Informer Issue 591 - 28/03/2023

Business leaders have reiterated calls for more help for firms as changes to energy bill support are set to come into force. The Energy Bills Relief Scheme (EBRS), which has provided help to non-domestic energy users, is about to be replaced by the Energy Bills Discount Scheme which will offer lower levels of support. The Federation of Small Businesses has warned that the reduction in support means many firms may need to restructure, reduce their operations or even close. From 1 April 2023 to 31 March 2024, all eligible non-domestic customers will see a unit discount of up to £19.61/MWh applied to their electricity bill and £6.97/MWh to their gas bill if wholesale prices go above thresholds of £302/MWh for electricity and £107/MWh for gas. A higher level of support will be provided to businesses in sectors identified as being the most energy intensive. The FSB has repeated calls for firms to get more support to make progress towards Net Zero against a backdrop of high prices through a ‘Help to Green’ scheme. The measure would offer a £5,000 voucher to invest in measures such as better insulation, solar panels, or a heat pump. The FSB said this would reduce small firms’ carbon footprints and their energy bills at the same time, giving a huge boost to the UK’s Net Zero journey. Read more

Faster progress is needed on planning to enable the huge increase needed in new transmission projects for Net Zero, according to a report. The National Infrastructure Commission’s latest annual progress review pointed out that decarbonising the electricity system will require over 17 transmission projects to receive development consents in the next four years, a fivefold increase on current rates. It urged the Government to publish updated National Policy Statements for energy, and increase capacity across the planning system. The report said the Government needs to maintain the strong pace of renewable deployment seen in recent years and bring forward firm plans to deliver the flexibility that a decarbonised system will need. It also called for a step up in the level of ambition on energy efficiency and increase in the pace of the transition to low carbon heat. The Commission will publish a review on how to accelerate the planning system for major infrastructure projects later this spring. This will be followed in the autumn by the second National Infrastructure Assessment setting out costed recommendations on infrastructure priorities for the next 30 years. Read more

The Government has been urged to develop a plan for integrating energy infrastructure to incorporate gas, electricity and hydrogen to enable balancing of intermittent renewable power generation. Capturing the significant wider system efficiency benefits has the potential to deliver up to £38bn cost savings according to the report by the UK’s first Hydrogen Champion Jane Toogood. The report also calls on ministers to provide a clear vision for investors on how and when hydrogen will scale-up beyond the first round of projects in the initial CCUS industrial clusters. Toogood said: “In order to get spades in the ground for the leading hydrogen projects before the end of next year, companies investing in hydrogen and its supply chain need clarity, certainty and confidence to invest capital. “Strong signals from the UK Government, demonstrating a long-term commitment to hydrogen, will unlock significant investment to underpin the UK’s hydrogen economy.” Read more

A report has warned that “alarm bells should be ringing” after figures showed global wind capacity additions fell by 15% in 2022. The slowdown, blamed on factors including the end of a subsidy scheme in China, follows two years of record activity according to the report by BloombergNEF (BNEF). A separate report from the Global Wind Energy Council highlighted an “urgent need” to ramp up investment in the wind supply chain to avoid bottlenecks for turbines and components from as soon as 2025. The BNEF report found developers brought 86GW of wind turbines online globally in 2022, with the bulk (89%) onshore. Offshore wind installations fell steeply, the year after a Chinese subsidy scheme expired, although the drop was partly offset by strong activity in the UK where over 3GW of offshore wind was commissioned for the first time. Cristian Dinca, wind analyst at BNEF said: “Governments around the world are increasing their ambition on decarbonization and, at the same time, new additions are slowing on the ground.” China’s Goldwind edged out Vestas to the top spot in the global wind turbine supplier ranking. The company supplied 12.7GW of projects last year, almost 90% of which were for its home market. Denmark-based Vestas commissioned 12.3GW overall in 2022, 3GW ahead of its US-based rival GE, which was in third place. Read more

Existing and planned fossil fuel projects are more than the climate can handle, according to the Intergovernmental Panel on Climate Change (IPCC). The IPCC’s latest report also warns investors that stranded fossil fuel assets will amount to $4 trillion in a world where warming is limited to 2°C, with the figure even higher with a limit of 1.5°C. It said “deep, rapid, and sustained” cuts are now needed to greenhouse gas emissions to avoid the worst effects of climate change. Energy UK’s Deputy Director, Adam Berman said the report is a “stark reminder” of what is at stake in the UK’s transition to Net Zero. “As the effects of climate change are increasingly felt around the world, the UK has a critical role to play in leading by example in economy-wide decarbonisation. Building on our successful rollout of low-carbon technologies such as offshore wind, the UK has incredible potential to create a truly low-carbon energy system that can bring down emissions and consumer bills. “But as the IPCC report notes, the world has to go further and faster, in efforts to reduce greenhouse gas emissions. For the UK, this will mean substantially improving on the delivery of our low carbon targets, which have been called into question by the deterioration of the investment climate for clean energy projects over recent months.” Read more

Ofgem and the Government have jointly published a response to the consultation on the future ownership of Elexon.

National Grid ESO has issued a call for input on its Demand Flexibility Service to understand how it can remove the barriers facing industry and develop opportunities to maximise the scheme’s potential.

The system operator has also published its latest System Operability Framework on Power Quality in the GB Transmission Network. The report discusses the main power quality aspects in the future GB transmission network.

The Department for Energy Security and Net Zero is seeking views on proposals for policy amendments to the Green Gas Support Scheme, as part of the mid-scheme review. The consultation closes on 18 May.