Informer Issue 589 - 14/03/2023

The operating life of two nuclear power stations is set to be extended to help boost the UK’s energy security. EDF has confirmed that its Heysham 1 plant in Lancashire and its Hartlepool site in Teesside have seen their end of generation date pushed back from 2024 to March 2026. Both plants have been generating for 40 years and were originally expected to cease operations in 2014.EDF said the extension decision was made after a “rigorous review” of the technical and commercial cases. Matt Sykes, Managing Director of EDF’s Generation business, said the move would help support the UK’s energy security at a challenging time. “As well as helping the UK reduce its use of imported gas, it is also great news for the 2,000 skilled people whose jobs are supported by these sites and will help preserve valuable technical and operational skills that will be critical as the UK seeks to re-build its nuclear capability.” The additional 29TWh of electricity the stations could generate over the two-year period could help to displace 6bn cubic metres of gas, equivalent to taking 5m cars off the UK’s roads for a year. Last week two coal-fired power stations began supplying to the grid for the first time this winter under standby agreements to bolster security. Read more

Proposals for a major shake-up of the electricity market to improve security of supply and cut prices are to move to the next stage after the Government published a summary of responses to its initial consultation. The Government launched the Review of Electricity Market Arrangements (REMA) last year to pave the way for what could be the biggest reform of the market in a generation. Some 225 responses were received to the consultation from organisations including generators and developers, trade bodies, members of the public and academics. The Government now plans to publish a second consultation later this year. “We will take decisions on shorter-term reforms more quickly where it is viable to do so. Government will continue to engage with stakeholders throughout this period and will set out more detailed engagement plans in due course,” it said. Cornwall Energy said the responses received to the consultation showed the industry has expressed strong support for energy market reform that prioritises decarbonisation, security of supply, and cost-effectiveness. “While the publication of the long-awaited consultation summary may still leave many questions unanswered, it is a significant step forward in laying out the core objectives for the energy industry,” it said. Read more

The Government is “asleep at the wheel” in the push to achieve a zero-carbon electricity system by 2035, according to a report from its climate change advisor. The Climate Change Committee (CCC) warned the target could be missed altogether unless the current pace of infrastructure deployment is accelerated. It has set out a series of recommendations alongside the Government’s Energy Security Strategy commitments to renewables and nuclear including new low-carbon back-up generation, with hydrogen-based power stations and some continued use of fossil gas, made low-carbon through use of carbon capture and storage. It also wants to see smart shifting of consumer demand, to help to smooth peaks in demand and absorb excess supply, especially through controlled timing of electric vehicle charging and use of heat pumps. The CCC also says new storage solutions beyond the use of batteries are critical, including the use of surplus generation to produce hydrogen through electrolysis, providing long-term storage so it can later be used to generate electricity. Lord Deben, Chairman of the CCC, said: “The offer of cheap, decarbonised electricity for every consumer and business is now within reach, thanks to pioneering efforts to develop renewables. “We know how to do this, but Government is asleep at the wheel. Recent commitments for new nuclear and renewables are welcome, but these alone are insufficient. A rapid overhaul of the planning system and regulations is needed.” Read more

New grid connections for heat pumps and electric vehicle charging will place unprecedented demand on distribution networks in the years ahead, according to a new report. The report from Vattenfall also said indications suggest that the UK’s electricity demand will “almost certainly double and possibly triple” compared to 2020 figures to meet 2050 decarbonisation targets. “Businesses which can generate some, or all, of their electricity needs on-site will be in a strong position to capitalise on this increased demand,” it said. The report foresees a significant rise in applications for new and larger connections to a grid that “seems unlikely to be upgraded quickly enough by the Distribution Network Operators (DNOs)”. It points out that the primary objective of DNOs is to “protect and run their networks”. “This means that securing a new or upgraded grid connection can be slow because connecting electricity consumers is not the DNOs only task. Upgrading the high voltage and low voltage networks is work that DNOs will need to prioritise over new connections to their networks,” it added. Read more

Ofgem has rejected a proposal from National Grid ESO for a new service aimed at reducing system balancing costs. The balancing reserve service had been proposed to achieve savings by providing an incentive for plant selling in the wholesale market to also offer capacity to the ESO. Ofgem said it commended the ESO’s intent to take action to develop a service which could reduce balancing costs which would benefit consumers. However, it said the benefits were “outweighed significantly” by concerns related to the barriers to enter the balancing reserve market for small flexible providers and an insufficient deterrent to prevent non-delivery. Ofgem added that the rejection does not prevent the ESO from putting forward an updated design and alternative set of terms and conditions for a service with the same name. National Grid ESO said it believed its proposal provided a “fair and reasonable approach”. “We will now reflect on whether there are other interim options we can develop to deliver consumer value earlier while addressing the concerns Ofgem have raised in their decision letter.” Read more

The Department for Energy Security and Net Zero has published the outcome of a consultation into the review of electricity market arrangements.

Ofgem has opened a consultation on frameworks for future systems and network regulation. The closing date is 19 May.

Ofgem has published the deadlines for data submission for issuing ROCs, and the dates by which it intends to issue ROCs for the period April 2023 – March 2024.

The Department for Energy Security and Net Zero has published projections of energy demand, greenhouse gas emissions and electricity generation from 2021 to 2040.

The next trial BSC Upcoming Change Proposals meeting will be held on 23 March. The public meetings allow interested industry parties to feed in to change proposals that are likely to be raised in the near future.