Posted on: 30/08/2022
This week's energy news headlines: The energy price crisis has highlighted the need for urgent acceleration of new renewable capacity according to an industry body; Solar planning refusal hits five-year high; and More help is urged for businesses to cope with rising bills and speed up decarbonisation.
The challenges posed by high energy prices has underlined the need for major expansion of renewable generation in the UK, according to an industry body.
RenewableUK said the soaring price of gas had led to unaffordable increases in household bills. As well as emergency support to help consumers, the organisation said the UK needs to switch to low-cost alternatives to gas “much faster”.
Chief Executive Dan McGrail said: “The latest round of renewable energy projects show that wind is the cheapest source of new power for the UK, generating home-grown electricity which is many times cheaper than the eye-watering cost of fossil fuels on the international market.
“So we need to get on with building bigger British clean energy projects faster to help ease the pain for consumers". Figures showed the latest round of CfD contracts for wind and solar projects would save £7 billion on electricity costs under recent wholesale price levels.
Analysis by the Energy and Climate Intelligence Unit found that the auction awarded contracts at prices that were a quarter that of gas power plants during the crisis, and on average lower even than the price of gas power before the crisis. Read more
The Government should step in and provide direct help for small businesses with energy bills, according to a lobby group. The Federation of Small Businesses (FSB) said support could be provided through the business rates system, accompanied by a discretionary pot of money to be issued by local authorities, or directly applied to energy bills.
FSB National Chair Martin McTague said: “Small businesses are left out in the cold when it comes to energy bills, with the vast majority excluded from the household energy price cap and other protections designed for domestic household consumers.
“Unlike large corporates, small firms cannot hedge costs and negotiate deals with their large energy suppliers. Many of our members say the eye-watering energy bills could be the final nail in the coffin as they struggle to get through winter.”
As well as financial support with bills, the FSB argues ‘Help to Green’ vouchers should be introduced, modelled on the Help to Grow Digital scheme.
Such a scheme could help businesses to decarbonise, with £5,000 vouchers that can be spent on environmental goods and services. “This would help businesses reduce their need to buy energy from the grid, lower bills, and improve our energy security,” said McTague.
“More widely, cost pressures could be eased through a reversal in the recent national insurance hike. Increasing the threshold of small business rates relief to £25,000 would take 200,000 businesses out the rates system and help reduce overhead costs.”
New analysis has shown that solar farms are being refused planning permission at the highest rate in five years. Figures compiled by planning consultancy Turley found that permission was turned down for 23 projects across England, Wales and Scotland between January 2021 and July this year.
The research, first reported in The Guardian, found only four projects were refused planning permission during 2017, 2018, 2019 and 2020.
Think-tank Green Alliance said the projects could have generated enough power for 147,000 homes a year and cut £100m off electricity bills.
Turley Associate Director Emma Kelly said: “Solar should be a key contributor to the energy market, especially as we look to diversify our renewable energy products to ensure maintenance of supply.
“The significant uplift in planning permission refusal for solar farms goes entirely against the proposals laid out in the Government’s British Energy Security Strategy.
“Solar power currently contributes 14GW of energy at present, so we have some way to go before reaching the 70GW target.” Earlier this month industry body Solar Energy UK hit back at claims by the candidates for PM that solar farms are a threat to food security. “One of the biggest risks to food security is our changing climate. Solar farms address climate change and so help prevent this, and are frequently used to graze livestock at the same time,” it said.
Energy bills for a typical household will rise to £3,549 a year on 1 October after Ofgem announced the latest price cap increase.
Industry leaders and consumer groups said the hike highlighted the need for longer term policy changes, alongside immediate financial help.
Jess Ralston, Senior Analyst at the Energy and Climate Intelligence Unit said: “The elephant in the room is the cost of gas and unless households are helped to use less by conserving heat with insulation, bills will remain high.
“The ECO insulation scheme has knocked £600 a year off the bills of millions of households even before this latest hike, but funding for it remains low. Shifting policy costs on to general taxation will provide only a little relief and more UK gas won’t drop the price as we’re part of an international market.”
Mark Sommerfeld, Head of Power and Flexibility at the Association for Renewable Energy and Clean Technology, said it was clear that “significant intervention is needed” including expansion of support through the Energy Bills Support Scheme.
But he said the Government must also not lose sight of the medium and long-term solutions to the crisis including market reforms to ensure consumers can benefit from low cost and secure renewable generation, helping to stabilise the energy market and lower bills for years to come.
“We can ill-afford any more lost time – the Government must come forward with a comprehensive plan, fast,” he said.
London Stansted has received planning permission to develop a 14.3MW solar farm to help make the airport’s energy supply more secure.
A consultation on the plans had been launched in December 2021 as the airport aims to power it's operations with renewable energy to meet it's increasing electricity demand and meet net zero by 2038.
London Stansted have said that all its buildings and airside vehicles are carbon neutral and they already source electricity from renewables.
“The development will see the airport generating its own renewable electricity on-site, connecting directly to our own private network, increasing the security of energy supply while at the same time freeing up renewable energy we currently purchase for others to use elsewhere on the grid." said Steve Griffiths, managing director of London Stansted.
“We will continue to explore new and innovative opportunities as they arise to ensure we deliver the airport’s future growth in the most sustainable and responsible way possible.” Read more
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