The Informer

This week's energy news headlines: Consumer behaviour and clear government policies will be critical to achieve net zero; Power demand is set to rise by almost 5% this year and outstrip growth in renewable capacity; Electricity system prices hit their highest for almost a decade in Q2.

  • Emissions warning as demand for power outstrips renewables growth

    Global demand for electricity is growing faster than renewables and leading to a rise in fossil fuel generation, according to a new report. The International Energy Agency (IEA) predicts global electricity demand is set to grow by close to 5% in 2021 and 4% in 2022 as economies recover from the impact of the pandemic. Based on current policy settings and economic trends, electricity generation from renewables – including hydropower, wind and solar PV – is on track to grow strongly around the world over the next two years – by 8% in 2021 and by more than 6% in 2022. But even with this strong growth, the IEA said renewables will only be able to meet around half the projected increase in global electricity demand over those two years. Fossil fuel-based electricity generation is set to cover 45% of additional demand in 2021 and 40% in 2022, with nuclear power accounting for the rest. As a result, carbon emissions from the electricity sector – which fell in both 2019 and 2020 – are forecast to increase by 3.5% in 2021 and by 2.5% in 2022, which would take them to an all-time high. Keisuke Sadamori, IEA’s Director of Energy Markets and Security, said: “Renewable power is growing impressively in many parts of the world, but it still isn’t where it needs to be to put us on a path to reaching net-zero emissions by mid-century. “As economies rebound, we’ve seen a surge in electricity generation from fossil fuels. To shift to a sustainable trajectory, we need to massively step up investment in clean energy technologies – especially renewables and energy efficiency.” Read more

  • Electricity prices rise again in Q2

    Relatively high demand as lockdown measures eased and lower renewable generation saw wholesale prices continue to rise in the second quarter of the year with average system prices hitting their highest for a decade, according to new figures. Data compiled by EnAppSys found average APX wholesale prices reached £72.20/MWh, a 15.3% increase from Q1. System prices peaked at £1,971.59/MWh in mid-April and the average system price was £74.85/MWh, the highest of any quarter since Q4 2011. The report also showed that low levels of wind and cloudy weather lead to renewable generation decreasing by 25% compared to Q1 and decreasing 9% compared to Q2 2020. Gas, coal and imports all saw increases in the quarter. Gas contributed 41.2% to the fuel mix in the quarter, followed by renewables with 32.3%, nuclear with 16.4%, imports with 9.3% and coal with 0.8%. Demand recovered from the record low levels of Q2 2020 to be more in line with what is expected for this time of year, but was slightly lower than pre-2020 Q2 levels, following the trend of gradual decrease seen in recent years. Read more

  • Energy professionals believe emissions target will be missed

    Only 12% of energy professionals think the UK will meet or exceed its 2050 net zero target, according to a survey. However, the survey by the Energy Institute of more than 400 people working in the sector said the adoption of the more ambitious target in 2019 - up from an initial goal of 80% reductions by 2050 - has shifted the perceptions of what is achievable. In 2015, fewer than one-in-five energy professionals expected the UK to achieve at least a 78% reduction in emissions but in 2021, four-in-five do. Respondents to the institute’s Energy Barometer 2021 survey have also called for government and industry to coalesce around a national skills strategy that underpins the development of low-carbon energy and supply chains. Energy Institute President Steve Holliday said: “A laser focus on policies and initiatives to drive the development of low-carbon technologies is vital, but it must not eclipse the equally important need to support and develop the net zero workforce. “We often hear about the long lead times involved in building a new power plant. But the lead times required to bring on a heat pump installer or wind turbine engineer - from inspiring interest in STEM in schools through the necessary apprenticeships and university degrees and into the workforce - are as long if not longer. “The Barometer is clear that decarbonisation won’t happen at the necessary speed and scale without the assembly of a mass skilled workforce, and so we are encouraged by signals from ministers that this will be an integral part of the UK’s net zero strategy.” Read more

  • Key role for consumers in net zero energy shift

    Shifts in consumer behaviour supported by clear government policies will be critical to achieving net zero, according to the system operator’s latest report.
    System operator National Grid ESO’s latest Future Energy Scenarios (FES) report also highlights the dramatic growth needed in new electricity storage capacity to enable a more flexible system with as much as 13GW required by 2030, along with between 34GW and 77GW of new wind and solar generation. Under the report’s ‘Leading the Way’ and ‘Consumer Transformation’ decarbonisation scenarios - reaching net zero by changing the way energy is used or the way it is generated and supplied - the flexibility currently provided by the gas transmission system will significantly reduce. With the decline of natural gas use, hydrogen also plays a central role in all of the net zero scenarios. The report includes forecasts for up to 37.4 million electric vehicles on Britain’s roads by 2050, power sector emissions being negative by 2034 and no unabated combustion of natural gas for power beyond 2035 in the most ambitious scenario. Three of the scenarios see net zero achieved by 2050. Decarbonisation happens slowest in the ‘Steady Progression’ scenario, where 2050 emissions are reduced by 73% from 1990 levels and net zero isn’t achieved. Matthew Wright, head of strategy and regulation at National Grid ESO said the report gives a “glimpse of a Britain that is powered with net zero carbon emissions” but that significant changes are needed to get there. “If Britain is to meet its ambitious emissions reduction targets, consumers will need a greater understanding of how their power use and lifestyle choices impact how sustainable our energy system will be – from how we heat our homes, to when we charge our future cars – and government policy will be key to driving awareness and change.” Read more

  • Major industry players submit Scottish offshore wind bids

    Some of the biggest names in the global energy sector have submitted bids in the first round of offshore wind leasing in Scottish waters for a decade, The Crown Estate Scotland will now begin the process of examining applications under the ScotWind leasing round. Confirmed bidders include BP, which has joined forces with Energie Baden-Württemberg AG (EnBW) of Germany. A partnership involving SSE Renewables, Marubeni Corporation - parent firm of SmartestEnergy - and Danish fund management company Copenhagen Infrastructure Partners has also jointly submitted competitive bids. Ben Miller, Senior Policy Manager at Scottish Renewables, said the interest in the round showed how offshore wind developers from across the world have recognised Scotland’s renewables potential. “This is a huge year for Scotland, with COP26 coming to Glasgow, and the outcome of this process will confirm our ambition to be a world leader in deploying new offshore wind technologies,” he said. “We look forward to the leasing results, and for the further expansion of an industry which is already creating major economic and environmental benefits right across the country." Read more