The Informer

This week’s headlines: The impact of Covid-19 and increased solar generation could see peak electricity demand drop by as much as 20% this summer; businesses are in line for hundreds of millions of pounds of savings under plans to extend an energy reduction incentive scheme; and a generator is to pay £37.2m over energy market manipulation.

  • Peak summer power demand could fall by up to 20%

    Electricity demand this summer could fall by as much as 20% due to the impact of Covid-19 and increased solar generation, according to the system operator’s latest Outlook report.

    Before the pandemic, National Grid ESO had been forecasting peak demand could hit 32.1GW, marginally lower that the peak of 33.7GW seen in 2019.

    In a ‘high impact’ scenario, National Grid ESO now believes demand could fall by 20% to a peak of 25.7GW although its low impact scenario shows a fall of just 4%.

    If the summer demand for electricity remains low, it expects it will need to take more action to balance and operate the system. Additional sources of flexibility may be required alongside a reduction in the level of interconnector imports, a curtailment of flexible wind farm output and requests for pumped storage units to increase demand by moving water back to their top lakes.

    However, it stressed that it expects that demand will meet supply needs and operation of the electricity system will not be adversely affected.

    Fintan Slye, Director of ESO, Electricity System, said: “Whilst the evolving situation is very fluid, we are implementing a number of measures so that consumers in the UK will continue to receive secure and reliable electricity supplies during these uncertain times.”

    Read more

  • CCA extension to save firms up to £300m a year

    The Government said plans to extend the Climate Change Agreement scheme (CCA) would save businesses up to £300 million a year.

    Launching a consultation on the plans, the Government said it will enable new targets to be put in place from January 2021, allowing the extension of the scheme beyond its current March 2023 end date to March 2025.

    The CCA sets targets for reducing businesses’ energy use in return for discounts on the climate change levy on their energy bills.

    The 2-year extension, announced by the Chancellor during the Spring Budget, will give eligible companies extra financial support and security by guaranteeing access to savings until 2025.

    Energy Minister Kwasi Kwarteng said: “Extending the Climate Change Agreement scheme will give businesses greater clarity and security at a time when they need it most."

    “This extension will save businesses money while cutting emissions - a key element of our work to combat climate change in the months and years ahead.”

    The consultation will also allow new businesses to apply to join and gain access to savings as of January 2021. Under the current rules, businesses have not been able to join the scheme since October 2018.

    Read more

  • Power station owner to pay £37.2m over market manipulation

    Power station operator InterGen is to pay £37.2m after an Ofgem investigation over energy market manipulation.

    The watchdog found the company sent misleading signals to National Grid ESO about the energy it could supply in order to make substantial profits.

    Ofgem launched an investigation into InterGen, which owns four power stations in the UK, following suspicious activity in the market in October/November 2016.

    It found that InterGen staff deliberately sent misleading signals to National Grid by falsely claiming that some of its power stations would not be generating during the critical ‘darkness peak’ evening period when demand is highest. This pushed National Grid into spending money in the balancing mechanism that it did not need to.

    Jonathan Brearley, chief executive of Ofgem, said: “This strong action sends a signal that Ofgem will not tolerate any form of market abuse that undermines the integrity of the wholesale market that can ultimately harm consumers.”

    Jim Lightfoot, InterGen’s Chief Executive said: “We deeply regret and sincerely apologise for the behaviour of former traders in these 2016 incidents. We take this matter incredibly seriously and have cooperated with Ofgem’s investigation. None of the traders involved in 2016 are still with the company.”

    Read more

  • Almost half UK’s carbon footprint is imported

    Nearly half the UK’s carbon footprint comes from emissions released overseas to meet UK-based demands, according to a new report.

    Products including clothing, processed foods and electronics imported into the UK are counted as the source country’s emissions, not the UK’s - although they would not have been produced were it not for UK demand.

    The report, commissioned by the Worldwide Fund for Nature (WWF) highlights the importance of addressing carbon intensive imports such fossil fuels and using the UK’s new trade policy to encourage the highest standards of environmental production abroad.

    Professor John Barrett from the Sustainability Research Institute at the University of Leeds which carried out the research said, said: "Over the past 30 years, the UK’s emissions associated with our consumption have only declined by 15% at a time when they need to reduce to close to zero in the next 30 years."

    "Increasingly, the impact of our consumption occurs outside the UK, creating a situation where our emissions inside the country reduce while emissions associated with imports increase. "

    "It is essential the UK commits to reducing its emissions both inside and outside the UK to adequately respond to the climate crisis."

    Read more

  • Energy transformation could deliver £80 trillion economic boost

    Upping the pace of energy system transformation could boost global GDP by £80 trillion between now and 2050, according to a study.

    Investing heavily to accelerate the transition to a low carbon world would also nearly quadruple renewable energy jobs to 42 million, expand employment in energy efficiency to 21 million and add 15 million roles in system flexibility.

    Director-General of the International Renewable Energy Agency, Francesco La Camera, said: “The current crisis has exposed deeply embedded vulnerabilities of the current system."

    “By accelerating renewables and making the energy transition an integral part of the wider recovery, governments can achieve multiple economic and social objectives in the pursuit of a resilient future that leaves nobody behind.”

    Low-carbon investment would deliver savings eight times more than costs when health and environmental benefits are also taken into account.

    Read more