The Informer

This week's energy news headlines: Falling costs of wind and solar PV could displace fossil fuels from electricity production by 2035; Ofgem announces plans to rollout out half-hourly settlement across the retail market; Power demand is set to recover strongly this year, but emissions are also set to rise.

  • Falling renewables costs could lead to fossil-free power by 2035

    Rapidly falling costs of solar and wind could see renewables push fossil fuels out of global electricity production by the 2030s, according to a new report. Analysis by the Carbon Tracker think tank predicts that by 2030 all existing solar PV capacity and half that of wind will be cost-competitive against fossil fuels, even coal, for power generation across the world.
    Continuing falling costs could see fossil fuels displaced out of the market altogether just a few years later, and by 2050 renewables could meet all the world’s energy needs. In fact, the report said PV and wind could meet the global energy demand 100 times over. Solar’s upfront unit costs have fallen by 18% each year on average since 2010, with a 9% per cent annual fall for wind. That means that currently 60% of installed solar and 15% of installed wind is already directly competitive with legacy hydrocarbon generation. Carbon Tracker said the world is now “entering a new epoch, comparable to the industrial revolution”. “Energy will tumble in price and become available to millions more, particularly in low-income countries. Geopolitics will be transformed as nations are freed from expensive imports of coal, oil and gas,” it predicted. A concerted effort to accelerate renewables’ average deployment to 15% a year would lead to all the world’s electricity being green by 2035, and all global energy use – including heat and transport – following by 2050. Read more

  • Half-hourly settlement to extend across retail market

    Ofgem has given the green light to rolling out market-wide half-hourly settlement across the retail electricity market. The regulator said the move marks a major milestone in the transition to the more flexible energy system needed to achieve net zero. Ofgem said the move will build on changes already made requiring half-hourly settlement for medium to large non-domestic consumers, and elective half-hourly settlement for domestic and smaller non-domestic consumers.
    Anna Rossington, Ofgem’s Interim Director, Retail, said by sending accurate signals to suppliers about customers’ electricity use and the cost of serving those customers throughout the day, it will place incentives on suppliers to offer new tariffs and products that encourage more flexible use of energy. “This will enable the industry to make best use of existing infrastructure which should reduce the need to build expensive new generation as electricity consumption increases with a move to more electric cars and new forms of heating,” she said. Implementation of the new system is expected to take place over a period of four and a half years and to be complete by October 2025. Read more

  • Energy demand to recover in 2021

    Global energy demand is set to increase by 4.6% in 2021, pushing it above its 2019 level as economies bounce back from the pandemic, according to a new report. The International Energy Agency’s Global Review also said that energy-related carbon dioxide emissions are on course to surge by 1.5 billion tonnes in 2021 – the second-largest increase in history – reversing most of last year’s decline caused by the Covid-19 pandemic. Such a rise would be the biggest since 2010, during the carbon-intensive recovery from the global financial crisis. Fatih Birol, the IEA Executive Director, said that forecast was a “dire warning that the economic recovery from the Covid crisis is currently anything but sustainable for our climate”. “Unless governments around the world move rapidly to start cutting emissions, we are likely to face an even worse situation in 2022.” Electricity generation from renewables is set to leap by over 8% in 2021, accounting for more than half of the increase in overall electricity supply worldwide. But demand for all fossil fuels is on course to grow significantly in 2021, with both coal and gas set to rise above their 2019 levels. Read more

  • E.ON to pay over £650,000 over direct debit issue

    Supplier E.ON has agreed to make goodwill payments to compensate customers after direct debit payments were taken earlier than agreed. A majority of the affected payments were due to be taken from households in January 2021, but E.ON took payments on 24 December. Ofgem said the error meant customers may have experienced out of pocket expenses, unexpected overdraft bank charges and difficulty making payments in the run up to Christmas. As well as compensating customers, E.ON, which self-reported the issue to the regulator, has agreed to pay an additional £627,312 to the energy redress fund Anna Rossington, Director of Retail at Ofgem, said: “Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed direct debit payment dates. This failure is a reminder to suppliers that when making changes to their systems, they need to undertake appropriate checks to avoid any unintended consequences for customers.” Read more

  • Networks set out manifesto ahead of Scottish elections

    The energy networks have set out their priorities for helping a new Scottish government make progress towards a net zero economy. Ahead of Scottish elections next week, the Energy Networks Association (ENA) detailed five priorities including aligning Ofgem’s RIIO regulatory framework with the nation’s energy plans and refining the planning system to support the infrastructure of the future. The ENA also calls for Scotland to become an international centre for green gas, support the nationwide roll-out of electric vehicle infrastructure and ensure Scottish homes are heated efficiently and without carbon. The ENA stressed the next ten years is a short period of time to deliver on the infrastructure and innovation needed to hit the 2030 targets. David Smith, Chief Executive of the ENA, said: “Past Scottish Governments have set a high bar for action on climate change and now all parties have made it clear that their priority for this Parliament is a green Covid recovery. “It’s now imperative that we seize the opportunity of this consensus to align policy and regulation with ambition. We look forward to working with the new government to make that ambition a reality.” Read more