Informer Issue 567 - 04/10/2022

The Government has launched an independent review of its 2050 Net Zero target to look at how it can be met while also maximising growth and minimising costs. Businesses are being urged to respond to a call for evidence to give their views on the transition to help shape innovative approaches and ways of delivering the target to maximise economic opportunities. The review is being chaired by former Energy Minister, Chris Skidmore MP, who was responsible for signing the original Net Zero legislation into force in 2019. Skidmore said everyone in the country has a stake in the UK’s transition to net zero. “I want to ensure that Net Zero isn’t just viewed as the right thing to do for our environment, but becomes an essential driver of economic growth – and a win-win for Britain and the world,” he said. The call for evidence is looking for input from businesses to include the barriers facing decarbonisation and the impacts Net Zero measures and decarbonisation have had on firms so far. Read more

Ofgem has said Britain could face a "gas supply emergency" this winter which could see large users cut off temporarily. The comment came in response to a request from generator SSE for the regulator to look at the impact of rules which meant gas-fired plants, which were forced to close, would face large penalties for failing to deliver electricity. In the letter Ofgem said: "Due to the war in Ukraine and gas shortages in Europe, there is a significant risk that gas shortages could occur during the winter 2022/23 in Great Britain. "As a result, there is a possibility that GB could enter into a gas supply emergency." Under such a scenario, gas-fired power plants and other major users might be cut off temporarily. SSE said its request for the rules to be modified proposes to limit potentially very high charges to generators caused by events outside their control. “There is broad industry agreement on the need to examine this issue, with the decision ultimately one for Ofgem,” it said. Ofgem said it would look at the issue of charges as a matter of urgency because it will have a "significant impact on the safety and security of the electricity system". Read more

A Labour government would set up a publicly-owned generation company to boost the country’s energy independence and cut bills. Party Leader Keir Starmer said Great British Energy would provide additional capacity, alongside the private sector, to establish the UK as a clean energy superpower and guarantee long term energy security. He told the party’s conference that a publicly-owned company was the “best way to ensure that the British people can derive the benefits from the power that we create on our own shores”. “This will enable strategic partnership between the private sector and government to deliver its plan for clean power,” he said. Starmer pointed out that many European countries have public generating companies, like EDF in France and Vattenfall in Sweden, which partner with the private sector to increase capacity and build clean energy at scale. He also outlined how Labour will deliver a zero carbon electricity system by 2030, slashing energy bills for good, creating thousands of good jobs, and making the UK energy independent. Read more

Britain has become a net exporter of electricity to Europe for the first time in over a decade. An independent report by academics from Imperial College London, for Drax Electric Insights, shows that, in the three months to June, 8% (5.5TWh) of the electricity generated by Britain was exported abroad. The excess was exported abroad through interconnectors and the report estimates the trade surplus was worth around £1.5 billion for the UK economy during the three months to June. Dr Iain Staffell of Imperial College London, said: “Britain has played an important role in helping to keep the lights on across Europe amid the deepening energy crisis which is being weaponised by Russia against our nearest neighbours. “With Europe now facing long-term security of supply problems, there could be an economic argument for Britain to step up investment in power production in the years ahead to build an even bigger trade surplus and protect our nation from damaging energy shortages.” Read more

Generator Uniper has agreed to keep a unit at its Nottinghamshire coal plant open over this winter to boost security of supply in the UK. The Ratcliffe-on-Soar facility had been due to close this Autumn, but, following discussions with National Grid ESO, it will continue to be available until 31st March 2023. Mike Lockett, Uniper UK Country Chairman, said: “Following a request from the government to keep our unit earmarked for closure in September 2022 open, I am pleased that we have reached an agreement to help bolster the UK’s supply security.” In August it was revealed that keeping coal-fired power plants open this winter could cost up to £420m. National Grid ESO said the upfront cost of the agreements to prolong the life of several plants are expected to be between £220m and £420m. The units will be available from 1 October until 31 March, with costs recovered through Balancing Services Use of System charges during the period. Read more

Ofgem is consulting on issuing final orders to two suppliers for over £1m in late Renewables Obligations payments. The suppliers are Delta Gas and Power, which is non-domestic, and Logicor Energy Limited which is a domestic supplier. More details here.

The regulator has also issued a consultation as it reviews the regulatory arrangements to be put in place for the Data Communications Company (DCC), following the expiry of the current licence in 2025. The Phase 1 consultation closes on 16 January. More details here.

BEIS has published details of the Renewables Obligation (RO) level calculations for 2023 to 2024, and the underpinning calculation methodology. More details here.

National Grid ESO has launched a new initiative to connect electricity generation to the transmission system faster. The Transmission Entry Capacity (TEC) register orders the queue for connections to the national electricity transmission network and includes all projects that seek a connection offer. More details here.

Elexon, which manages the Balancing Settlement Code (BSC), has published its response to the Government and Ofgem’s consultation on ownership of the company. It said it “strongly believes that industry ownership of Elexon is the right path” for it to be on so that it remains independent. More details here.