Informer Issue 505 - 23/03/2021

EDF has announced plans to close its West Burton A plant by September 2022 in a move which would leave Britain with just one coal-fired power station.

Over the next 18 months two of the four 500MW coal units at the site in Nottinghamshire will be available to meet Capacity Market commitments before moving into decommissioning.

The closure of the site will leave only the Ratcliffe-on-Soar power station, also in Nottinghamshire, burning coal ahead of an expected Government deadline for the phase out of unabated coal usage by October 2024.

EDF’s Generation Managing Director Matt Sykes, said: “West Burton A and its loyal workforce have played a critical role providing power to the UK for 55 years, including during this recent Winter."

“With EDF’s power generation strategy firmly focused on nuclear and renewables - and in this key year for UK leadership on climate change - we now believe it is the right time to provide clarity to our employees and all those connected to the site.”

A statement from the union officers at the site which employs 170 said the announcement brings “welcome certainty” to the West Burton A workforce about the future of the station.

“With Government policy to close all UK coal generation by 2024 we knew it had a limited future so we have been working alongside EDF to understand the implications for West Burton A and to prepare colleagues for the future. Knowing the date of closure allows people to make plans. Enabling a ‘Just Transition’ away from coal generation is very important for the unions.”

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Major changes to network charging will have “far reaching” impacts on the UK’s decarbonisation progress, according to a new report.

The report, from not-for-profit energy organisation Regen, argues that changes in progress through Ofgem’s Targeted Charging Review (TCR) coupled with proposals in the Access and Forward Looking Charges Significant Code Review (SCR) could “fundamentally impact” new and existing customers on the distribution network.

It said some of the changes under Ofgem’s network charging review could be positive, such as enabling local matching of demand and generation.

However, the report also warns there could be negative consequences such as different locational charging zones conflicting with delivery of local net zero plans.

The report said some commercial and industrial customers may see higher network charges as a result of the TCR’s shift from variable to fixed costs, based on capacity bandings. However, the actual gross change will depend on the consumers relative utilisation of capacity, the extent to which they previously avoided Triad network charges and their ability to respond to new forward-looking signals.

Poppy Maltby, Head of Cities and Regions at Regen which worked on the report together with SP Energy Networks, said: “How and what people pay to connect to and use the networks will affect how rapidly the network infrastructure can update and evolve to support net zero."

“The far reaching impact that some of these national policies are likely to have on local areas means we are keen to see Ofgem having more engagement with devolved, local and regional governments to give these stakeholders greater say in how their local energy networks develop.”

SmartestEnergy’s Head of Pricing, Tom Putney, has recently provided an update on the TCR for I&C energy users and generators here:

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National Grid has struck a £7.8bn deal to acquire UK's largest electricity distribution business as part of what it said was a transformational move.

It has agreed to acquire PPL WPD Investments, the holding company of Western Power Distribution (WPD) in a transaction which will see it focus more on electricity transmission and distribution.

As part of the transaction, National Grid is also selling US-based Narragansett Electric Company (NECO) to PPL Energy Holdings, another subsidiary of PPL as well as selling a majority stake in National Grid Gas towards the end of 2021.

John Pettigrew, Chief Executive of National Grid, said the transactions announced were “transformational for our UK portfolio”.

"The acquisition of WPD is a one-off opportunity to acquire a significant scale position in UK electricity distribution. WPD has a high quality, fast growing asset base and an excellent track record of customer satisfaction, operational performance and financial returns.”

Laura Hoy, an analyst at investment group Hargreaves Lansdown, said from a strategic standpoint, the deals “make sense as the world shifts away from fossil fuels usage”.

“Not only are homes consuming more, but the boom in electric cars represents an opportunity for National Grid, and the WPD acquisition puts it one step closer to seizing it."

“Of course, the deal will still have to jump through a number of regulatory hoops before completion and there’s no guarantee that National Grid Gas will have suitable prospective buyers. But if all goes to plan this could put National Grid unquestionably at the centre of the UK’s pivot to electric.”

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The UK’s Government’s legal target to be net zero carbon by 2050 is in jeopardy unless urgent action is taken to improve energy efficiency of homes this decade, according to MPs.

The Environmental Audit Committee (EAC) warned the Government is failing to grasp the enormous challenge of decarbonising the UK’s housing stock, which accounts for 20% of greenhouse gas emissions.

The committee said the Government appears to have underestimated the costs to decarbonise UK homes by 2050, at between £35 billion and £65 billion.

The EAC said it was concerned that the Government has announced just over £4 billion of the £9.2 billion committed to in the 2019 manifesto for energy efficiency measures. It said the lack of investment and signals to the energy efficiency sector is doing little to incentivise businesses to upskill engineers and installers.

Committee Chairman Philip Dunne MP said: “Making 19 million homes ready for net zero Britain by 2050 is an enormous challenge that the Government appears to have not yet grasped. In the next 29 years, the Government must improve energy efficiency upgrades and roll out low carbon heating measures: a material start must be made now."

“Government investment to improve energy efficiency has been woefully inadequate. A much better understanding of cost, pace, scale and feasibility of skills development is desperately needed for net zero Britain.”

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National Grid is looking at the potential to develop a 2,000 kilometre hydrogen network for the UK by around 2030.

The hydrogen ‘backbone’ aims to join together industrial clusters around the country, repurpose 25% of the current gas transmission pipelines, and transform the way homes and industry are powered.

Named ‘Project Union’, it will build on the Government’s ten-point plan to invest more than £1 billion to unlock the potential of hydrogen and support the establishment of carbon capture, utilisation and storage (CCUS) in four industrial clusters.

National Grid said the backbone could carry at least a quarter of the current gas demand in Great Britain today, and provide vital resilience and storage.

The project is exploring a hydrogen backbone connecting the Grangemouth, Teesside and Humberside clusters, as well as linking up with Southampton, the North West and South Wales clusters.

Antony Green, Hydrogen Project Director at National Grid, says: “Hydrogen has a critical role to play as we transition to a cleaner energy future. The potential is exciting, and a hydrogen backbone to support the industrial clusters could accelerate the roll-out. But there is a lot of work to find the most economic way to repurpose our assets and how we might develop a phased conversion to develop a hydrogen network for the UK.”

Project Union will also look at how to connect the backbone to the existing interconnectors coming into the UK to link with the EU hydrogen backbone that is also being developed and which could open up future import and export of hydrogen with European neighbours.

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