Informer Issue 495 - 12/01/21

Tight margins on the GB power system as the cold weather continues have seen electricity prices hit multi-year highs. Last week National Grid ESO issued but later withdrew further calls for generators to increase its buffer of spare capacity as cold temperatures saw increased demand at a time when there was reduced availability of some generation and an interconnector with the Netherlands remains out of action. The tighter margins saw the system imbalance price reach £4,000/MWh on Friday evening, the highest seen since 2001 when new electricity trading arrangements were introduced. The Nord Pool N2EX UK day-ahead power auction also saw its highest-ever hourly price on Wednesday, hitting £1,000.04/MWh. The overall day-ahead power price reached just over £145/MWh, the highest since 2016. Phil Hewitt, a director at energy consultancy EnAppSys, said although price spikes would increasingly be seen they will encourage the building of new assets and the development of innovations such as demand response that allow the electricity system to decarbonise. “In the future, prices will become more extreme at certain points – either super-high prices like this week or super-low prices when renewables are running at maximum output and this will encourage solutions via the market to smooth generation and demand,” he said. Recent weeks have seen the system operator issue a series of Electricity Margin and Capacity Market notices aimed at encouraging generators to increase supply. National Grid ESO has stressed the notices are routine tools and don’t signal there is not enough generation to meet demand.

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Committing to 100% clean energy is among the actions Prince Charles wants businesses to take as part of a major new sustainability initiative. The ‘Terra Carta’ - or Earth charter – has been launched by the Sustainable Markets Initiative which was launched by the Prince at the World Economic Forum 2020 meeting in Davos. Terra Carta aims to harness the "irreplaceable power of nature". Prince Charles, who has been a champion for the fight against climate change and biodiversity loss over the past five decades, urged those in industry and finance to provide practical leadership to the project, “as only they are able to mobilise the innovation, scale and resources that are required to transform our global economy". "If we consider the legacy of our generation, more than 800 years ago, Magna Carta inspired a belief in the fundamental rights and liberties of people” he said. "As we strive to imagine the next 800 years of human progress, the fundamental rights and value of nature must represent a step-change in our 'future of industry' and 'future of economy' approach." The charter highlights actions that the private sector could adopt including ensuring their operations are powered by 100% clean energy and making sustainability the responsibility of the entire management team.

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Alok Sharma is leaving his post as Business Secretary to focus full-time on his role as President of the COP26 climate conference taking place in Glasgow in November. Kwasi Kwarteng takes over Sharma’s previous role and Anne-Marie Trevelyan has been named as the new Business, Energy and Clean Growth Minister. Sharma said he was delighted to be able to “dedicate all my energies" to the COP26 role. "The biggest challenge of our time is climate change and we need to work together to deliver a cleaner, greener world and build back better for present and future generations. "Through the UK's Presidency of COP26 we have a unique opportunity, working with friends and partners around the world, to deliver on this goal." Richard Black, Senior Associate at the Energy and Climate Intelligence Unit (ECIU) said: "Allowing Alok Sharma to focus full-time on his COP26 role is a sensible decision, not least as it signals the government's commitment to ensuring that the summit is a success.”

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Alok Sharma is leaving his post as Business Secretary to focus full-time on his role as President of the COP26 climate conference taking place in Glasgow in November. Kwasi Kwarteng takes over Sharma’s previous role and Anne-Marie Trevelyan has been named as the new Business, Energy and Clean Growth Minister. Sharma said he was delighted to be able to “dedicate all my energies" to the COP26 role. "The biggest challenge of our time is climate change and we need to work together to deliver a cleaner, greener world and build back better for present and future generations. "Through the UK's Presidency of COP26 we have a unique opportunity, working with friends and partners around the world, to deliver on this goal." Richard Black, Senior Associate at the Energy and Climate Intelligence Unit (ECIU) said: "Allowing Alok Sharma to focus full-time on his COP26 role is a sensible decision, not least as it signals the government's commitment to ensuring that the summit is a success.”

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Ofgem has opened an investigation into supplier Symbio Energy over its late payments into the Renewables Obligation (RO) and Feed-in Tariff (FIT) schemes. The regulator said the Watford-based company failed to pay into the buy-out fund or present the required number of ROCs by the initial deadlines and the late payment deadline. The outstanding payment was made on 13 November. In addition to not meeting the RO deadlines, Ofgem said Symbio Energy missed three other payment deadlines over a four-month period for the government’s environmental schemes. Payment deadlines were also missed for two quarterly payments to the FIT levelisation scheme which provides payments to owners of small-scale renewable generators and is funded through levies on suppliers. “The opening of this investigation demonstrates that Ofgem takes compliance with the FIT and RO seriously, and that not making payments on time is unacceptable,” said Ofgem. “The investigation will consider whether further enforcement action is required, which could include a financial penalty.”

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Harnessing the benefits of vehicle-to-grid (V2G) technology could reduce the costs of running the grid by £885m a year, new research claims. Adopting two-way charging technology will also accelerate progress in decarbonising the UK’s power system according to the report by Nissan, E.ON Drive and Imperial College London. V2G technology allows electricity to flow in both directions to and from electric vehicle batteries, allowing energy stored in the battery to be sold back to the grid when demand for power is high. Vehicles can then charge when demand is lower or renewable generation is high, reducing reliance on fossil-fuelled generation and releasing capacity on the networks. The report calls for the introduction of incentives to accelerate widespread adoption of V2G charging systems. Professor Goran Strbac, Chair in Electrical Energy Systems at Imperial College London said V2G can provide “very substantial” economic benefits to the power system as well as reduce carbon emissions. “The additional flexibility provided by V2G fleets can considerably improve system efficiency and reduce investment in new low-carbon generation, while meeting national decarbonisation targets,” he said.

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