Informer Issue 585 - 14/02/2023

Industry leaders are looking for “urgent progress” from the new dedicated government department focused on energy. Prime Minister, Rishi Sunak, split up the responsibilities of BEIS as part of a shake-up which saw the creation of the Department for Energy Security and Net Zero, led by Grant Shapps. The new department has been tasked with securing long-term energy supply, bringing down bills and ensuring progress towards Net Zero. “The move recognises the significant impact rising prices have had on households across the country as a result of Putin’s illegal war in Ukraine, and the need to secure more energy from domestic nuclear and renewable sources as we seize the opportunities of Net Zero,” said the Government. Energy UK's CEO, Emma Pinchbeck, said a dedicated energy department was welcome given the pivotal importance of energy. However, she said its significance depends on the progress it makes on the energy crisis and ensuring the UK maintains its position as a leader on Net Zero investment and infrastructure. “A secure, affordable energy system needs urgent action - from helping customers switch to low carbon heating and make their homes and businesses energy efficient, to tackling the affordability crisis as well as removing barriers resulting from the planning system and grid capacity,” she said. Joe Tetlow, Senior Political Advisor at thinktank Green Alliance, also said “any real progress towards the UK’s climate ambitions depended on strong financial support and co-operation across departments”. “It’s great to see Net Zero elevated to cabinet level representation. We hope Grant Shapps will get the proper backing from Treasury and powers to coordinate work across government.” Read more

Businesses are behind on climate action and underprepared for a wave of incoming regulation, according to a report. The CDP research also found that less than 1% of companies are demonstrating best practice on their climate transition plans. The organisation said although more than 4,000 businesses had a plan in place, only 81 are disclosing against all 21 key indicators that the organisation said denote a “credible” approach including board-level oversight. Six out of 1,448 UK based companies disclosed to all key indicators. Companies headquartered in Japan performed best with 16 organisations disclosing to all key indicators. The report said companies were “underprepared” for the wave of incoming regulation from the EU and bodies such as the UK Transition Plan Taskforce and Securities Exchange commissions. This lack of preparedness could open them up to multiple risks including litigation. Amir Sokolowski, Global Director, Climate at CDP, said: “The need for companies to develop a credible climate transition plan is not an additional element but an essential part of any future planning. Companies must evidence they are forward planning in order for us to avert the worst impacts of climate change and to send the correct signals to capital markets, that they will remain profitable.” Read more

Renewables and nuclear power will together dominate the growth of the world’s electricity supply over the next three years as demand for power rises, according to a new report. The International Energy Agency’s latest annual electricity market study also found that after slowing last year to 2%, the growth in world electricity demand is expected to accelerate to an average of 3% over the next three years. More than 70% of the increase in global electricity demand is expected to come from China, India and Southeast Asia. “The world’s growing demand for electricity is set to accelerate, adding more than double Japan’s current electricity consumption over the next three years,” said IEA Executive Director, Fatih Birol. “The good news is that renewables and nuclear power are growing quickly enough to meet almost all this additional appetite, suggesting we are close to a tipping point for power sector emissions. Governments now need to enable low-emissions sources to grow even faster and drive down emissions so that the world can ensure secure electricity supplies while reaching climate goals.” Read more

Deploying tidal power alongside other renewables such as wind and solar could significantly improve energy security and help communities achieve their clean energy ambitions, a new study has shown. Researchers found that installing tidal stream systems, in addition to other green energy sources, is around 25% more effective at balancing supply with demand than solely relying on solar and wind technologies. It can also reduce the space required for power-generating facilities by around 33% and significantly reduce their visual impact since much of their operation is below the sea’s surface. Researchers found that a model using 150MW of solar power, 150MW of offshore wind, and 120MW of tidal stream capacity maximises both supply-demand balancing, and the magnitude of maximum power surplus by 25% relative to the best performing solar and wind systems. Dr Danny Coles, Research Fellow at the University of Plymouth, who led the study, said: “Tidal stream energy provides a predictable, reliable source of renewable power that, if harnessed, can complement the variability of wind and solar. “Unlike wind and sun, the tides are present every day of the year. Our results show that adopting a combination of all three can reduce reliance on imported power and volatile prices.” Read more

Energy-intensive businesses are to share more than £12m in government funding to help cut their carbon emissions and energy costs. More than 20 projects in England, Wales and Northern Ireland will use the support to clean up their industrial processes and improve their energy efficiency. Sectors including pharmaceuticals, steel, paper, and food and drink have won the support from the Industrial Energy Transformation Fund (IETF), which has awarded grants to projects to increase the energy efficiency of their processes. The winning bids include sustainably harvesting food in Carmarthenshire, Wales, through a new air source heat pump system, capturing waste heat to dry, heat, crush and grind materials for roadmaking in South Yorkshire and using revolutionary high temperature heat pumps to reduce the energy needed to heat and cool cheese in dairy farms across the Midlands. It is estimated that industry is currently responsible for 16% of the UK’s emissions and will need to cut them by two thirds by 2035 in order for the UK to achieve its net zero target. Graham Stuart, Minister at the Department for Energy Security and Net Zero said: “Boosting the energy efficiency of industrial processes is a critical step not only in our transition to a lower-carbon economy, but also by helping businesses to cut their energy costs and protect valuable British jobs.” Read more

Ofgem has published its final determination report on the Energy Company Obligation Scheme 3 which ran from October 2018 to March 2022. The report provides details on overall scheme performance and energy suppliers’ achievement against their obligations. More details here.

The new Department for Energy Security and Net Zero has launched a consultation on the design elements of a low carbon hydrogen certification scheme. It closes on 28 April. More details here.

National Grid ESO is progressing several modifications to industry codes as part of work being done to enable competition in onshore energy networks. Grid Code Modification GC0159 ‘Introducing Competitively Appointed Transmission Owners to the Grid Code’ has now gone to workgroup consultation and is open until 15 February. More details here.

BEIS has opened a consultation on the annual tolerance levels that will apply to smart meter installation targets for energy suppliers in Great Britain in 2024 and 2025. The consultation closes on 21 March. More details here.