Weekly Industry Update – 23.04.18

Category : News


Contents:

Week in Energy

Policy updates:

Industry updates:

Week in Energy

Monday 16/04 – The Crown Estate reports that offshore wind energy accounted for 6.2% of UK electricity generated in 2017 and is on course to meet 10% by 2020. The UK joins the International Solar Alliance.

Tuesday 17/04 – Energy and Clean Growth Minister Claire Perry indicates that the UK could implement a target to reduce emissions to “net zero” by 2050. BEIS opens two consultations on proposals to address the current interoperability challenges of SMETS1 meters. The European Parliament gives final approval on the revised Energy Performance of Buildings directive to make buildings “smarter” and more energy efficient.

Wednesday 18/04 – The GB transmission system sees the first 48-hour period where coal met 0% of demand. Cardiff Council discusses plans for energy produced by a waste incinerator to heat public and commercial buildings in the city.

Thursday 19/04/08 – Clean Growth Minister Claire Perry states that the government is exploring options to remain in the EU Internal Energy Market post-Brexit. A report by former Defence Secretary and Energy Minister Sir Michael Fallon recommends the government establish a new 60% UK content target for British offshore wind projects.

Friday 20/04 – Scottish and Southern Electricity Networks enters into a partnership with Open Utility, to learn from and participate in its smart grid platform. Engineering consultancy Arup releases a study examining business model roadmaps for the energy sector to 2035.

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Policy 1 | BEIS-commissioned research considers future of heat decarbonisation

BEIS has published a series of reports commissioned as part of its wider research into the challenges and opportunities of heat decarbonisation.

The studies, released on Thursday, 12 April consider potential market developments and new technologies to better understand how the UK can effectively meet the 2050 target set out in the Climate Change Act.

Frontier Economics analysed and assessed a series of market and regulatory models and scenarios to better understand how they could support a low-carbon gas network in 2050. The report forecasts “significant” – and currently uncertain – consequences for the future role of the gas sector in a decarbonised heat system.

To anticipate potential risks or barriers to a low carbon gas system Frontier Economics tests market and regulatory models against three gas network scenarios.

A high hydrogen scenario sees all gas supply and most transport converted to hydrogen, with building heat systems using hydrogen boilers. This would require significant development work to the transmission network, increase national gas demand and see a reliance on around 40% of hydrogen. It would, however, provide “little variation” to current consumer experience.

In a methane peaking scenario hydrogen is not available and methane would back up electric heating in buildings and meet peak heat demand via hybrid pumps. Uncertainty around sustainable sources of feedstock would exist, and consumer protection methods would need to be introduced.

Finally, the report examines a regional gas grid scenario whereby the existing national grid separates into multiple separate pipelines. This would, it says, introduce uncertainties around technology and infrastructure, and could cause fluctuations in costs to consumers due to regional differences.

A report on the performance and costs of hybrid heat pumps (HHP), the potential impact of their innovation and their role in the UK’s decarbonisation was compiled by elementenergy. It identifies where HHPs could offer improvements over gas boilers in terms of their emissions, their cost-effectiveness and impact on the wider energy system.

Finally, E4Tech assessed the impact that innovation may have on developing technologies and feedstocks for biomass heating. Areas it looked at include the gasification of biomass or waste to produce methane and hydrogen; innovative pre-treatment technologies that may improve thermochemical and anaerobic digestion; and the use of woody or grassy energy crops.

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Policy 2 | European Parliament approves “near zero” emissions buildings target

On Tuesday, 17 April the European Parliament gave final approval on the revised Energy Performance of Buildings directive. These new rules have been brought in to make buildings “smarter and more energy efficient”, save energy users money and create jobs in the renovation and construction sectors.

One of the main achievements of the new rules is the creation of a pathway towards a low and zero-emission EU building stock by 2050, supported by national roadmaps from Member States to decarbonise their buildings. They also aim to encourage the use of smart technologies to ensure that buildings are able to operate efficiently. This includes the introduction of automation and control systems.

The directive also: supports the rollout of the infrastructure for e-mobility in all buildings; introduces a “smart readiness indicator” to measure the capacity of buildings to use new technologies and electronic systems to “adapt to the needs of the consumer, optimise [their] operation and interact with the grid”; integrates and “substantially strengthens” long-term building renovation plans; and supports public and private financing and investment.

The European Commission said that the changes “tap into the huge potential for efficiency gains in the building sector”. It added that the measures that have been approved will help to accelerate the rate of building renovation works and the overall transition towards more energy efficient systems.

The approval of the directive marks the ending of the first eight legislative proposals that were part of the Clean Energy for All Europeans package, which was brought forward by the European Commission on 30 November 2016.

The European Commission explained that the building sector in the EU is the largest single energy consumer in Europe, accounting for 40% of final energy consumption. It added that 75% of buildings are energy inefficient. This, it explained, offers “vast potential” for improving energy efficiency in Europe. The Commission also noted that construction activities that include renovation work and energy retrofits add almost twice as much value as the construction of new buildings, and that SMEs contribute over 70% of the value added in the EU building sector.

Commissioner for Climate Action and Energy, Miguel Arias Cañete, said: “This is the first final agreement on a proposal of the Clean Energy for All Europeans Package, a signal that we are on the right track and we will deliver on our pledge made at the beginning of the mandate. Our ambitious commitment to clean energy in Europe and the Paris Agreement will be made a reality by laws like the one voted today: the revised buildings directive will help create local jobs, save consumers money and improve Europeans’ quality of life. […] I now call on the European Parliament and the Council to show leadership and complete the rest of the proposals of the Clean Energy for All Europeans Package.”

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Policy 3 | UK government to consider “net zero” emissions goal

The government’s Energy and Clean Growth Minister, Claire Perry, has indicated that the UK could set a new target to reduce greenhouse gas emissions to “net zero” by 2050.

A global scientific review by the Intergovernmental Panel on Climate Change (IPCC) is due in autumn on the impacts of, and action needed in achieving a global average temperature rise of no more than 1.5C above 1990 levels.

Speaking at a Commonwealth Heads of Government Meeting on Tuesday, 17 April, Perry said that following the IPCC review, the Committee on Climate Change will be asked to review the UK’s current target. The Climate Change Act 2008 currently commits the UK to an 80% reduction in emissions by 2050.

If the new target was set, it is expected to increase the rate of decarbonisation required across key parts of the economy such as energy and transport.

At the meeting Perry said: “After the IPCC report later this year, we will be seeking advice from the UK’s independent advisers, the Committee on Climate Change, on the implications of the Paris Agreement for the UK’s long-term emissions reduction targets.”

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Policy 4 | ENTSOG finds robust European gas supply position this summer

ENTSOG has published its Summer Outlook 2018, which found the European gas network in most parts of Europe to be sufficiently robust to reach at least 90% stock levels in storage assets in most parts of Europe before winter.

The report, which gives an overview of the European network and potential gas supply, is focused on the ability of the network to give sufficient flexibility to shippers during the storage injection season. It also investigates the possible evolution of supplies.

ENTSOG also noted that network conditions will enable flexibility in the supply strategies of network users and will permit the necessary maintenance for ensuring long-term infrastructure reliability.

However, the report emphasises that to achieve the same storage inventory level as the 2017 season +52TWh more injection would be needed in the storage as a result of 17% lower year on year storage levels at 1 April. ENTSOG attributed this to cold weather in Europe, which saw storage levels reach “historical minimums”.

In the report ENTSOG used a sensitivity analysis to ascertain different injection targets. The preferred target level of 90% represents 989TWh of gas in European storages by the end of Summer. However, the report also noted that the analysis demonstrated that a 100% stock level could be achieved in almost all countries.

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Industry 1 | Crown Estate highlights UK progress on offshore wind

A report by the Crown Estate has found that the offshore wind industry is on track to account for 10% of the UK’s electricity supply by 2020.

The Offshore Wind Operational report, published on Monday, 16 April, summarised the progress that was made in the UK offshore wind industry during 2017. It found that as of the end of 2017 there were 33 fully operational offshore wind farms, with a further eight under construction. A total of 2GW of capacity was added, of which 1.8GW was operational by the end of the year, making it the “busiest year yet in offshore wind”. It was noted that the UK currently has the largest operational offshore wind capacity in Europe, accounting for 43% of the total.

The Crown Estate found that there has been a large amount of research and innovation in the UK and abroad. It noted that the Offshore Wind Innovation Hub – a partnership between the Offshore Renewable Energy Catapult and KTN – has been working with stakeholders to develop a series of Innovation Roadmaps for the UK offshore wind sector. These roadmaps aim to identify areas for innovation which can be used to help reduce the levelised cost of energy of offshore wind and areas where the UK is well placed to succeed in terms of capability and skills.

It was suggested that in the future, as capacity auctions encourage greater price competition and pressures on subsidies continue, groups that provide project finance will need to be aware of what other contractual certainties are in place.

Ownership of offshore windfarms was found to have remained dominated by utility style owners, which accounted for 62% of the market. The Crown Estate explained that traditionally these firms had their roots in the hydrocarbon market but have restructured in recent years. It added that this repurposing, combined with the departure of some utilities from the sector, “is indicative of a wider trend as corporates begin transitioning to lower carbon economies and change focus to greener goals.”

It was also noted that the growing ownership of financial investors has signalled a maturing of the market. Between 2011 and 2017 the number of these groups investing in offshore wind grew by 350%.

Huub den Rooijen, Director of Energy, Minerals and Infrastructure at the Crown Estate, said: “This latest report showcases an increasingly mature sector, delivering large-scale, low-carbon power, with record low bid prices for future projects, making the most of the UK’s world-class seabed resources and creating jobs opportunities across the country.”

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Industry 2 | UK’s first physical energy blockchain trade made

Verv, a provider of artificial intelligence (AI) technologies, has executed the UK’s first energy trade via blockchain.

In an announcement on Thursday, 12 April Verv explained that the trade occurred at the Banister House Estate in Hackney using its renewable energy trading platform. This first trade saw 1kWh of energy being sent from an array of solar panels with an excess to a resident in another block on the estate.

It occurred as part of a trial, currently being run with Repowering London, which aims to enable residents to benefit from local renewable energy sources and reduce their energy bills. The trial has seen solar panels installed on 13 blocks of flats, AI-based Verv smart hubs provided to participating residents and Powervault batteries installed in communal areas. Verv’s platform then calculates the energy demand of residents and allocates the available power accordingly. Verv hopes in the long-term to work towards the development of a “fully empowered, almost self-sustaining community.”

Agamemnon Otero, co-CEO of Repowering London, said: “The Shangri-La of Community Energy is to enable smart, easy, access to energy for its members. We are proud not only to be working on this but that we can place this leading technology trial into the urban homes and hearts of those most in need of it.”

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Industry 3 | North East set to host UK’s first Fastned 175kW EV chargers

It has been announced that two new electric vehicle (EV) rapid charging stations are to be constructed in the North East of England.

Both will be installed in city centre locations in Newcastle and Sunderland and will be designed, built and run by Fastned UK. Both are located near major routes and will help meet the charging demands for EVs in the region. The Newcastle site is part of Newcastle University’s Newcastle Helix site and will form part of a research project on EVs. The Sunderland site will be on West Wear Street near one of the city’s busiest central routes. Both sites will be able to charge up to six vehicles at a time.

A press release by Newcastle University, released on Friday, 13 April, noted that there are around 130,000 EVs in the UK and that 10% of those are located in the North East. It added that the funding for the £4mn project has come from the European Regional Development Fund, the Engineering and Physical Sciences Research Council, the UK Collaboratorium for Research on Infrastructure and Cities programme and the Office for Low Emission Vehicles.

Phil Blythe, Professor of Transport and leader of the research project at Newcastle University, said: “This is a unique facility, providing a number of rapid charges for the region’s electric vehicles users and which is also monitoring and analysing the demand for electricity that will help us understand the impact on the electricity grid of increasing numbers of electric vehicles in the North East.”

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