Posted on: 23/11/2021
This week's energy news headlines: A huge economic opportunity is on offer if businesses and Government work together on Net Zero says the CBI; Rolls-Royce is pressing ahead with plans for a fleet of mini-nuclear reactors; Energy supplier Bulb becomes the biggest casualty of high wholesale energy prices.
Net zero a ‘golden opportunity’ for UK to lead new industrial revolution
The shift to net zero represents a once in a generation opportunity for the UK to lead a new industrial revolution, according to business lobby group the CBI.
The organisation, which speaks on behalf of 190,000 businesses, said the country’s industrial heartlands were ideally placed to play a pivotal role in areas including hydrogen, offshore wind, carbon capture. electric vehicles and batteries.
Tony Danker, CBI Director-General, said it was a chance for parts of the UK to be world-leading again and was perfectly aligned with the Government’s levelling up agenda.
Speaking at the organisation’s annual conference he said businesses and policymakers would need to work closely together to reap the benefits.
“This might be a new line from the head of the CBI, but simply saying the market will fix this is not good enough. Governments don’t create jobs and wealth. Businesses do. But businesses alone don’t make places better. That’s on all of us,” he said.
“Instead of a branch-line economy – what we want is an economy of many hubs. That means using all parts of the country to their full potential. In a multi-hub economy, clean energy headquarters in the North East call up Edinburgh and London to arrange finance. And London companies like TfL call up Yorkshire, Ballymena and Falkirk for green buses.”.
In his address to the conference, Prime Minister Boris Johnson announced that all new homes and buildings in England are to have EV charging points from next year.
He also said the Government’s Net Zero strategy is expected to trigger about £90 billion of private sector investment, driving the creation of high wage, high skilled jobs.
Government backs mini-nuclear push with £210m
The Government is putting up £210m in funding to help support the next steps in developing the design of a fleet of new small nuclear power stations.
Rolls-Royce has established a new venture to take forward its Small Modular Reactors (SMR) design and take it through the regulatory processes to assess suitability of potential deployment in the UK.
The Government said new nuclear has a crucial role to play in providing reliable, affordable, low carbon energy as Britain works to reduce its dependency on volatile fossil fuels and exposure to global gas price spikes.
SMRs have the potential to be less expensive to build than traditional nuclear power plants because of their smaller size. Each one could be capable of powering 1 million homes – equivalent to a city the size of Leeds.
Business and Energy Secretary Kwasi Kwarteng said: “This is a once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before and ensure greater energy independence.
“Small modular reactors offer exciting opportunities to cut costs and build more quickly, ensuring we can bring clean electricity to people’s homes and cut our already-dwindling use of volatile fossil fuels even further.”
The Government funding is being matched by private investment including from BNF Resources UK and Exelon Generation.
Bulb Energy to enter special administration
Bulb Energy, the UK’s seventh largest energy company with 1.7 million customers, is being put into administration.
The firm is the latest supplier to hit difficulties amid soaring prices and will be the first energy firm to be placed into “special administration” where it will operate under the control of the Government and Ofgem while a longer-term solution is explored.
In a statement on its website, Bulb said wholesale prices “have skyrocketed and continue to be extremely volatile”.
“The gas supply shortage combined with lower exports from Russia and increased demand means they remain high and unpredictable.”
It said although the company had supported the idea of a price cap to protect customers, it pointed out the current price cap is set at a level “well below the cost of energy”.
The special administration process is designed to protect the customers of a large energy supplier that’s become insolvent.
Energy UK’s Chief Executive, Emma Pinchbeck said the news “underlines the huge difficulties facing energy retailers at present”.
“Record wholesale prices mean that suppliers are losing millions of pounds serving their customers right now and so, as well as Bulb planning to enter special administration, we cannot rule out well run, financially responsible companies exiting the market - in addition to those that have already left.
“Once through this period, the Government and Ofgem need to work with our industry to enable a sustainable retail market in future - one where suppliers are not just able to stay in business but can invest and innovate in order to support their customers through the changes Net Zero will involve.”
Battery storage set for 20-fold rise by 2030
Grid and domestic-scale battery storage is set for a 20-fold expansion this decade, according to new forecasts. Bloomberg NEF (BNEF) predicts global capacity could top 1TWh as an estimated $262bn of capital investment flows into the sector.
More than half of the new capacity would be based in the US and China, but the report also predict the UK, Germany, Australia, India and Japan will be major energy storage markets by the end of the decade.
More than half of the new capacity would be specifically developed to help shift away from fossil fuels and to renewables.
BNEF’s head of decentralised energy Yayoi Sekine, said: “This is the energy storage decade - we’ve been anticipating significant scale-up for many years and the industry is now more than ready to deliver.”
Rapid energy efficiency drive needed to achieve climate targets
Progress on energy efficiency has recovered to its pre-pandemic pace but much more rapid action is needed, according to the International Energy Agency (IEA).
In a report the IEA said total annual investment in energy efficiency worldwide needs to triple by 2030 to be on track for net zero.
The report comes shortly after the end of the COP26 Climate Change Conference in Glasgow, whose final statement specifically called for the rapid scaling up of energy efficiency measures, recognising their key role in decarbonising energy systems.
“We consider energy efficiency to be the ‘first fuel’ as it still represents the cleanest and, in most cases, the cheapest way to meet our energy needs. There is no plausible pathway to net zero emissions without using our energy resources much more efficiently,” said IEA Executive Director Fatih Birol.
“A step change in energy efficiency will give us a fighting chance of staving off the worst effects of climate change while creating millions of decent jobs and driving down energy bills.”