The Informer

This week’s headlines: an industry group claims a more flexible energy system could have saved consumers £133m in lockdown balancing costs; sunny weather and low demand are expected to result in record FiT charges; and more support is urged to help community energy grow.

  • Smarter energy system could have saved £133m during lockdown

    More than £130 million could have been saved in electricity grid costs during the lockdown period if GB had a more “intelligent” and flexible energy system, according to an industry group.

    The Flexibility First Forum said that greater use of demand-side response, electric vehicle (EV) smart charging and technology such as home solar batteries which intelligently use power during periods of low demand would have seen a 27 per cent reduction in balancing costs for National Grid and cut energy bills.

    Flexible storage capacity from six million electric vehicles could have provided the grid with an extra 3.6TWh of energy.

    During lockdown, high levels of renewable generation and record low energy demand have created balancing challenges for the electricity system operator and led to increased balancing costs estimated at some £500m.

    In a letter to regulator Ofgem from the industry group it said the bank holiday weekends have been a “wake up call” over the need for a flexible, digital grid to make the most of cheap renewable power.

    “Despite successful real-world results and commitments from Ofgem and the Government to create a more intelligent system, the market frameworks that would enable these smart technologies to support the energy system are not yet in place,” it said.

    “While reforms are underway, it’s not certain they will go far and fast enough in delivering the signals that tell users when they should be charging for cheaper, greener energy.”

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  • FiT charges forecast to reach all-time high

    The Feed-in Tariffs (FiT) scheme is expected to see a sharp cost increase for the upcoming quarterly levelisation, according to analysis.

    Consultancy Cornwall Insight said a combination of extremes in sunshine and low demand due to the Covid-19 outbreak are “creating the perfect conditions” to drive costs up to an all-time high for the April - June quarter.

    FiT costs are recovered from suppliers through quarterly levelisations, and an annual reconciliation. which spreads the costs across all suppliers. Costs are typically highest in summer quarters given lower demand and increased solar output.

    Tim Dixon, Team Lead at Cornwall, said that the current unprecedented circumstances raises questions over whether the additional costs should be deferred.

    “Perhaps this could be done in a similar manner to the CfD scheme where BEIS has agreed to provide a one-off interest free loan to help cover the projected shortfall in CfD payments, and deferring repayment until April – June 2021,” he said.

    However, Dixon points out the FiT scheme works differently and said it “could be a more tricky issue to resolve” with additional considerations needed to protect FiT licensees from bearing a disproportionate amount of the costs.

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  • Community energy boost urged as new bill passed

    Community energy projects could be powering the equivalent of 2.2 million homes by 2030 if their full potential is unlocked, according to a report.

    Community Energy England’s (CEE) vision report calls for a transformation of the energy system where consumers are also as active participants in a more decentralised, distributed and democratised energy system.

    CEE said that in 2014, the UK government envisaged a million homes would powered by community energy by 2020.

    “However, due to policy setbacks we have only achieved 10% of. We must not make this mistake again. UK Government needs to offer policy and financial support that recognises community energy’s essential role in the net-zero transition and the huge social and community benefit it brings,” it said.

    Meanwhile, the Local Electricity Bill has been successfully introduced in Parliament. If enacted it would give Ofgem a duty to create a ‘Right to Local Supply’.

    Campaign group Power for People said the new right would ensure that new and existing community energy companies face setup and running costs proportionate to the scale of their business. This would allow them to be financially viable and thus unleash their potential in towns, cities and villages across the country.

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  • Falling renewables costs present ‘clear opportunity’

    Falling renewable energy costs present a huge opportunity to accelerate progress towards the Paris Agreement goals, according to a report.

    The report, by partners including the UN Environment Programme (UNEP) and BloombergNEF, analyses 2019 investment trends, and clean energy commitments made by countries and corporations for the decade ahead.

    Renewable energy capacity, excluding large hydro-electric dams of more than 50 MW, grew by 184GW in 2019. This highest-ever annual addition was 20GW, or 12 per cent, more than the new capacity commissioned in 2018.

    Yet the monetary investment in 2019 was just 1 per cent higher than the previous year as the cost of installing renewable energy has hit new lows, meaning future investments will deliver far more capacity.

    “The chorus of voices calling on governments to use their COVID-19 recovery packages to create sustainable economies is growing,” said Inger Andersen, Executive Director of UNEP.

    “This research shows that renewable energy is one of the smartest, most cost-effective investments they can make in these packages.”

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  • Ofgem data move to benefit energy innovators

    Plans by regulator Ofgem to introduce a new licence condition will help support the growing number of digital energy innovators, according to an industry body.

    Ofgem has announced its intention to require network companies to comply with data best practice guidance as part of the RIIO-2 and RIIO-ED2 price controls.

    The guidance, developed with the Energy Systems Catapult (ESC), includes the principle of ‘Presumed Open’ which actively encourages open data and data sharing.

    Dr Richard Dobson, the ESC’s Data Systems Practice Manager, said the principle will enable decarbonisation, stimulate innovation and help feed the growing number of UK based digital energy innovators.

    “This will increase transparency and create opportunities for low carbon innovators to access data which will enable a range of low carbon products and services,” he said.

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