Informer Issue 622 - 31/10/2023

Industry leaders have welcomed the Energy Act 2023 becoming law as a milestone that will help transform the UK’s energy system.

The act gives regulator Ofgem new powers to reach Net Zero by unlocking investment, accelerating planning decisions, building new infrastructure and paving the way for innovation and technology. It also includes new consumer protections and frameworks.

Jonathan Brearley, Ofgem CEO, said the legislation represented a “world-first in giving us a legal mandate targeting Net Zero”.

“This will give us security from volatile world gas markets and end our dependency on fossil fuels, he said.

The Association for Renewable Energy and Clean Technology said the move would be a ”catalyst for much needed action”.

Emma Pinchbeck, Chief Executive of trade body Energy UK, said more work remains to establish frameworks that the new powers enable, “but this act will be the foundation upon which the new energy system will be built”.

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Ofgem has given the green light for National Grid ESO’s Demand Flexibility Service (DFS) this winter.

The service incentivises households and industrial and commercial users to voluntarily flex the time they use electricity to help manage the system this winter during periods where margins are tightest.

Last winter, the service successfully saved over 3,300MWh across 22 events, enough to power nearly 10 million homes.

The system operator said it was committed to developing the service even further this year with more consumers and businesses taking part.

Claire Dykta, Head of Markets at the ESO, said: “Creating more flexibility on our electricity system will be vital for running the clean, green and fair energy system of the future.

“Last winter’s service was a first of its kind for Great Britain, with millions of consumers and businesses actively participating in demand-side energy system flexibility at scale, and the response from industry and the public has been incredibly positive.”

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The UK Government’s 50GW offshore wind capacity target is on track to be missed according to new modelling.

Cornwall Insight forecasts offshore wind capacity will increase from 12.5GW in 2023-24 to 47.1GW in 2030, narrowly missing the Government’s 2030 goal.

The consultancy said delays in offshore wind deployment in the short to medium term have contributed to the missed target.

“These delays are largely attributed to rising costs, most recently reflected in the 5th Contract for Difference (CfD) auction round, which saw no offshore wind taking part, as well as the cancellation of one of the UK’s largest offshore wind farms Norfolk Boreas, with the developers saying it no longer made financial sense,” it said.

It warned slower progress will raise carbon emissions, cutting the chance of meeting carbon targets and ultimately extending the time it takes to reach Net Zero.

Despite the concerns, offshore wind is forecast to become the largest source of electricity in capacity terms by 2028, making up 26% of the GB generation capacity by the end of the decade.

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‘Phantom’ power projects are holding back the UK’s energy security and creating risk around hitting Net Zero, according to a new report.

It examined the UK’s existing queue for Transmission Entry Capacity (TEC) for connecting new projects to the transmission grid and found it is up to four times oversubscribed.

Analysis by energy group Centrica found that there are currently 371GW of projects in the queue, enough to significantly improve the UK’s energy security.

Although 114GW worth of projects have listed their connection date as before 2029, around 62GW of these projects are only in the scoping phase and developers may not even have secured land rights or applied for planning consent.

The report suggests that the oversubscribed queue, and longer wait for connections. has a damaging effect on the investments that could drive the UK’s energy transition and energy security.

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The Government has responded to concerns from its climate change advisor over decarbonisation progress.

In its annual progress report published in June the Climate Change Committee (CCC) urged the Government to “regroup” on Net Zero and commit to bolder delivery.

The CCC said although the Government has now published its Carbon Budget Delivery Plan providing much greater transparency on its Net Zero plans, its confidence in the UK meeting its goals from 2030 onwards is now “markedly less” than it was a year ago.

However, in its response the Government said it was acting on 85% of the CCC’s priority recommendations and on the majority of the remaining 273 recommendations “demonstrating our commitment to seizing the economic opportunities presented from the energy transition and net zero and the value of the CCC’s advice”.

It added that the UK has one of the most ambitious targets in the G20, cutting emissions by at least 68% by 2030 on 1990 levels.

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The Department for Energy Security and Net Zero has published the outcome of its consultation into a UK Low Carbon Hydrogen Certification Scheme. It confirms a commitment to launch a scheme from 2025 to aid the decarbonisation of the UK economy and support the ambition to reach Net Zero by 2050.

The Energy Act, which aims to transform the UK’s energy system by strengthening energy security, supporting the delivery of net zero and ensuring household bills are affordable in the long-term, has now received Royal Assent.

Scottish Renewables has set out five priorities for the Labour Party’s commitment in The Green Prosperity Plan to establish GB Energy, a publicly-owned clean energy generation company headquartered in Scotland.

The Department for Energy Security and Net Zero has published projections of energy demand , greenhouse gas emissions and electricity generation from 2022 to 2040.

Ofgem has published its decision on frameworks for future systems and network regulation.