The Informer

This week's energy news headlines include: The renewables industry welcomes a new 2035 target for a carbon-free grid; Power starts to flow along the world’s longest undersea interconnector; and Ofgem acts over £7m Renewables Obligation shortfall.

  • PM pledges to decarbonise electricity by 2035

    Renewable industry leaders have welcomed Boris Johnson’s commitment to decarbonise the UK’s electricity grid by 2035.

    The new target, unveiled to coincide with the Conservative Party conference, will require significant investment in renewable generation and nuclear. The Prime Minister said the shift would protect consumers from fluctuating import prices for oil and gas.

    “The advantage of that is that it will mean that, for the first time, the UK is not dependent on hydrocarbons coming from overseas with all the vagaries in hydrocarbon prices and the risk that poses for people’s pockets and for the consumer,” he said.

    “We will be reliant on our own clean power generation, which will help us also to keep costs down.”

    RenewableUK's Chief Executive Dan McGrail said to make the pledge a reality, there needs to be urgent action to remove barriers to new projects.

    “We need to move even faster, building more onshore and offshore wind projects without delay, as well as harnessing the full potential of innovative technologies like floating wind, renewable hydrogen and marine energy,” he said.

    Greenpeace UK chief scientist Dr Doug Parr said the realisation by leaders that gas needs to be taken out of the electricity system was welcome.

    “But the government remains unhealthily attached to nuclear technology, hoping against all experience that it will improve to the point where it becomes competitive with renewables.” Read more

  • UK-Norway interconnector powered up

    The world’s longest subsea electricity interconnector has come into operation, enabling the UK and Norway to share renewable energy.

    Once at full capacity, National Grid’s €1.6 billion North Sea Link (NSL), a joint venture with Norwegian system operator Statnett will help will provide enough electricity to power 1.4 million homes.

    The 450-mile cable, which connects Blyth in Northumberland with the Norwegian village of Kvilldal, near Stavanger, will start with a maximum capacity of 700 megawatts (MW) and gradually increase to the link’s full capacity of 1.4GW over a three-month period

    NSL is National Grid’s fifth interconnector and adds to links with Belgium, France and the Netherlands.

    Norwegian power generation is sourced from hydropower plants connected to large reservoirs. When wind generation is high and electricity demand low in Britain, NSL will enable renewable power to be exported from the UK, conserving water in Norway’s reservoirs. When demand is high in Britain and there is low wind generation, hydro power can be imported from Norway, helping to ensure secure, affordable and sustainable electricity supplies for UK consumers.

    UK Energy, Clean Growth and Climate Change Minister Greg Hands said: “The UK has a strong energy bond with Norway that goes back decades. North Sea Link is strengthening that bond and enabling both nations to benefit from the flexibility and energy security that interconnectors provide.” Read more

  • Five suppliers face orders over £7m in late Renewables Obligations payments

    Ofgem is consulting on issuing five suppliers with final orders to compel them to make £7 million in outstanding payments under the Renewable Obligations (RO) scheme.

    The regulator said if the final orders are confirmed later this month, the five suppliers - Ampoweruk, Whoop Energy, Goto Energy, Home Energy Trading and Colorado Energy - will be compelled to pay into the buy-out fund by 31 October.

    If they do not pay, the regulator could start the process of revoking their licenses to supply energy.

    Meanwhile, Ofgem has appointed E.ON Next to take on supplying Enstroga, Igloo Energy and Symbio Energy’s combined total of approximately 233,000 domestic customers after the suppliers exited the market.

    Ofgem has also launched two investigations into whether SSE Generation and EP SHB have each failed to comply with the Transmission Constraint Licence Condition. It said the opening of the investigation does not imply that it has made any findings about non-compliance. Read more

  • BEIS consults on re-coupling power trading with EU

    The Government is seeking views from the energy industry on a potential re-coupling of GB electricity auctions with the EU market.

    Before Brexit, Britain’s electricity market was part of the EU Internal Energy Market and power traded though Europe’s market coupling regime.

    The consultation from BEIS sets out a high-level approach for the coupling of specific daily day ahead auctions. It aims to seeking stakeholder views on whether to implement this, and if so how to do so in practice.

    “Stakeholder feedback and engagement will support us in assessing and developing our proposal further as well as highlighting other possible proposals which may be necessary in the wider wholesale market in the future,” BEIS said.

    The House of Lords European Union Committee heard evidence earlier this year that leaving the Internal Energy Market meant GB power exchanges no longer share order books to deliver a single day ahead price, leading to additional risk for market participants - especially renewable generators - and ultimately additional cost for customers.

    In a report on the impact of Brexit the committee said the UK government and Ofgem should consider taking mitigating actions if necessary including exploring options for recoupling GB’s two power exchanges while new day-ahead trading arrangements are being developed. Read more

  • Government contract bidders now need Net Zero credentials

    New measures have come into effect to ensure companies bidding for Government contracts worth over £5m a year have 2050 net zero strategies in place.

    The UK is the first country in the world to put such a condition in place and the Government said it hoped the move, ahead of COP26, would encourage other countries to follow suit.

    Andrew Griffith, UK Net Zero Business COP Champion, said: “The message to businesses is clear - engaging on net zero is no longer an option but a necessity, with businesses large and small now needing firm climate plans and commitments in place to supply major government contracts.

    “As we prepare to host the UN COP26 Summit this is exactly the type of leadership and collaboration required from government and business to show the world that we are serious about investing in a greener, more prosperous future.” Read more