Monday 23/07 – Ofgem states its intention to launch a Significant Code Review on access and forward-looking charging arrangements to support electric vehicles, storage and other new technologies. The government confirms that the next Contracts for Difference auction round will take place in Spring 2019, with another following in 2021 and every two years after that.
Tuesday 24/07 – MHCLG publishes a revised National Planning Policy Framework, mandating that local authorities should support community-led initiatives for renewable and low-carbon projects.
Wednesday 25/07 – A poll for the Energy and Climate Intelligence Unit finds many MPs are unaware of both the popularity and low cost of onshore wind generation in Britain.
Thursday 26/07 – BEIS DUKES figures reveal that low-carbon generation’s share of the generation mix in 2017 reached a new high of 50.1%. WindEurope figures show the UK leads Europe in offshore wind deployment in H1 2018, but was 16th in onshore wind installations.
Friday 27/07 – Research from Imperial College London finds that through trading between countries with different weather patterns, wind and solar power could provide more than a third of Europe’s energy by 2030.
The government released this year’s Digest of United Kingdom Energy Statistics (DUKES) on Thursday, 26 July, providing a comprehensive overview of energy trends in the previous year, showing an ongoing rapid shift in the sources of energy.
In common with recent years, the headline finding was the continued growth of renewable energy. The share of renewables generation increased to 29.3% from 24.5% in 2016. This increase resulted from a 12.8% increase in renewables’ generation capacity in 2017, reaching 18.3GW (derated to reflect intermittency), accounting for 22% of generating capacity.
This meant that low-carbon electricity’s share of generation increased from 45.6% to a record 50.1%. This increase was driven by the increase in renewables generation, as nuclear generation decreased by 1.9% compared to 2016.
In contrast, coal’s share of generation fell to 6.7% in 2017 from 9.0% in 2016. This continued the decline observed in 2016, with generation from coal falling from 31TWh in 2016 to 23TWh in 2017.
In contrast to previous years, the fall in coal was not directly replaced by gas generation. In 2017, gas generation decreased to 136.7TWh (-4.6 % compared to 2016); this compares to the large increase in gas generation in 2016.
Final consumption decreased by 1.0% to 301TWh in 2017, largely as a result of decreases in the domestic and commercial sectors due to warmer weather.
Power imports fell by 9.2% whilst exports increased 49.9%, resulting in the 16.8% reduction to net imports. This trend was a result of repairs to the UK-France interconnector in Q1 1 of 2017, required after damage by a ship’s anchor in November 2016. Moreover, in Q4 2017 French nuclear outages resulted in increased French electricity prices and increased UK exports.
Trade association Energy UK’s Chief Executive Lawrence Slade said: “These figures underline just how rapidly the energy sector is transforming with low-carbon sources providing the majority of electricity generation last year, bringing benefits for consumers, the economy and the environment. Such extraordinary progress in such a short space of time shows what can be done with a clear policy direction and the right framework to encourage investment and innovation.”
UK natural gas production in 2017 was relatively stable compared to 2016 at 465TWh, up just 0.3%. However, this small increase includes production of cushion gas from the Rough storage facility as it is prepared for closure, without which production would have actually dropped 1.5%.
Net gas imports were 4.5% lower in 2017 compared to 2016, driven by a 7.5% increase in exports. Volumes exported to Belgium were up by nearly a third, increasing the share of UK exports to Belgium to more than 70%. Imports fell by 1.8%.
In a speech delivered on Monday, 23 July, Energy and Clean Growth Minister Clare Perry confirmed that the next Contract for Difference (CfD) auction will open in May 2019, with a subsequent auction in 2021 and auctions thereafter to occur roughly every two years.
Perry stated the importance of setting these longer-term plans, saying “we understand that to make meaningful long-term investments, industry needs clarity over years, not months”. It was also reiterated that the government will provide up to £557mn of funding for these future CfD auction rounds in an effort to increase the UK’s renewable generation capacity.
The auctions will cover offshore wind and, for the first time, remote islands wind projects. Other Pot 2 “less established” technologies including biomass and combined heat and power. Perry said that, depending on auction prices, between 1-2GW of new offshore wind could be delivered “powering millions of homes a year and we will look at ways to manage the auctions to ensure smooth delivery of low-carbon generation”.
Regarding the long-term forecast of two-yearly auctions Perry noted that, in return the government expects “long-term commitments” from companies, adding that she looks forward to working with the sector to explore its “ambitious plans”.
During her speech Perry praised the progress of the UK’s offshore wind industry, calling it “a success story for the UK – and we’re the world leader with over 7GW installed and operational”. She said that the scale and breadth of ambition has driven innovation and, in turn, “the UK has helped to realise this extraordinary coming of age for the global sector, and we are poised to reap the reward in new export markets”. Perry noted that “total UK content” in the offshore wind sector has grown to 47% and she is committed to making sure that this number continues to grow.
The government’s CfD announcement was welcomed by energy companies and industry bodies alike. SSE’s Director of Generation Development Paul Cooley said: “The government’s guarantee that auctions will be held every two years from 2019 onwards provides much-needed clarity for the UK’s offshore wind industry.”
Baroness Brown of Cambridge, the Offshore Wind Sector Champion, said: “This is a very welcome and timely announcement, which will help deliver ‘clean growth’ through decarbonisation of our electricity system. The offshore wind industry is a UK success story, with huge global potential- both to reduce CO2 emissions and for exports from an innovative UK supply chain.”
Energy UK Chief Executive Lawrence Slade commented: “We welcome this announcement giving clarity on the future CfD auctions that the government has been calling for”. He said that CfDs have played a major role in driving down the cost of renewables, particularly offshore wind but added that “if we are to continue the transition to low-carbon energy at the least cost to consumers then we must ensure that the cheapest technologies such as onshore and solar are no longer excluded.”
Just 8% of MPs know that onshore wind farms are the cheapest method of adding electricity generating capacity in the UK, according to a poll by YouGov. The poll, commissioned by the Energy and Climate Intelligence Unit (ECIU) and published on Wednesday 25 July, found that MPs are unaware of both the low cost and popularity of onshore wind.
In contrast, it revealed that 12% share the belief that large-scale nuclear power stations such as Hinkley Point C are the cheapest form of new capacity. Elsewhere, the survey showed a more general trend of MPs “consistently” overestimating the public’s opposition to onshore wind developments.
For example, in the government’s most recent Energy and Climate Change Public Attitude Tracker, published in April 2018, it was revealed that only 2% of the population strongly opposes onshore wind. YouGov’s poll showed that just 9% of MPs believed that figure to be lower than 5% and more than half (52%) felt that the level of “strong opposition” would be higher than 20%. A separate survey carried out by YouGov on behalf of RenewableUK and published on 16 July showed that two-thirds of people in Britain think the government should change its policy of excluding new onshore wind developments in the energy mix – just 15% opposed such a change.
Director of the ECIU Richard Black said the results of the poll were “somewhat alarming”, adding that “with just 2% of Britons expressing strong opposition, the myth that onshore wind is unpopular or divisive should now be put to bed once and for all”.
Two House of Commons select committees have launched inquiries looking on future support and technologies to meet clean growth ambitions and support the deployment of renewable energy.
On Monday, 23 July the Science and Technology Committee launched an inquiry into the technologies needed for meeting clean growth emissions reduction targets. The committee noted that a wide range of technologies are being developed with the aim of contributing to emissions reductions. However, through its inquiry it is seeking written evidence on issues including: how the development and deployment of technology can be supported – and whether government should support specific technologies or be “technology neutral”; the relative priority that should be applied to new technologies; examples of specific technologies that have been supported thus far; and the role of the Industrial Strategy’s Clean Growth Grand Challenge. Written evidence is requested by Friday, 26 October.
On the same day the Welsh Affairs Committee launched an inquiry on renewable energy in Wales, specifically looking at measures the UK government can take to support the further deployment of renewable energy generators in Wales and how it can ensure that subsidies represent value for money. Submissions are invited by Wednesday, 5 September.
BEIS-commissioned research has found that the UK’s energy efficiency services market will have to grow at an annual rate of 20% if it is going to make a strong contribution to delivering the Fifth Carbon Budget targets for non-domestic buildings.
On Wednesday, 18 July, BEIS published the Non-Domestic Energy Efficiency Services Market report, which found the UK’s energy efficiency market was smaller than expected, estimated at £349mn in 2017. A number of distorting factors can be attributed to the state of its size, including the degree to which organisations have self-delivered savings rather than rely on energy efficiency services companies.
Although the UK sector is not as large as predicted, it has steadily grown over recent years, driven by public sector procurement frameworks. The report estimated that the sector’s median growth rate has been 15% per annum with future growth rate expected to drop to 10% per annum. BEIS highlighted the need to implement measures in other non-domestic sectors such as industry, in order to make the requirements of the fifth Carbon Budget and grow the UK’s energy efficiency market to an annual revenue of almost £5bn by 2032.
BEIS noted the lack of publicly available data involving the state of the UK energy efficiency markets and including the volume of projects implemented in the public sector, as a major restriction on UK growth.
The report suggested that without available successful case studies many potential clients for energy services may lack confidence in investing in a potentially risky contractual relationship. Meanwhile, cost reduction was shown as a strong driver for clients interested in energy efficiency. Followed by trust in energy services, regulatory inconsistency and financial returns.
A number of policy recommendations have been developed, based on international research and the suggestions of stakeholders in order to improve non-domestic energy efficiency in the UK. These included: the promotion of standard contract terms, methods and guidance to improve confidence in the energy efficiency services solution; the development of innovative methods for recovering the costs of energy efficiency investments that reduce transaction costs and perceived risks; the development of energy efficiency networks to raise awareness of efficiency measures, including energy services contracts; and the compulsory implementation of measures identified in Energy Savings Opportunity Scheme surveys.
Furthermore, the report suggested the government adopted Energy Efficiency Standards that must be met by suppliers in order for them to supply into the public sector, and to also adopt Energy Performance Contracts for its own premises. Finally, the government should make modifications to the minimum Energy Efficiency Standards for rented commercial properties to send stronger signals to prospective tenants.
A new offshore wind leasing round for UK waters could release around 6GW of new projects, according to the Crown Estate.
Announced at stakeholder sessions in London, the organisation responsible for managing the UK seabed said the move would support a competitive market and the industry’s ambition for 30GW of UK offshore wind capacity by 2030. The Crown Estate also proposed the leasing process would be open to both existing developments and new entrants, although developers must identify sites within a predefined region of seabed. In order to support potential developers and reduce consenting risk, The Crown Estate noted it would share new seabed data in advance of a leasing process, including highlighting various constraints on existing infrastructure, environmental designations and other marine activities.
The Crown Estate said it will be considering all the feedback from industry and statutory organisations on the evolving proposals, ahead of a decision being taken on opening a tender process for the award of new offshore wind rights. A second stage of industry and stakeholder engagement is expected to take place in autumn. This would allow a new round of rights to begin in early 2019, maintaining a pipeline of projects through to the late 2020s and beyond.
Senior Development Manager at The Crown Estate Jonny Boston said early stakeholder engagement was “a hugely important” in helping to build a better understanding of the appetite for additional capacity and inform how a tender process might run.
The Engineering and Physical Sciences Research Council (EPSRC) announced on Tuesday, 24 July that it will bring forward three £5mn energy research hubs and a new £1mn network for solar energy.
The three Supergen Energy hubs will be focused on offshore renewable energy, bioenergy, and energy networks, and will involve academics from 19 universities, and 70 stakeholder partners. While, the SuperSolar Network aims to act as a knowledge exchange mechanism, maintaining the co-ordinated network for the photovoltaics research community in the UK and creating greater opportunities for building collaborations. This project would involve support from 10 universities and six partners.
Over the last five years EPSRC has supported the development of seven hubs and invested a total of £150mn into The Supergen programme. Professor Philip Nelson, EPSRC’s Executive Chair, said: “As we move towards a low-carbon future we need to explore the fundamental science that can spark new technologies and systems as well as linking researchers to industry to meet their needs.”
Like this post? Stay informed by signing up to email updates