The Informer

This week's energy news headlines: Ofgem proposes measures to better protect business energy customers; The system operator sets out its recommendations for grid connection reforms; Energy leaders warn over the impact of pledges made as COP28 draws to a close; Our industry round-up includes the latest updates from Government departments and energy regulators.

  • Greater protection for businesses under Ofgem plans

    Regulator Ofgem has set out a raft of proposed measures aimed at ensuring businesses get the highest standards of service from suppliers and get more clarity on the costs being paid to third party brokers.

    It has launched a consultation on the plans after “extensive engagement” with suppliers, companies and other groups who highlighted a number of issues.

    The proposals include a new set of rules for suppliers to make sure they improve customer service and clearly set out costs for customers.

    In addition, Ofgem is also seeking views on expanding suppliers’ complaint handling rules. It said the changes support the proposal set out by the Government to give small businesses with fewer than 50 employees the ability to take complaints about energy suppliers that they cannot resolve with them to the Energy Ombudsman.

    Tim Jarvis, Director of Markets for Ofgem, said: “Businesses are no different from any energy customer and should be able to expect excellent service and fair prices. However, we have heard from too many businesses, particularly small and medium sized ones, that this isn’t always the case.”

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  • ESO publishes grid connection reform proposals

    A new connections process with a mechanism to track project progression and hold developers to account is part of National Grid ESO’s final recommendation for connections reform.

    The system operator said its ‘First Ready, First Connected’ approach supports projects that can deliver at speed and ensures the connections queue is not bogged down by so called “zombie projects”.

    Under the proposals, it’ll implement a new connections process based on an early application window and two formal gates to track progress.

    The ESO will look to implement changes by the start of January 2025, subject to the delivery of relevant modifications to the existing industry codes.

    The ESO will also create a new Connections Process Advisory Group from January 2024 to enable industry to steer the detailed process design and code modifications within the parameters set out in its final recommendations.

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  • Warning over COP28 pledges

    New pledges made at the COP28 climate summit won't be enough on their own to keep within global warming limits, the International Energy Agency (IEA) has warned.

    So far, 130 countries have agreed to triple renewables and double the rate of energy efficiency improvements and 50 oil and gas companies have agreed to tackle methane emissions and routine flaring by 2030 under the Oil and Gas Decarbonisation Charter.

    The IEA said if all the commitments were delivered it would lower global-energy related greenhouse gas emissions by 4 billion metric tonnes of carbon dioxide equivalent in 2030. However it said that represents only about a third of the emissions gap that needs to be closed in the next six years to limit warming to 1.5C above preindustrial levels, as agreed to in the 2015 Paris Agreement.

    Earlier, the UN Secretary General warned the climate summit faces a “race against time” to reach an agreement on phasing fossil fuels out.

    Antonio Guterres said it was vital negotiators at the summit exercised flexibility as the summit in Dubai drew to a close. He warned there were still significant gaps holding up a meaningful agreement which would see nations pledge to phase-out fossil fuels.

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  • £900bn investment needed in UK energy for Net Zero

    More than £900 billion of investment could be needed in the UK’s energy supply to achieve Net Zero by 2050, according to a new report.

    The report by NatWest and Boston Consulting Group said the businesses could accelerate and deliver change by working together to test low-carbon solutions, building greater security and resilience into the energy system, and unlocking revenue in the UK.

    However, for the transition to be successful, it would be essential for banks and investors, regulators, policy makers, energy companies and supply chains to work together to overcome the challenges to mobilising this investment.

    Andy Gray, Managing Director of Commercial Mid-Market at NatWest Group, said: “The UK needs clean, stable and affordable energy supplies, but huge capital expenditure is needed to make this a reality. Mobilising the capital needed will be complex, and the findings serve as a clear call for all actors across the system to work together to find solutions.”

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  • Offshore wind round leasing round takes next steps

    Plans for some of the biggest floating wind farms in the world have been unveiled as The Crown Estate sets out further details of a new leasing round.

    Round Five is for three commercial-scale floating wind projects in the Celtic Sea off the coast of South Wales and South West England.

    The new wind farms will have a combined capacity of up to 4.5GW and are expected to be the first phase of commercial development in the region, with the UK Government confirming as part of its Autumn Statement in November 2023 its intention to unlock space for up to a further 12GW of capacity in the Celtic Sea.

    Dan Labbad, Chief Executive of The Crown Estate, said: “The UK’s offshore market is one of the most successful in the world and floating wind is the next chapter in this exciting story, backed up by recent support from UK Government to unlock further important capacity over the coming years.”

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  • Regulatory news and consultations round-up

    The Government is seeking views on a proposal to introduce a new threshold for bringing cases to the Energy Ombudsman to include small business consumers. It closes on 31 January 2024.

    The latest decisions on energy infrastructure development applications have been published by the Government.

    Ofgem has published details of the Renewables Obligation Late Payment Distribution for 2022 – 2023. From the redistribution of the late payment fund, suppliers have received an extra £0.07 per ROC, taking the final recycle value for 2022-23 to £6.88.

    Ofgem has launched a call for input to explore and assess current power market liquidity trends, issues, and concerns, following the suspension of the Market Making Obligation in 2019.

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