The Informer

This week’s headlines: a report from the grid operator predicts demand-side response will become increasingly valuable in the years ahead as Britain shifts towards net-zero; Government announces its latest funding to fuel a green recovery; and Ofgem’s scheme to help energy innovators gets a revamp.

  • DSR ‘increasingly valuable’ in Future Energy Scenarios

    Demand-side response (DSR) will become increasingly valuable to Iarge energy users in the years ahead as the energy system moves towards net zero, according to the grid operator’s latest forecast report.

    The Future Energy Scenarios report from National Grid ESO expects growth in DSR across all the possible pathways it explores for Britain’s energy system.

    Of the four future scenarios, three would see the nation achieve net-zero on or ahead of its legally binding 2050 deadline.

    DSR is seen as growing across all the scenarios and the report predicts “as the market for flexibility increases it becomes more valuable.”

    The report also said investment in technologies such as hydrogen and carbon capture and storage alongside growth in renewable generation will be vital to achieve net zero.

    National Grid ESO’s Head of Strategy, Mark Herring, said the latest report paints an “exciting picture” of net zero Britain with electricity playing a crucial role in meeting meet the 2050 emissions targets.

    Across all scenarios, the report sees growth in renewable energy generation, including significant expansion in installed offshore wind capacity and believes the power sector could achieve negative emissions by 2033.

    The report also sees significant long-term potential for electric vehicles to provide flexibility.

    “Vehicle-to-grid (V2G) services could provide up to 38 GW of flexibility from 5.5m vehicles. By 2050, up to 80 per cent of households smart charge their electric vehicle and up to 45 per cent actively provide V2G services,” it adds.

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  • £350m of new funding to decarbonise key industries

    The UK Government has announced a funding package of around £350 million to fuel the green recovery through measures such as decarbonising heavy industry.

    The funding is part of a wider package to accelerate economic recovery in the wake of the coronavirus pandemic.

    The pot includes around £139m which will be spent to support the transition from natural gas to hydrogen power and scale up carbon capture and storage technology.

    Prime Minister Boris Johnson said: “The UK now has a huge opportunity to cement its place at the vanguard of green innovation, setting an example worldwide while growing the economy and creating new jobs.”

    Business and Energy Secretary, Alok Sharma, added: “This funding will reduce emissions, create green-collar jobs and fuel a strong, clean economic recovery – all essential to achieving net zero emissions by 2050.”

    The Government said that over the past decade the UK has cut carbon emissions by more than any similar developed country. In 2019, UK emissions were 42% lower than in 1990, while the economy grew by 72% over the same period.

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  • Revised regulation ‘sandbox’ launched for innovators

    Energy innovators are being urged to apply to take part in an updated version of Ofgem’s ‘sandbox’ initiative.

    The Sandbox helps innovators trial or bring to market new products, services, business models and methodologies without some of the usual rules applying.

    The regulator is also removing the application window for the sandbox, with the service to now be open at all times.

    Ofgem said an expansion of the initiative, which was launched in 2017, will support the step change needed in the way energy is produced and consumed in order to hit the UK’s net zero target.

    “To remain relevant in the face of rapid, technology-driven system change, regulators need to harness new perspectives and tools. We need to complement strategic reforms with approaches which allow us to keep pace with innovation,” it said.

    “That’s why we developed the Sandbox: to allow innovators to experiment and bring propositions to market, while continuing to protect consumers.”

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  • Offshore wind may soon be cheapest form of energy for UK

    Offshore wind power will soon be so cheap to produce that it will undercut fossil-fuelled power stations and could prove to be the lowest-cost form of energy for the UK, according to new research.

    Analysis by academics at Imperial College London and published in Nature Energy said the most recently approved offshore wind projects across five countries in Europe will most likely operate with ‘negative subsidies’ which in effect means they are paying money back to the government.

    “Energy subsidies used to push up energy bills, but within a few years cheap renewable energy will see them brought down for the first time. This is an astonishing development,” said lead researcher Dr Malte Jansen.

    Under the CfD support scheme, if a company’s bid is lower than the wholesale electricity price once the wind farm is up and running, then it pays the government back the difference which is passed through to consumer’s energy bills.

    The UK’s September 2019 auction saw winning companies bid a record low of £40 per megawatt hour (MWh) of power.

    The research team analysed likely future electricity price trends and found that the contracted price is very likely to be below the UK wholesale price over the lifetime that these wind farms would produce electricity, from the mid-2020s onwards.

    The team say that these wind farms are likely to be built and run with these costs, since financing is now accessible at lower costs for such projects, owing to trust in the now mature technology.

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  • Work on pioneering ‘smart energy city’ underway

    A project to create the UK's largest city-wide smart energy system has begun in a move which could serve as a blueprint for other locations.

    The council-led scheme in Peterborough will connect low carbon electricity, heat networks, battery storage and electric vehicle charge points to cut household bills and CO2 emissions.

    The Peterborough Integrated Renewables Project (PIRI), funded by UK Research and Innovation (UKRI) and a number of private sector partners, could see the city’s energy costs fall by up to a quarter when it is completed in 2022.

    Professor Philip Longhurst, head of the Centre for Climate and Environment Protection at Cranfield University which is involved in the project, said: "The PIRI project shows how local low carbon, smart energy systems could be used across the UK for the benefit of both the environment and consumers."

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