Informer Issue 543 - 21/12/2021

Regulator Ofgem is to start carrying out financial stress tests on energy suppliers from January in a bid to improve resilience in the sector. The moves come in the wake of a series of collapses of suppliers in the market amid soaring gas prices. Ofgem said if weaknesses are found, it will agree an improvement plan for companies to address any concerns, particularly where consumers are at risk. It will also look at how best to tighten rules around the protection of credit balances and Renewables Obligation payments, and will consult on requiring suppliers to pause expansion until it is satisfied that they are financially resilient before they grow beyond certain milestones such as 50,000 customers. Jonathan Brearley, Chief Executive of Ofgem, said the stress testing for suppliers would mean they can’t pass “inappropriate risk” to consumers. “I want to see more checks on staff in significant roles, and better use of data to help us regulate. We need a regime that can enable a sustainable market, to promote our transition to net zero.” Read more

Support for renewables from the UK public continues to grow according to the latest survey by the UK Government. Some 87% of people in the UK now support renewables, according to the new figures from the Department for Business, Energy and Industrial Strategy (BEIS). This compares to the findings of the public attitudes tracker in 2020 when 80% of people supported renewables. The latest poll also shows a leap in the percentage of people aware of the concept of Net Zero, up significantly to 87%. RenewableUK’s Chief Executive Dan McGrail said: “This new poll underlines the fact that people want to see action against climate change scaled up and speeded up to get us to net zero as fast as possible. COP26 in Glasgow was a landmark event which raised public awareness throughout this year to an even higher level about the need to act swiftly and decisively. That means ramping up the rate at which we build wind farms onshore and offshore, as well as accelerating the deployment of innovative technology like tidal stream and green hydrogen. Read more

Less than a third of UK businesses have a strategy for reaching Net Zero despite growing environmental concerns, according to a new survey. The poll by YouGov on behalf of Veolia also found that 42% of businesses are feeling overwhelmed by the steps they need to take to reach this goal. However, larger firms were more proactive with more than half now having a strategy in place. Environmental concern was the biggest driver (72%) for businesses with a net zero strategy trying to meet their carbon targets, with reputation second (60%). Gavin Graveson, Senior Executive Vice President for Veolia Northern Europe, said: “We need to see more industries commit to a robust strategy to reduce their environmental impact, whether that be through use of electric vehicles, cleaner energy supplies or reduced packaging. “In the wake of COP26, we need to work together, share expertise, innovate and research new sustainable solutions so carbon net zero can become a reality, rather than a goal.” Read more

Two of EDF’s nuclear plants are to stop generating earlier than previously expected. The group said its Heysham 2 plant in Lancashire, and Torness, in East Lothian, Scotland are now expected to continue generating until 31 March 2028. In 2016, the sites’ operational lives were extended by seven years to 2030. Chief Nuclear Officer, Paul Morton, said: “Investment in the stations mean Heysham 2 and Torness are already operating beyond their expected 25-30 year generating lives and are two of the most productive of EDF’s fleet of nuclear power stations. “Since they first started making electricity in 1988, they have produced more than 550TWh of zero-carbon electricity.” EDF said the stations each employ around 500 staff and 250 contractors and have annual wage bills of around £40m a year, and as most people live locally that provides a boost to the local economies.” The company also confirmed that the expected end of generation date for Heysham 1 and Hartlepool will remain as 31 March 2024. Read more

Global coal power generation will hit a record this year underlining urgent need for policy action, according to the International Energy Agency (IEA). After falling in 2019 and 2020, global power generation from coal is expected to jump by 9% in 2021 to an all-time high of 10,350 terawatt-hours, according to the IEA’s Coal 2021 report. The agency said the rebound was being driven by rapid economic recovery, which has pushed up electricity demand much faster than low-carbon supplies can keep up. The steep rise in natural gas prices has also increased demand for coal power by making it more cost-competitive.
IEA Executive Director Fatih Birol said: “Coal is the single largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero. “Without strong and immediate actions by governments to tackle coal emissions – in a way that is fair, affordable and secure for those affected – we will have little chance, if any at all, of limiting global warming to 1.5 °C.” Read more