Posted on: 03/10/2023
This week's energy news headlines: The system operator is predicting slightly higher margins on the grid this winter; Energy firms remain committed to Net Zero despite recent policy changes; UK households could be paid to turn down heating to bolster security of supply; Our industry round-up includes the latest updates from Government departments and energy regulators.
The system operator is predicting slightly higher margins for electricity supply and demand this winter.
National Grid ESO said the improvement reflected the fact that European gas storage and French nuclear power have greater availability than last year.
Under its central scenario in the latest Winter Outlook report it expects a de-rated margin of 4.4 GW or 7.4%, compared to last year’s 3.7GW and broadly in line with recent winters.
Head of National Control Craig Dyke said energy markets across Europe had responded after the challenges faced last winter and bolstered gas and electricity storage and supplies.
“While this is reflected in slightly higher operational margins for this winter, we and the rest of the energy industry will as always continue to prepare for a range of potential eventualities, so that we are fully prepared for any changes in circumstances this winter.”
The vast majority of energy businesses are keen to step-up decarbonisation efforts in the UK despite Government plans to delay some Net Zero measures.
A survey by the Association for Decentralised Energy (ADE), found that 89% of decentralised energy businesses were committed to pushing further on measures.
However, the poll also found that 75% reported their confidence had been damaged by announcements over delays announced by Prime Minister Rishi Sunak, Joanne Wade, chief strategic advisor at the ADE, said the delays jeopardise commitments to tackle climate change head-on but also undermine the UK’s economic prosperity.
“These delays not only risk destabilising our commitment to addressing climate change but will also lead to lost jobs and the erosion of business confidence in investing in the UK.”
UK households could be paid to turn down their heating this winter to help support security of supply.
National Gas is considering a scheme where households could volunteer to use less gas at peak times such as the early evening and potentially receive a discount on their bills.
A similar scheme for electricity was successfully trialled by National Grid ESO last winter.
A National Gas spokesperson said: "We are in the early stages of exploring whether a small-scale trial could look at the feasibility of the public turning their gas down slightly during times of reduced supply - voluntarily and in return for payment.”
"We are in a better position this year in terms of gas supplies, but it's important we look at a range of long-term options to bring down costs for consumers and balance supply and demand."
Rising development costs have led to the postponement of a major wind project.
Community Windpower said its Sanquhar II Wind Farm in Scotland, which would have been the UK’s fourth-largest onshore project with a capacity of 308MW, is now on hold.
It said estimated development expenses had risen from around £300m to £500m due to factors including inflation and higher interest rates.
Community Windpower has called on the UK government to consider several measures to improve the prospects for onshore wind, including an exemption from the windfall tax and the introduction of investment allowances.
Rod Wood, Managing Director at Community Windpower, stated: “We’ve run the financial models. We cannot get the return on capital that we need to cover the bank requirements for financing.”
Regulator Ofgem is launching an investigation into a business energy supplier.
The regulator said it will look at whether Lancashire-based BES which operates as BES Commercial Electricity Ltd and Business Energy Solutions Ltd is in compliance with rules that ensure deemed rates are not unduly onerous for customers.
A deemed contract normally applies if a customer moves into new business premises and uses energy but doesn’t have an agreed contract with a supplier.
Customers can also be on a deemed contract if their current contract ends but the supplier continues supplying energy that they use, if the original contract does not state what will happen at the end of a contract or does not have renewal provisions.
Ofgem said the opening of the investigation does not imply that it has made any findings about non-compliance.
Energy UK has published the fifth report of its Clean Growth Gap series in partnership with Oxford Economics. It looks at different measures the UK can take to attract the investment to maintain its world-leading role in clean energy.
The Department for Energy Security and Net Zero has published the latest statistics for energy consumption in the UK.
Elexon has named Peter Stanley as its new CEO following consultation with the BSC Panel. He joined the organisation in 2016 as a member of the Executive team and has been acting as interim CEO since August.
Ofgem has published its decision on the funding of the transition to a Future System Operator. It follows a consultation on proposals to allow National Grid and National Gas Transmission to recover efficient and economic costs incurred as part of their separation activities.
Ofgem has published the annual report for the Offtaker of Last Resort scheme.
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