Informer Issue 602 - 13/06/2023

A move to legally oblige Ofgem to support the push for Net Zero should unlock billions of pounds worth of investment according to industry leaders. The amendment to the Energy Bill restates Ofgem’s principal objective to protect the interests of existing and future gas and electricity consumers. It will add a specific duty to do so by supporting the Government meet its legal obligation to get to Net Zero by 2050, as required by the Climate Change Act 2008. Ofgem CEO Jonathan Brearley, who welcomed the move, said: “We’re clear consumers are best protected by building a low-carbon, low-cost energy system, scaling up long-term investment and stabilising prices with clean energy. “The mandate sends a clear message we must end our historic dependency on fossil fuels and stop our exposure to volatile global markets.” RenewableUK’s Director of Future Electricity Systems, Barnaby Wharton, said it would help tackle the “glacial pace” at which grid is approved and built. “Some offshore wind projects are having to wait for more than ten years to get a grid connection. This measure will help to unlock at least £15 billion of investment in offshore wind alone between now and the end of the decade,” he said. Read more

Almost £40bn was spent by the UK Government to support households and businesses during the energy cost crisis over winter, new figures show. The £39.3bn was spent between October 2022 and March 2023, the most ever provided to subsidise household bills in UK history. The figure was in part funded through taxing energy producers’ excess profits - with the government’s windfall tax on producers expected to raise almost £26bn by March 2028. The UK has now seen a full year without using Russian gas, while accelerating the move towards renewables and alternative sources of supply such as liquefied natural gas imports. Chancellor of the Exchequer Jeremy Hunt said the figures “demonstrate the historic scale and nature of the schemes put in place to support households”. Read more

Slow progress on rolling out heat pumps in the UK will have a major impact on UK foreign gas dependence, according to a new report. The Energy and Climate Intelligence Unit (ECIU) said the UK could end up buying an additional 200TWh of foreign gas between 2024 and 2035. The cost of these extra gas imports for heating could reach over £9bn, according to current predictions that show gas prices will remain at 2-3 times pre-energy crisis levels for the rest of the decade. Jess Ralston, Energy Analyst at the ECIU said the Government faces a choice of continuing to subsidise oil and gas and leave households exposed to volatile gas prices, or direct investment through bold policy into renewables instead. “Electric heat pumps sales are booming in Europe and the US, who are dubbing them ‘freedom pumps’ in the light of Russia’s interference in the international gas market,” she said. “Households with ‘hydrogen ready’ gas boilers are at risk of being left with a stranded asset as hydrogen may never be pumped into the grid at scale. Every heat pump we install means less gas needs to be bought from places like Qatar, with the income going to renewables on British soil or seabed instead.” Read more

A reset of the planning system across England is needed to build a net zero world, according to a new report. The Institute for Public Policy Research (IPPR) found that under the current rate of development it would take 4,700 years for England to reach the onshore wind capacity called for by government advisers. The IPPR said progress in England was stalled in 2015 when planning laws were changed to make it more difficult to gain permission for new onshore wind turbines – in what was effectively a ban. Since then it said only 17 new onshore wind farms have been approved, generating just 6.7 megawatts of power - equivalent to just 0.02 per cent of the on-shore total needed in England based on National Grid estimates. The IPPR report calls for restrictions on onshore wind and solar power to be reduced and for local authorities to be compelled to identify land suitable for onshore wind and solar generation. It argues that local authorities should be compelled to draw up detailed plans for development in their areas that integrate environmental targets, to provide greater certainty. Luke Murphy, IPPR associate director for energy, climate, housing, and infrastructure, said: “The current planning system in England is not remotely fit for purpose to build a net zero world, restore nature, or meet housing need. At current build rates, we’re as far from delivering the onshore wind we need for energy security as we are from the start of construction of Stonehenge in 2,500 BC. “ The energy industry is increasing its investment in cyber security but significant gaps remain, according to a new report. Six out of ten energy professionals surveyed by DNV said their organisation is boosting spending amid growing geopolitical tensions. However, they warn that budgets are still too low to safeguard safety-critical systems. Two thirds (64%) believe that their organisation’s infrastructure is now more vulnerable to cyber threats than ever. Ditlev Engel, CEO, Energy Systems at DNV, said cyber security in the industry is critical for acceleration of the energy transition. Read more

The energy industry is increasing its investment in cyber security but significant gaps remain, according to a new report. Six out of ten energy professionals surveyed by DNV said their organisation is boosting spending amid growing geopolitical tensions. However, they warn that budgets are still too low to safeguard safety-critical systems. Two thirds (64%) believe that their organisation’s infrastructure is now more vulnerable to cyber threats than ever. Ditlev Engel, CEO, Energy Systems at DNV, said cyber security in the industry is critical for acceleration of the energy transition. “Safety and security are enablers of the clean energy technologies that need to be deployed and operated at scale in the coming decades.” Read more

Energy UK has published its response to the ESO’s Call for Input on Balancing Reserve The Department for Energy Security and Net Zero has published guidance on how to apply to the Green Heat Network Fund (GHNF) which offers capital grant support for the development of new and existing low and zero-carbon heat networks. Ofgem has issued a notice of a proposed penalty on SSE Generation Limited in relation to a breach of its obligations under the electricity generation licence. Ofgem has published a consultation on Future System Operator supply and demand modelling. It closes on 23 June. 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.