The Informer

This week's energy news headlines: Bumper spending on renewable energy saw low carbon investment reach parity with fossil fuels last year; Power flows across GB’s five interconnectors hit their highest-ever level in January; Industry leaders call for a clear plan for green growth from the Chancellor; Our industry round-up includes the latest updates from Government departments and energy regulators.

  • Clean energy investment on brink of overtaking fossil fuels

    Global investment in the low-carbon energy transition hit record levels last year, according to new data. Research by BloombergNEF (BNEF) found spending reached $1.1 trillion as the energy crisis and policy action drove faster deployment. Investment in low-carbon projects also appears to have reached parity with capital deployed in support of fossil fuel supply. The Energy Transition Investment Trends report found that almost every sector achieved record levels of investment in 2022, including renewable energy, energy storage, carbon capture and storage (CCS), and hydrogen. Renewable energy, which includes wind, solar, biofuels and other renewables, remained the largest sector in investment terms, achieving a new record of $495 billion committed in 2022, up 17% from the previous year. Albert Cheung, Head of Global Analysis at BNEF, said: “Our findings put to bed any debate about how the energy crisis will impact clean energy deployment. “Rather than slowing down, energy transition investment has surged to a new record as countries and businesses continue to execute on transition plans. Investment in clean energy technologies is on the brink of overtaking fossil fuel investments, and won’t look back.” Read more

  • Record January for GB interconnectors

    National Grid’s five subsea interconnectors transported 2.6TWh of power to strengthen security of supply during January, the highest ever figure. The total figure for imports and exports was almost 12 per cent higher than the same period last year across the cables which connect GB with France, Belgium, the Netherlands and Norway, which have transported almost 12% more power than the same period last year, at an average of 91GWh per day. National Grid’s portfolio now totals 6.4GW, enough to power around six and a half million British homes. Managing Director of National Grid Interconnectors, Nicola Medalova, said: “We’ve seen this winter that interconnectors are supporting security of supply in both Britain and the EU by doing exactly what they were designed to do, move large volumes of power quickly to where it’s needed most. “Our interconnectors help to make Britain’s energy system more secure, enabling system operators to access electricity at the flick of a switch to respond to sudden changes in demand and supply. As we move toward a zero-carbon economy, the cooperation with our neighbours that we have seen this winter will be increasingly important, which is why it’s so wonderful to see such strong performance in a difficult period.” Read more

  • Clear plan for green growth urged by industry leaders

    Renewable industry leaders have called for a clear plan for green growth from Government in response to a speech from Chancellor Jeremy Hunt. Hunt said there were “great opportunities” in the sector and that there was a “massive queue” of investors keen to back renewables projects in the UK. “The UK is a world leader here, with the largest offshore wind farm in the world. Last year we were able to generate an incredible 40% of our electricity from renewables. But on one day, a rather windy December 30th, we actually got 60% of our electricity from renewables – mainly wind,” he pointed out. Hunt also referred to a report from McKinsey which estimates that the global market opportunity for UK green industries could be worth more than £1 trillion between now and 2030. In response, RenewableUK’s Executive Director of Policy, Ana Musat, said the Chancellor needs to provide businesses with clarity on how the UK will bring forward new renewable energy capacity, bolster clean energy supply chains and maximise investment in skills. “To create the economic optimism and momentum which the Chancellor is seeking, we need a clear plan focussing on green growth. Mr Hunt must ensure that the UK can complete on a level playing field with the US and the EU, both of which are offering generous stimulus packages to attract private finance from the innovative companies which are spearheading the clean energy transition,” she said. Read more

  • Coal units stood down for third time this winter

    The system operator stood down three coal units after a request from France for extra capacity was withdrawn. National Grid ESO issued a notification to warm the winter contingency coal units for potential use last week, the third time it has deployed the tool this winter. The move was in response to a request from the French system operator which was facing lower generation due to strike action at power plants. However, the system operator later stood down the units. A spokesperson for National Grid ESO said: “In support of mutual cooperation between Great Britain and its neighbouring electricity networks the ESO answered France’s request for additional GB generation to be able to provide assistance if required by warming the contingency coal units. Following further assessment of network margins in both countries the ESO has now stood down these coal units.” Meanwhile, hundreds of thousands of domestic customers cut their energy usage as part of the system operator’s latest demand flexibility trial. Octopus, one of a number of suppliers signed up to the scheme, said 400,000 of its customers received an average reward of £2.50 for reducing consumption between 4.30pm and 6pm. The latest trial last week came a day after a live event of the Demand Flexibility Scheme was staged for first time amid cold temperatures. National Grid ESO stressed that electricity supplies were not at risk and it was part of precautionary measures to maintain a buffer of spare capacity. There are more than 20 providers signed up to the service and tests are due to continue over the next few weeks. Read more

  • Corporate Net Zero progress under threat

    Business investment in decarbonisation could be under threat from financial pressures including rising inflation and interest rates, according to a new report. The paper from Cornwall Insight said the Government should consider regulation and policy changes if it wants to avoid a slowdown or stalling of spending on decarbonisation. Although the research found that Net Zero targets remain a priority for many businesses, it also said they are currently facing significant pressures as challenging economic conditions hit their finances. The report suggests a series of measures including energy efficiency awareness campaigns, levelling policy costs to incentivise process electrification, and harmonisation of levies applied to gas and electricity to help reduce energy costs. The report also outlines options available to businesses to progress decarbonisation including investing in on-site generation or setting up corporate power purchase agreements. However, it cautions that small and medium sized businesses may not be able to access all of the benefits of many of these strategies due to their scale. “While the will for decarbonisation remains very strong, unfortunately, investment capability may be compromised without action by policymakers,” it said. “Economic realities are taking their toll, and high energy bills and reduced government support are starting to hit some businesses’ financial standing. The picture varies by sector and business size. But where investment plans start to be reviewed under the shadow of challenging trading environments, we must wonder whether the decarbonisation of UK business will be one of the first victims as near term, and more existential pressures take precedence.” Read more

  • Regulatory news and consultations round-up

    BEIS is seeking views on a draft Appropriate Assessment of Likely Significant Effects Report for a review of consents for major energy infrastructure projects. The consultation closes on 14 February. More details here.

    Ofgem has published an open letter on market arrangements for Multi-Purpose Interconnectors. It outlines plans for engagement with stakeholders including formal consultation later in the year. More details here.

    Elexon is inviting comments on its Risk Operating Plan (ROP) for 2023/24. The ROP provides an overview of planned activities undertaken by the Performance Assurance Administrator. More details here.

    The system operator is hosting the ESO Virtual Energy System 2023 Conference at the Institute of Engineering and Technology in London on 10 February. The event will discuss digitalising energy across GB. To register visit here.