Informer Issue 561 - 16/08/2022

Energy intensive industries could see their costs reduced further under plans announced by the Government. A consultation has been launched to increase the level of exemption from some green levies from 85% of the costs up to 100%. The Government said the move reflects higher UK industrial electricity prices than those of other countries, which could hamper investment, competition and commercial viability for hundreds of businesses in industries including steel, paper, glass, ceramics, and cement, and risk them relocating from the UK. It said the proposal under the Energy Intensive Industries Exemption Scheme would help around 300 businesses supporting 60,000 jobs in the UK’s industrial heartlands. The scheme provides businesses with relief for the costs of renewable levies, including Contracts for Difference, the Renewable Obligation and Feed in Tariffs, in their energy bills. Business Secretary Kwasi Kwarteng said: “With global energy prices at record highs, it is essential we explore what more we can do to deliver a competitive future for those strategic industries so we can cut production costs and protect jobs across the UK.” Read more

Ofgem has opened a consultation over proposals to accelerate electricity transmission upgrades to enable significant growth in offshore wind in the years ahead. The Government’s Energy Security Strategy includes the connection of up to 50GW of offshore wind capacity by 2030, an increase from the previous 40GW target. The current onshore transmission network does not have the capacity to accommodate the substantial growth. Although 16 network upgrade projects are expected to be delivered before 2030, a further 10 projects need to be accelerated so that they are delivered by 2030. Ofgem said the consequences of failure to deliver all the required upgrades by 2030 are potentially significant with some of the expected renewable generation capacity unable to safely connect to the onshore network, while others that can connect unable to export their electricity due to system constraints. Measures being considered include providing earlier certainty on funding and reducing regulatory steps. Ofgem is seeking views on the proposals by 6 September. Read more

System operator National Grid ESO is exploring a Winter demand flexibility service, according to a new consultation. The ESO said the proposal would ensure greater participation of demand side response from electricity customers. “The Winter Demand Flexibility Product is a service which allows the ESO to access demand side flexibility that is not currently accessible in real time and expand our ability to control output from providers we cannot currently access through the Balancing Mechanism and the platform for ancillary services,” it said. The proposal is put forward in a consultation around requirements of Condition C16 of the Transmission Licence. The consultation document also highlights the system operator’s progress in securing additional capacity against the backdrop of current energy security challenges across Europe. The ESO has concluded agreements with some coal stations to remain open this winter and said it is “exploring other remaining options”. As part of this agreement these generators will be available for dispatch only by the ESO and not available to the open market,and will only operate following ESO instruction. The deadline for the consultation is 5 September. Meanwhile the ESO last week issued its third Capacity Market notice of the summer, although cancelled it later in the day. Read more

Energy Secretary Kwasi Kwarteng has hailed a £7bn deal to buy liquefied natural gas (LNG) from the US as an important step in boosting future energy security. Under the deal between Centrica and US firm Delfin Midstream, a million tonnes a year of LNG will be supplied over 15 years starting in 2026. The firms said the agreement also underpins the expansion of US LNG export capacity was an “increasingly important source of stable, reliable future gas supply”. Kwarteng said although the UK had ambitious plans for greater energy independence, it was also realistic about energy needs now and in the years ahead. “That means we need to secure more diverse and reliable sources of natural gas from friends, allies and strategic partners. This deal between Centrica and Delfin is positive news for the UK, helping to ensure our diversity of supply from reliable sources - like our friends in the United States - for many years to come." Read more

Offshore wind developers are being invited to put forward project proposals to reduce North Sea emissions and boost innovation. Under the Innovation and Targeted Oil and Gas (INTOG) offshore wind leasing process, developers can apply for the rights to build small-scale innovative offshore wind projects of less than 100 MW. Larger projects which will provide green electricity to oil and gas infrastructure to reduce their carbon emissions are also eligible.   Colin Palmer, Director of Marine for Crown Estate Scotland, said: ”INTOG represents an exciting opportunity to help decarbonise oil and gas installations and enable innovative projects which are important in lowering costs for the commercial deployment of offshore wind, reducing risk, and developing Scotland as a destination for innovation and technical expertise.” ”Platform electrification will reduce North Sea oil and gas emissions while also supporting new skills and jobs.”   Read more