generation from other generators increased by 2.3%, while electricity generation by MMPs was down 0.5%. Over the three-month overall period, primary energy consumption in the UK on a fuel input basis rose by 0.6%, and on a temperature adjusted basis by 0.5%.

BEIS also released its quarterly smart meter installation figures on Friday, 31 August, which revealed there are now over 12mn smart and advanced meters operating across homes and businesses in Great Britain, by both large and small energy suppliers – a 9% increase from the previous quarter. To date BEIS estimated a total of 1.04mn smart and advanced meters have been installed in smaller non-domestic sites by a combination of large and small energy suppliers. These meter installations count towards the energy suppliers’ roll-out obligations, with 826,800 (79%) of the meters installed by large energy suppliers.

In the second quarter of 2018, 17,400 smart and advanced meters were installed in smaller non-domestic sites by large energy suppliers (of which 12,100 were advanced meters and the rest smart meters). This shows a small increase in non-domestic installations compared to the previous quarter.

As at 30 June 2018, there were a total of 2.37mn meters operated by large energy suppliers in smaller non-domestic sites in Great Britain. Of these, 650,100 (69,000 gas and 581,100 electricity) were operating in smart mode, or with advanced functionality – representing over a quarter of all non-domestic meters in operation. Small energy suppliers reported operating a total of 423,600 smart and advanced meters working with smart or with advanced mode functionality in smaller non-domestic sites as at the end of 2017.

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Policy 2 | Report calls for government plans for changing power system SSEN proposes networks being able to take control of EV charging

SSEN recently published the results of its consultation on DNO-managed charging for electric vehicles in areas where low voltage networks are under stress. A slim majority of respondents support the proposed interim solution, whilst the majority of suppliers prefer a market-first approach centred on smart charging and flexibility.

Amid concerns that the geographically clustered rollout of electric vehicles (EVs) may cause capacity issues at the low voltage network level, Scottish and Southern Electricity Networks (SSEN) launched the Smart EV programme.

Through this, SSEN launched a consultation in March 2018 outlining potential solutions to address these challenges. The consultation focussed on a proposed measure facilitating distribution network operators (DNOs) to install a monitoring device at local electricity substations and in domestic homes (with customer consent), that would allow them to temporarily adjust EV charging when required. The proposed measure is suggested as an interim solution to mitigate EVs network impacts whilst market measures such as smart charging, vehicle-to-grid, or network reinforcement are developed.

Stewart Reid, Head of DSO and Innovation at SSEN, said: “As a responsible network operator, it is our job to ensure the transition to electric vehicles is as smooth as possible, developing cost-effective, smart technology interventions to manage this demand without unnecessary upgrades to GB networks and disruption”

On 23 August, the DNO published the results of the consultation, which featured responses from 42 parties including energy suppliers, charge point supply chain actors, and DNOs. The consultation consisted of 12 questions, covering support for the interim charge management solution and its customer benefits, alternative means to mitigate potential network constraints from EVs, and requirements for customer consent and compensation when implementing the solution.

Overall, the interim management of EV charging by DNOs as proposed received support from 53% of respondents (see Figure 1), with the same proportion stating that the proposal is in the best interests of the customer. Support for the scheme was concentrated amongst the DNOs (100% of respondents) and charge point supply chain actors (67% of respondents). The main drivers for DNO support were the view that such an intervention is critical to enable EV uptake, concerns over the availability and efficacy of smart charging and tariffs, and the solutions’ stated equitability.

In comparison, 80% of respondents from the energy supplier category opposed the solution. Particular concerns were raised around the potential for the system to impede developments in market driven solutions, especially the commercials of flexibility services and smart charging. The proposed two year lead time of the system led several respondents, particularly energy suppliers, to highlight the potential for market-based solutions to reach sufficient maturity ahead of the suggested interim solution.

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Policy 3 | Solar stakeholders urge government to continue FiT export tariff

A number of solar industry stakeholders have signed a joint letter calling on the government to confirm as soon as possible that a “fair payment” for surplus electricity exported to the grid from small-scale solar sites.

The letter, dated Thursday, 30 August, followed the government’s proposal to close the Feed-in tariff (FiT) scheme for all new solar installations. In it the shareholders argued that certainty is required “as a matter of urgency” to ensure investor confidence can be retained in the solar industry. The group highlighted recent warnings from the Environmental Audit Committee about the “alarming collapse” in clean energy investment since 2016. Removing the export tariff would, the letter said, risk making this issue worse.

The group went on to warn that if the export tariff were removed next April as proposed, households, small businesses and other operators of small-scale solar installations would potentially have to spill their power onto the grid for free, “effectively subsidising the commercial electricity sector.”

Instead they proposed that an interim incentive from next April for metered settlement from smart homes and small and medium businesses that are able to offer flexibility services. This “should ensure local capacity is developed for wider system evolution towards a smarter grid while industry works to resolve the barriers”.

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Policy 4 | City mayors pledge to make new buildings carbon neutral by 2030

On Thursday, 23 August the mayors of 19 cities around the world, including London, collectively committing to ensuring all new buildings are carbon neutral by 2030.

The Net Zero Carbon Buildings Declaration was established by C40 – a network of cities committed to addressing climate change. This also included a commitment to make all buildings, regardless of when they were constructed, carbon neutral by 2050; to develop a suite of supporting incentives and programmes; to report annually on progress against targets; and to evaluate the feasibility of reporting on emissions beyond operational carbon. It was noted that delivering the commitments “will require a united effort”.

In the announcement the group explained that buildings in urban areas are one of the largest sources of greenhouse gas emissions, typically accounting for over half of a total city’s emissions on average. In London this figure rises to 70%.

Mayor of London Sadiq Khan said: “My strategy to improve London’s environment includes some of the world’s most ambitious targets to reduce carbon emissions from our homes and workplaces. This includes expanding my existing standard of zero carbon new homes to apply to all new buildings in 2019. We want to make London a zero-carbon city by 2050 and we’re working hard to ensure its buildings are energy efficient and supplied with clean energy sources.”

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Industry 1 | Ofgem approves reform of balancing market to allow broader participation from end users

Ofgem approved BSC and Grid Code modifications that enable the implementation of the Trans European Replacement Reserves Project (TERRE).

The TERRE project is the implementation of the European platform for the exchange of balancing energy from Replacement Reserves (RR). The use of a new platform for RR is a legal requirement of EU Guidelines on Electricity Balancing.

All participating balancing service providers will be able to submit bids to their national transmission system operator (TSO) – National Grid in the case of GB – on an hourly basis to fulfil 15-minute delivery periods.

The TSO will forward these bids to a central platform – LIBRA – which will process them in order to meet the RR requirements specified by the TSOs. In GB, National Grid will then send the delivery instructions to the balancing services provider.

Payments to them will be subject to validation of expected delivery volumes against actual metered data, with any non-delivery subject to imbalance charges. The outcome of the process will also feed into imbalance price calculations.

The solution developed under the BSC also enables the participation of a wider range of providers. It creates a new category of Party to the BSC, the Virtual Lead Party (VLP), that does not have to hold a supply licence. VLPs will be able to register Secondary Balancing Mechanism Units (BMUs), also a new concept, for the purpose of providing balancing services through TERRE and to the Balancing Mechanism (BM). These Secondary BMUs can be aggregated independently of their supplier, meaning that distributed generation, aggregators and energy will be able to register BMUs and participate directly in the BM.

Ofgem has chosen to implement the original version of the BSC proposal, under which a customer has to consent to its supplier receiving the half-hourly delivered volumes that the customer has provided. The alternative solution would have mandated the customer sharing this data. Ofgem noted its previously stated views concerning the design of arrangements to accommodate independent aggregators, that “a careful balance may need to be struck between enabling information flows to support efficient contractual arrangements and the potential impact on competition in the market for flexibility”. It considers that the original solution better strikes that balance, enabling information flows to support efficient contractual arrangements, while allowing for the commercial confidentiality matters to be agreed between the concerned parties if and where deemed appropriate.

Ofgem considered that the BSC modification, P344, and the Grid Code modification, GC0097, should improve the efficiency, coordination and economic operation of the electricity system. It said TERRE should lead to greater competition for RR as the ESO will have access to balancing service providers outside GB, increasing the options available to it to balance the system. Providers in GB would also be able to provide services to TSOs other than National Grid. The TERRE platform go-live is scheduled for between October and December 2019.

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Industry 2 | Summer wind drought increases UK power carbon intensity

The heatwave that hit Britain over summer led to an increase in carbon emissions as a result of lack of wind, according to figures from National Grid.

Reported in The Guardian, on Monday, 27 August, the data found that the carbon intensity of the UK’s electricity supply had increased by an average of 8% over the past three months. It noted that despite wind capacity being 10% higher than it was a year ago, the share of electricity it supplied dropped from 12.9% last year to 10.4% during this summer. It added that although record-breaking levels of solar output helped fill the gap and nuclear plants provided a foundation of supply, gas-fired power stations were needed to fully meet the gap in demand.

National Grid also suggested that despite a rise in carbon emissions, this summer was the second greenest on record. The data found that carbon intensity of electricity generation was down 3% to 252g CO2 per kWh between January and August, compared with the same period last year.

Director of Operations at National Grid Duncan Burt said the data “demonstrates why it is important for us to have a diverse energy mix to ensure we can continue to manage supply and demand.”

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Industry 3 | Portsmouth to roll out integrated EV street lighting charging

Portsmouth City Council has claimed it will be the first city to introduce an integrated electric vehicle (EV) charging solution, whereby electricity is provided by street lamp columns and EVs are charged on a pay-as-you-go basis.

In a statement released on Monday, 20 August, the council announced it will install around 50 new charge points over the next few months as a result of becoming one of the first local authorities to receive funding from the Office for Low Emission Vehicles (OLEV). The scheme will be operated by charging company ubitricity and trialled for three years.

The Portsmouth City Council statement said: “Charging EVs has typically occurred off-street in car parks, garages or driveways. In built-up cities like Portsmouth, off-street parking is not an option for many residents. By installing charge points on-street, residents can enjoy the convenience of charging their plug-in EVs at home.”

Councillor Lynne Stagg, Portsmouth’s Cabinet Member for Traffic and Transportation, added: “We want to encourage greater use of electric vehicles, so are introducing the infrastructure to support this. We hope this will give residents the confidence to invest in electric vehicles when the time comes to replace their cars.”

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