The Informer

This week's energy news headlines: Steps to halve the time taken to build new grid infrastructure are recommended; The Government boosts this year’s CfD auctions but industry warns more help is needed; Fixed priced certificates could be introduced into the RO scheme; Our industry round-up includes the latest updates from Government departments and energy regulators.

  • Grid infrastructure build time could be halved

    Proposals including paying households that live near new large electricity pylons could help halve the time it takes to build the power infrastructure needed for decarbonisation. A government-commissioned report looking at how to speed up progress, written by energy industry veteran Nick Winser, said decarbonisation progress was being held back by the slow pace of new pylon projects. He believes a fast-track planning system is needed to help accelerate the current timescale of up to 14 years to build new lines. Energy Security Secretary Grant Shapps will now consider the recommendations and is expected to present a plan later this year. “While good progress has been made, we recognise that further action is needed. We will build on the momentum generated from this report and target specific priority areas for immediate focus,” Shapps said. Read more

  • CfD auction in £22m boost

    The budget for this year’s Contracts for Difference auction has been boosted by £22m in a move the Government said sends a “powerful signal” to the renewables industry. The additional backing takes the total available to £227m for this auction and will see an increased budget for established technologies such as solar and offshore wind from £170m to £190m and for emerging technologies such as floating offshore wind from £35m to £37m. Energy Security Secretary Grant Shapps said the funding boost would increase developer confidence in the sector and enhance the UK’s reputation as among the most attractive places to invest. RenewableUK's Executive Director of Policy Ana Musat welcomed the move but said the most important step Government could take would be to ensure sustainable pricing in future auctions, which take into account the difficult economic circumstances faced by the sector. “Setting artificially low prices will deter investment, reduce our pipeline and limit the UK’s ability to stay ahead in the global race for renewable energy capital, skills and supply chain investment,” she said. Read more

  • Government consults on heat network changes

    Businesses and households supplied by heat networks could benefit from fairer energy prices under new plans unveiled by Government. The proposals would see heat network customers receive greater consumer protections currently only afforded to those on traditional gas and electricity contracts. As well as inclusion in a potential future price cap on energy bills, customers would benefit from consistent standards for quality of service and supply of heat, backed up with regular and clear bills. From 2025, Ofgem will also be able to step in where homes and businesses have problems with disproportionate pricing, customer service and reliability. Lord Callanan, Minister for Energy Efficiency and Green Finance, said: “As more homes and businesses are connected to these innovative systems, it’s only right we ensure consumers are properly protected, pay a fair price for their energy, and are given the best service possible. “The consultation will contribute to the target of 20% of the country’s heating being supplied by heat networks by 2050.” Read more

  • Fixed price certificates could be part of RO scheme

    The Government has issued a call for evidence on introducing fixed price certificates into the Renewables Obligation (RO) schemes. Although the RO is closed to new applications, stations that accredited in the early years of the scheme will receive support until 2027 and later stations are supported for 20 years or until final closure of the scheme on 31 March 2037. The call outlines the case for transition to a Fixed Price Certificate (FPC) model in 2027 to provide cost and revenue certainty to stakeholders in the latter part of the scheme as price volatility is expected to emerge when generating stations start to retire from the scheme. It seeks views on potential models featuring a central payment and settlement counterparty, frequency and sequencing, pricing arrangements and when FPCs should be introduced. The consultation closes on 9 October. Read more

  • National security power sought in FSO creation

    The Government is proposing it will have a veto over the new Future System Operator (FSO) in certain limited circumstances related to national security. Moves are underway to create the FSO as an impartial body with responsibilities across both the electricity and gas systems, to drive progress towards net zero while maintaining energy security and minimising costs for consumers. Under a new consultation the Government is proposing a power for the Secretary of State to direct the FSO “where there is a risk relating to national security that may detrimentally impact the resilience, safety or security of the energy system, or the continuity of essential services”. For example, it might include directing the FSO not to grant commercial contracts with external parties for goods or services where they represent a risk relating to national security. Read more

  • Regulatory news and consultations round-up

    The Capacity Market prequalification submission window is now open. Participants can apply to bid for agreements to receive capacity payments based on the auction clearing price for the 2024/25 and 2027/28 delivery years by 5pm on 19 September.

    Ofgem has published details of the Renewables Obligation Quarter 4 Mutualisation Payment Distribution for 2020-21.

    The Department for Energy Security and Net Zero has published updates to the UK hydrogen strategy.

    The Department for Energy Security and Net Zero has published the latest report on levelised cost estimates for electricity generation technologies, detailing methodology, data and assumptions.

    National Grid ESO has launched a Code Administrator Consultation (CM089 & CM091) on Implementation of the Electricity System Restoration Standard & Implementation of Emergency and Restoration Code Phase II. It closes on 17 August.