The Informer

This week’s headlines: The dramatic growth seen in renewable generation in recent years will help ensure the nation’s energy needs continue to be met during the Covid-19 pandemic; wholesale energy prices are forecast to fall further; and more investment in low-carbon infrastructure is urged to help global economies recover.

  • Renewables help boost UK’s Covid-19 energy resilience

    The huge increase seen in renewable generation has made the UK’s power system more resilient to deal with the challenges posed by the Covid-19 pandemic, according to a leading academic.

    Professor Phil Hart, Director of Energy and Power at Cranfield University, said the risk to power supplies as the UK tackles the outbreak was “very minimal” even if some generation sites had to be withdrawn from service if the crisis goes on for a long time and workforce sickness impacts on maintenance schedules.

    “The advent and scale of renewables in our supply system is helpful here as the size of renewable plants is generally much smaller, and the national power system will be better able to handle withdrawal of multiple smaller sites,” he said.

    Meanwhile, industry leaders are engaging with the Government on the impact of the Covid-19 disruption on green energy projects and the supply chain.

    RenewableUK’s Deputy Chief Executive Melanie Onn stressed renewables and the wider energy sector are “critical infrastructure” for the UK. “Our industry will continue to work with Government to support the national effort to respond to the challenges.”

    Onn said the organisation was working through the impacts on projects, the supply chain and the industry’s workforce and helping firms access the support announced by the Chancellor.

    Audrey Gallacher, Chief Executive of Energy UK said the industry has well-practiced contingency plans in order to ensure the delivery of services in “extraordinary circumstances.”

    National Grid ESO’s director Fintan Slye said the network operator has analysed anticipated effects on supplies of mass self-isolation of the UK’s workforce and expects overall demand to reduce due to falling energy use from industrial consumers.

    Ofgem Chief Executive Jonathan Brearley said the regulator would be “pragmatic” about compliance during the pandemic and added: “Where companies can demonstrate that any compliance issues have resulted from prioritising efforts to protect customers and security of supply, we will take full account of this in any decisions we take.”

    It has also postponed RIIO-2 hearings until further notice.

    Meanwhile, ministers have agreed a deal with suppliers to keep the lights on for vulnerable customers during the pandemic. Measures will include not disconnecting customers who can’t afford to pay their bills, especially those on pre-payment meters.

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  • Wholesale energy prices ‘likely to fall further’ as oil price drops

    The price of gas and electricity in UK wholesale markets could fall further following the coronavirus-induced fall in global oil prices, according to analysts.

    Travel bans and social restrictions have dragged oil prices down to 17-year lows, amplifying the falls that followed this month’s meeting of Oil Producing & Exporting Countries (OPEC) and Russia.

    Joe Camish, an analyst at Cornwall Insight, said energy prices will depend on demand for gas and electricity while workers are based at home. He added: “Although the links between oil prices and Great Britain’s energy market have dwindled, this dramatic drop in prices is likely to spark further declines in wholesale gas and electricity markets."

    “We could, therefore, expect to see this act as a price depressive fundamental in the near-term, whilst also offering possible support for previously out of merit technologies in Great Britain, such as less efficient combined-cycle gas turbines (CCGTs) and possibility coal-fired power stations.”

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  • Low-carbon investment urged to help economies recover

    The World Resources Institute (WRI) has called on governments to use low-carbon investment as a means to stimulate the global economy post-Covid19, rather than continuing to pump money into fossil fuels.

    Helen Mountford, Vice President of Climate & Economics at the US-based organisation, warned that emissions reductions caused by economic downturns tend to be temporary and can lead to emissions growth as economies attempt to get back on track.

    The institute highlighted figures from New Climate Economy that said at least $26 trillion in net global economic benefits could be derived from low-carbon investment between now and 2030, compared with business-as-usual.

    More than 65 million low-carbon jobs could be created by 2030, equivalent to the combined workforces of the UK and Egypt today.

    Mountford said: “Business leaders and the finance sector are already waking up to the risks of investing in high-carbon activities and the benefits of shifting to a low-carbon, resilient economy – and governments should follow their lead.”

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  • Gnergy latest supplier to go under

    Ofgem has appointed energy supplier Bulb to take on 9,000 domestic and business customers following the collapse of Gnergy.

    The company ceased trading after struggling to pay £674,000 to the Renewables Obligation buy-out fund.

    The energy regulator had issued Gnergy with a final order to pay in October.

    Philippa Pickford, Ofgem’s Director for Future Retail Markets, said: “Gnergy customers do not need to worry, as under our safety net we’ll make sure your energy supplies are secure and domestic customers’ credit balances are protected.”

    Gnergy is the first supplier to go under in 2020 after a string of failures in the past two years.

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  • Scottish Government looks at potential role for hydrogen in energy system

    Scottish ministers are to investigate how hydrogen could be used in the nation’s energy networks.

    Scotland has set a net-zero target of 2045, five years before the UK as a whole and it is thought hydrogen could play a significant role in achieving that.

    The European Marine Energy Centre on Orkney is already carrying out experiments to generate hydrogen using energy from wave and tidal devices.

    Consultancy firms Arup and E4tech have been chosen by the Scottish Government to look at wider hydrogen use.

    Clare Lavelle, Head of Energy Consultancy at Arup, said: “Scotland’s natural resources, existing industrial skills and ambitious carbon reduction targets will be key to unlocking the true benefits that the hydrogen economy can bring.”

    Arup has previously worked on energy projects with governments in Australia, New Zealand and the UK.

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