Informer Issue 559 - 02/08/2022

Renewable energy accounted for just under 40% of the UK’s power generation last year with capacity continuing to grow, according to new figures. The generation figure was the second highest on record according to the BEIS data, although slightly below that seen in 2020 due to weather conditions impacting on wind and solar generation. Fossil-fuelled generation accounted for 42.6% of total production during the year, according to BEIS’s Digest of UK Energy Statistics (DUKES). The data from BEIS also show renewable energy capacity continued to play a greater role in the energy mix, increasing 3.2% to 23.2GW, compared to an unchanged 42.5GW for fossil fuels and 8.1GW of nuclear capacity. Overall electricity demand increased slightly by 1.2% compared to 2020 mainly due to the lifting of Covid restrictions. Total net imports hit a record 24.6TWh in 2021 and interconnector capacity rose to 7.4 GW in 2021 with new operational cables between the UK and Norway and a second link to France coming into operation. Read more

This winter could see periods where electricity supply is tight and prices spike, but the system operator believes it will be able to meet demand. In an early forecast, National Grid ESO said it currently expects electricity demand to peak at 59.5GW this winter, in line with last year. Its base case for de-rated margin, which is a measure of the amount of excess capacity expected above peak electricity demand, is currently 4GW, or 6.7% of capacity. "While Britain is not reliant on Russian gas to the extent that the rest of Europe is, it is clear that the cessation of flows of gas into Europe could have knock-on impacts, including very high prices," it said. The tightest period for electricity demand and supply is likely to be in the first half of December. The ESO said a number of measures were being taken to prepare for winter including working with BEIS to delay the closure of five coal units. It is also looking at ways to incentives more demand response and working closely with transmission Owners to minimise the impact of network outages this winter. Read more

An £8m investment package has been announced for 18 projects aimed at accelerating decarbonisation and strengthening security of supply. The funding unveiled by Ofgem and Innovate UK is under the Strategic Innovation Fund (SIF) which initially provided backing for 40 projects. It has now awarded up to £500,000 for 18 of them to further develop their concepts. The projects include ones focused on large-scale storage, heat decarbonisation, data and digitalisation, whole system integration and the use of hydrogen in the energy system. Neil Kenward, Director for Strategy and Decarbonisation at Ofgem, said: “Innovation in energy is a vital part of the process of bringing down the cost for energy consumers, accelerating the decarbonisation of our energy system and reducing our dependence on costly imported fossil fuels, over time.” A further round of funding for new projects will be announced in the autumn. Read more

Current Conservative voters remain strongly in favour of the target of reaching Net Zero by 2050, according to a survey. Research carried out for think-tank Onward said the ditching or pausing the UK’s Net Zero targets would cost the next Conservative leader dearly at the ballot box. The survey reveals that voters’ support for Net Zero remains undimmed despite the Ukraine crisis and the rising cost of living. Net Zero remains the 4th most important issue for all voters, and the 5th most important for Conservatives – above crime, housing and Brexit. When asked if the new leader should keep or ditch the target, Conservative voters are a third more likely (51%) to say they should keep it than remove it (34%). Among undecided voters who would consider voting Tory, twice as many want the new leader to keep Net Zero (51% to 26%). Will Tanner, Director of Onward, said “If this leadership contest is about who can win an election, then both candidates could do much more to prove their commitment to Net Zero. Securing the UK’s energy supply through Net Zero is not just good policy, but good politics too.” Read more

The Government has been urged to take action over concerns that the energy price cap could double to over £3,800 in January. Forecasts suggest the cap will rise by 77% to £3,500 in October with a further increase expected at the beginning of next year. Consumer champion Martin Lewis said the rises would have a "frankly catastrophic" impact on consumers. "What we need is a willingness to take action and to grasp this, to make sure there are millions of people in this country who don't face the choice between starvation and freezing this winter, and it's looking like that is a realistic choice if nothing is done for many,” said the founder of Money Saving Expert. Meanwhile, the Government has announced how households will receive a £400 payment to help with energy bills. The money will be paid in six instalments through a discount on their bills between October and March. Read more