Informer Issue 607 - 18/07/2023

Grid connection challenges are delaying the construction of hundreds of renewable projects which already have planning permission, according to new figures. The data from the Local Government Association (LGA) highlights that many solar and wind farms are waiting years to get underway. The LGA is calling on the Government to step up the pace in connecting energy schemes to the grid, and to provide councils with sufficient resources. The figures show a sharp increase in clean power schemes granted permission by councils in recent years, with the number doubling almost every year since 2018. The LGA said communities have said yes to over 1,300 renewable energy schemes that are waiting to be built. However, just 150 of these projects are currently under construction. Councillor Linda Taylor, environment spokesperson for the LGA, said: “It’s fantastic to see a rapid rise in planning permissions for green energy projects. “Councils want to play their full role but need the resources and powers for local energy plans to shape the grid investments so essential to a secure and sustainable future.” Read more

The UK needs to be more ambitious on green growth in the face of greater global competition for investment, according to the CBI. In a new report it warns the clock is ticking on making the most of the opportunities around sustainable growth. Developments such as the US Inflation Reduction Act have “changed the game” on global green investment and The EU Net Zero Industry Act is increasing the competition still further. “This means the UK can’t just address the issues “around the edges” of the green economy,” warned the business lobby group. “To be truly in the race, we need to get more strategic, more ambitious, and act with more agility.” Recommendations in the report include delivering a clear and stable policy environment to build business confidence and a comprehensive set of incentives to enable investment in the green economy. Read more

Continuing the UK’s dependence on gas could be as expensive as completing the transition to Net Zero, according to a new report. The Office for Budget Responsibility (OBR) also said that the additional debt interest costs and the impact on economic activity caused by recurring gas price spikes would add around 13 per cent of GDP to public debt by 2050-51 - twice as much as the estimate for the total cost of public investment of achieving Net Zero. In its latest annual report on UK fiscal risk and sustainability, the OBR warned that leaving the country exposed to rocketing wholesale gas prices was a major risk to the economy. It observed that despite “comparatively fast progress” in reducing carbon emissions over the past three decades, the UK is still one of the most gas-dependent European economies. Announced UK Government investments in green technologies are also behind the OBR’s central scenario for what could be needed to transition to net zero carbon emissions by 2050. It notes “little progress” has been made in replacing the over 20 million household gas boilers with carbon-neutral alternatives, which is critical to ending reliance on gas for domestic heating. Read more

Industry body Energy UK has voiced concerns over plans to exempt some energy intensive businesses from Capacity Market charges. The Government has announced the plans under the British Industry Supercharger to ensure the energy costs for key UK industries are in line with other major economies around the world. The support will be made available to sectors particularly exposed to the cost of electricity, such as steel, metals, chemicals and paper. These industries employ around 400,000 workers across the UK, and support many more in their supply chains. Although Energy UK said it agrees that strategically significant industries delivering economic benefits should be supported so that they are not put at a competitive disadvantage internationally, it has urged the Government to carry out an impact analysis before implementation. This would look at the impact the measure could have on other policy objectives such as security of supply and decarbonisation, avoid unintended consequences, and ensure any trade-offs are proportionate. Read more

Energy Secretary Grant Shapps has dampened hopes that hydrogen could be given a major role to play in heating UK homes. Shapps highlighted the challenges involved in producing large volumes of green hydrogen and distributing it to domestic properties. “There was a time when people thought you just have something that looks like a gas boiler and we’ll feed hydrogen into it,” he said. “The problem with that is the hydrogen molecules are very small. You have to replace potentially quite a lot of piping.” The Government is due to take a final decision on the use of hydrogen in home heating by 2026. But Shapps stressed he believed there was an important role for hydrogen in heavy industry and transport. “I’m a big believer in hydrogen as a part of our energy mix in the future,” he said. Read more

Ofgem has published its latest annual report and accounts for 2022/2023.

The Government has published its response to a consultation on considerations for future Contracts for Difference (CfD) rounds.

National Grid ESO has published its latest Future Energy Scenarios report, exploring different pathways to decarbonise the energy system.

Ofgem has published the latest timetable for expected publication of decisions around code modification/modification proposals.

Elexon has published the 2022/23 Balancing and Settlement Code (BSC) annual report which reveals it implemented 42 modifications and change proposals during 2022/23, the highest number of changes we have implemented in a single year since 2009.