The Informer

This week's energy headlines: A surge in clean energy spending will see investment in solar eclipse oil; Transformation of the energy grid for Net Zero is in reach but requires a huge shift; The energy transition offers potential for levelling up but needs policy direction; Our industry round-up includes the latest updates from Government departments and energy regulators.

  • Clean investment surges with solar set to overtake oil

    Global investment in solar power is set to eclipse spending on oil production for the first time amid a surge in backing for clean energy. A new report from the International Energy Agency said investment in clean energy technologies is significantly outpacing spending on fossil fuels as affordability and security concerns triggered by the global energy crisis strengthen the momentum behind more sustainable options. About $2.8 trillion is set to be invested globally in energy in 2023, of which more than $1.7 trillion is expected to go to clean technologies. Annual clean energy investment is expected to rise by 24% between 2021 and 2023, driven by renewables and electric vehicles, compared with a 15% rise in fossil fuel investment over the same period. But more than 90% of this increase comes from advanced economies and China, presenting a serious risk of new dividing lines in global energy if clean energy transitions don’t pickup elsewhere it warned. “Clean energy is moving fast – faster than many people realise. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA Executive Director Fatih Birol. Read more

  • Energy grid transformation for Net Zero ‘within reach’

    The energy grid needs transforming on a scale not seen since the 1960s to enable Net Zero, according to a new report. However, the ambition is within reach if there is sufficient investment and a “smarter” approach from Government and regulators, the report by energy analysts Regen found.
    It said an upgraded grid will allow millions of homes to install heat pumps and EV chargers, and will unlock investment and business growth. Among the recommendations in a report by the firm is a call for Ofgem to ensure that networks can invest in capacity. “Ofgem must now help networks to unlock budgets so that the grid can receive the investment it needs, before consumers start to see problems with connections,” it said. Network companies will need to make significant investments to enable the grid to move away from expensive fossil generation and onto low-marginal cost renewables. The Regen analysis, which was commissioned by net zero charity MCS Charitable Foundation, provides a set of solutions to concerns raised about delays in connecting new renewable energy to the grid, with some timescales for connecting new projects to the transmission network over 15 years. David Cowdrey, of Net Zero charity MCS Charitable Foundation which commissioned the report, said: “The Government, regulator, and network operators must now urgently bring forward investment and reform planning policy to facilitate grid development.” Read more

  • Warning over ‘hands-off’ approach to Net Zero workforce

    The shift to Net Zero offers real levelling up potential for the UK, but government policy must support the growth of high-quality green jobs. The Climate Change Committee (CCC) said Net Zero will “materially transform” much of the economy. Some 250,000 jobs have already been created in the transition so far, but the CCC said the full opportunities will only be realised with stronger policies to harness the potential and manage the risks. “A hands-off approach to the Net Zero workforce from Government will not work,” it warned. The CCC said that the majority of UK workers will see no major impacts from the transition with the largest changes in sectors with a core role in the delivery of Net Zero. Two-thirds of these core workers are in sectors it said can grow over the transition, especially buildings construction and retrofit and electric battery manufacturing. Lord Deben, Chairman of the Climate Change Committee, said: “The UK has committed to Net Zero. The only question is whether the Government intends to get there in a way that benefits workers or leaves them behind. “This is a unique moment to tailor our approach to skills and jobs, in the certainty of achieving the legal goal. A Net Zero workforce means secure employment for the future. This is an opportunity for the Government to bring real meaning to ‘levelling up’.” Read more

  • Untapped solar potential of commercial buildings highlighted

    Installing panels on commercial buildings such as warehouses and car parks could help increase solar capacity by nearly fivefold by 2035, according to industry leaders. Already over a million UK homes already have solar panels fitted to their roofs but the first meeting of a new Solar Taskforce, led by Energy Minister Graham Stuart and Solar Energy UK chief executive Chris Hewett, highlighted the untapped potential of commercial buildings. The taskforce was established to drive the further growth of solar power as part of Powering Up Britain, identifying how the UK could meet its Net Zero commitments in an affordable and efficient manner. Hewett, who co-chairs the taskforce, said: “Installing rooftop solar power, whether at residential or commercial scale, is one of the best investments available, offering dramatic savings on energy bills and the opportunity to be paid for sending excess power to the grid. The benefits can also be greatly enhanced by adding a battery storage system.” The taskforce discussed plans to publish a solar roadmap in 2024 to drive forward the actions needed to deliver the UK’s ambition to increase solar capacity by nearly fivefold by 2035 and to upskill and expand the solar workforce to meet increasing levels of demand. Read more

  • Falling wholesale costs see price cap lowered

    Energy regulator Ofgem said it is encouraging that “prices are moving in the right direction” as it announced a steep fall in the energy price cap for domestic customers. From 1 July, the cap will be set at £2,074 for a typical dual fuel household, down from a peak of £4,279 which Ofgem reflects recent falls in wholesale energy prices. The regulator said for the first time since the global gas crisis took hold more than 18 months ago, prices are falling for customers on default tariffs. However, the price cap remains well above the pre-2021 average. Ofgem CEO Jonathan Brearley said: “After a difficult winter for consumers it is encouraging to see signs that the market is stabilising and prices are moving in the right direction. “However, we know people are still finding it hard, the cost-of-living crisis continues and these bills will still be troubling many people up and down the country. In the medium term, we’re unlikely to see prices return to the levels we saw before the energy crisis, and therefore we believe that it is imperative that government, Ofgem, consumer groups and the wider industry work together to support vulnerable groups. In particular, we will continue to work with government to look at all options.”
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  • Regulatory news and consultations round-up

    Ofgem is inviting comment on its proposal to end the temporary process for a Supplier of Last Resort (SoLR) to claim for a Last Resort Supply Payment. Comments need to be submitted by 6 July.

    The Department for Energy Security and Net Zero has published an open consultation calling for evidence on biomethane plants, and views of the biomethane market outlook for the annual review of Green Gas Support Scheme tariffs. The consultation closes on 5 June.

    The Department for Energy Security and Net Zero has extended the deadline for responses to a consultation on a recommended approach to community benefits for electricity transmission network infrastructure. The deadline is now 15 June.

    Ofgem has launched a policy review to speed up low-carbon energy schemes connecting to the electricity transmission grid. In an open letter to the energy sector it sets out potential options on short-, medium- and long-term reforms to make the connections regime fit for net zero transition.

    The deadline for the Department for Energy Security and Net Zero’s consultation on the revised energy National Policy Statements that support decisions on major energy infrastructure has been extended to 23 June.