Informer Issue 566 - 27/09/2022

Business leaders have welcomed the Government’s energy costs relief package but warned support may be needed for longer than the initial six months of the scheme. Under the Energy Bill Relief Scheme (EBRS) for non-domestic customers, customers will benefit from what analysts at Cornwall Insight said represented a 45% discount to closing wholesale energy prices as at the end of last week. As with the Energy Price Guarantee for households, customers don’t need to take action or apply to the scheme to access the support which will automatically be applied to bills. Prime Minister Liz Truss said she understood the “huge pressure” businesses, charities and public sector organisations are facing with their energy bills. “We are taking immediate action to support them over the winter and protect jobs and livelihoods,” she said. Stephen Phipson of Make UK, which represents manufacturers, said the scheme is simple to understand and gives reassurance to businesses, but he warned that firms may need "support for a longer period if we are to protect jobs and remain competitive". Read more

A ban on fracking in England has been lifted three years after it was halted following concerns over tremors. Business and Energy Secretary Jacob Rees-Mogg said that in light of Russia’s invasion of Ukraine, strengthening energy security was an “absolute priority". The announcement came as the Government also published a new review from the British Geological Survey (BGS) into the practice. It concluded that although there has been some progress in identifying faults in shale rock which can lead to tremors, forecasting issues remains a problem. The Government is also to encourage more investment in onshore wind by ending planning restrictions that have prevented new projects in recent years. Meanwhile, a number of North Sea oil and gas schemes have been included in a list of infrastructure projects the UK Government is aiming to fast track. Read more

Regulator Ofgem has launched a consultation on proposed changes to the way balancing services use of system charges (BSUoS) are collected. Under the current system, the charges change every half-hour but modification CMP361 proposes to fix them at a certain level. The level would be set and published in advance, and would be in place for a fixed period of time. Ofgem said the chance would provide the system operator with a ringfenced reserve “fund” of money to allow them to better manage the cash flow impacts of setting a fixed charge for unpredictable balancing services costs. “We think given the pressures on suppliers and end users, it is appropriate for the ESO to use a risk-based approach to tariff setting that strikes the right balance between certainty of charges and minimising the amount of industry cash held,” it said. The changes would come into effect in April 2023. The consultation closes on 19 October. Read more

A group of more than 100 business leaders has urged the new Prime Minister to prioritise short and long term government delivery plans for net zero and nature restoration. Their letter came as the Government’s launched an independent review into the delivery of net zero climate commitments which it said would have a focus on ensuring the UK’s fight against climate change maximises economic growth, while increasing energy security and affordability for consumers and businesses. The letter, signed by CEOs from major companies including EDF, Triodos Bank, Cory Group, E.ON, Anglian Water, British Land, Amey, Salesforce, Arup and Nestle, maps out what is needed to improve energy security, shield the UK from volatile fossil fuels prices and enable the country to deliver its climate promises. “Acting now to accelerate the energy transition, could both support UK households with the cost of living and deliver huge economic benefits, unlocking opportunities for the UK to be a leader in clean growth,” the letter said. “At the same time, restoring nature through a comprehensive environmental improvement plan, a strong national adaptation plan, and setting ambitious long-term targets will help build the UK’s resilience and support the economy by reducing threats to food security and the economic and social damage of climate impacts.” The letter was coordinated by the UK Business Group Alliance for Net Zero led by the UK Corporate Leaders Group, and convened by the University of Cambridge Institute for Sustainability Leadership. Read more

Renewable energy capacity across the world is expected to grow by 8 per cent during 2022, according to new forecasts. The International Energy Agency (IEA)’s Breakthrough Agenda report said global renewable deployments are set to push through the 300GW mark for the first time. The report also said that sales of EVs doubled in 2021 to 6.6m. Despite the progress, the IEA said it was vital that governments work together to accelerate the transition. “We are in the midst of the first truly global energy crisis, with devastating knock-on consequences across the world economy, especially in developing countries. Only by speeding up the transition to clean sustainable energy can we achieve lasting energy security,’’ said Executive Director Fatih Birol. “Through international collaboration, we can make the transition quicker, cheaper and easier for everyone – on the back of faster innovation, greater economies of scale, bigger incentives to invest, level playing fields and benefits that are shared across all parts of society. Without this collaboration, the transition to net zero emissions will be much more challenging and could be delayed by decades.” Read more

In Policy news, BEIS has opened applications for Phase 2 of the Industrial Energy Transformation Fund which provides grant funding for feasibility and engineering studies, and for the deployment of industrial energy efficiency and deep decarbonisation projects. Applications close on Monday 10 October. More details here

BEIS has also announced that almost £50m in funding is being made available to help industries, including steel, ceramics, pharmaceuticals and food production, reduce their reliance on fossil fuels and slash energy costs. More details here

Ofgem has launched a consultation on proposed changes to the way balancing services use of system charges (BSUoS) are collected. More details here

The regulator has also issued a Call for Input on its approach to reflecting potential changes to BSUoS charges in the price cap. Comments are required by 3 October. More details here

An update on the number of ROCs presented to Ofgem by suppliers towards the total 2021/22 UK obligation has been published. Suppliers who did not meet their entire obligation through presenting ROCs will between them meet the shortfall through buy-out and late payments. More information here