Posted on: 13/10/2020
A significant fall in global energy-related emissions due to Covid-19 could be quickly reversed without a change in government policies; more than £65m of network charges have been deferred under a pandemic relief scheme; and Government has been urged not to overlook wave and tidal power in the dash for offshore wind.
The risk of a rapid rebound in energy-related emissions as economies recover from the pandemic has been highlighted in a major new report.
The International Energy Agency (IEA)’s latest outlook report has forecast that global energy demand will fall by 5% in 2020, the largest peacetime drop on record apart from the Great Depression, and contributing to a 7% drop in energy-related emissions in 2020.
However, although emissions are set to bounce back more slowly than after the financial crisis of 2008-2009, the IEA said the world is still a long way from a sustainable recovery. It said the UK was one of only a handful of countries worldwide where a step-change in clean energy investment has been proposed in recovery plans.
Under one scenario outlined by the IEA based on current policies, global energy demand rebounds to its pre-crisis level in early 2023 and emissions will exceed 2019 levels by 2027. However, if governments and investors step up their clean energy efforts in line with a ‘sustainable development’ scenario, solar and wind would see “spectacular growth” which the IEA said would be hugely encouraging for overcoming the world’s climate challenge.
Fatih Birol, the IEA’s Executive Director, said he did not see clear signs of a peak in oil demand or a rapid decline based on current policy positions.
“The world is far from doing enough to put emissions into a structural decline. We expect that global emissions will bounce back with the rebound of the economy if no large shifts in government policies take place,” warned Birol.
The report also highlights the continuing growth of renewables, particularly solar where the IEA has forecast that deployment of the technology will increase by an average of 13% a year between 2020 and 2030.
“Solar is the new king of global electricity markets,” Birol proclaimed.
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A total of 18 firms deferred charges worth a total of £65.1m under schemes set up by Ofgem to provide help to energy suppliers and shippers facing cash flow challenges as a result of the pandemic.
In June the regulator announced the support measures as a result of what it said was an unprecedented public health emergency.
Between June and September, network companies provided relief to cash flow-constrained suppliers and shippers by enabling them to defer up to three months’ of charges relating to gas transportation, electricity distribution and electricity transmission.
The development and management of the schemes involved the Energy Networks Association (ENA) and the Joint Office of Gas Transporters.
The schemes have now closed and the firms who benefitted from support are required to repay the charges in full by March 2021.
The schemes had offered a total of up to £350m in support for eligible electricity suppliers and gas shippers.
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The significant opportunities presented by wave and tidal energy projects shouldn’t be overlooked as the Government pushes ahead on plans to dramatically expand offshore wind in the UK, an industry body has urged.
Last week Prime Minister Boris Johnson set out plans to increase offshore wind capacity to 40GW by 2030, up from the previous target of 30GW.
Marine Energy Wales welcomed the announcement but stressed it was important to remember the UK is not only leading in offshore wind development, but in other green energy technologies such as wave, tidal stream and tidal range.
A recent report from the organisation highlights the potential to establish an early mover advantage for the sector in an export market worth an estimated £76 million by 2050. Jess Hooper, Programme Manager for Marine Energy Wales, said: “As the prime minister stated “our seas hold immense potential” to produce green energy, however there are a number of sustainable and efficient ways we can harness this strength."
“The UK currently has a global leading role in marine energy such as wave, tidal stream and tidal range as well as floating offshore wind which we need to capitalise on. Having an energy mix provides the UK with energy security and helps to meet our ambitious carbon zero targets, therefore we call on UK Government to support the full range of marine energy generation on offer”.
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Midlands-based supplier Tonik Energy has become the third small energy firm to fail so far this year.
ScottishPower has been appointed to take on the company’s 130,000 domestic customers following a competitive process run by Ofgem.
Tonik’s demise comes shortly after it was named by the regulator as one of seven suppliers which owed a total of £34m under the FiT and Renewable Obligation schemes.
Will Owen at comparison site Uswitch.com, said Ofgem’s action was a “warning sign” over Tonik’s situation.
“Many energy companies, particularly the smaller challenger brands, operate on thin profit margins,” he said.
“The Covid-19 lockdown has also resulted in many customers delaying or missing payments, leaving some suppliers without the cashflow to keep going day-to-day.”
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Installed geothermal capacity is predicted to expand significantly in the next five years as countries increasingly shift to low carbon energy sources, according to a new report.
Global geothermal power production capacity will rise from 16 gigawatts (GW) at the end of 2020 to 24 GW in 2025, analysis by Rystad Energy shows.
From 2010 to 2020, a total of $40 billion has been invested in new geothermal energy developments. Although the US dominates the current capacity, Rystad said many other countries were planning to enter the geothermal market soon, especially in Europe.
“Many of these projects are still on the drawing board and will have to compete with other renewable sources such as wind and solar,” says Audun Martinsen, Rystad Energy’s Head of Energy Service Research.
Historically, geothermal projects have been developed in countries with active volcanic areas, where naturally occurring pockets of heat create a favourable environment from which to generate geothermal energy compared to countries. Geothermal plants can be developed in non-volcanic regions, but deeper drilling is required to reach the temperature levels needed.
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