The Informer

This week's energy news headlines: Ofgem signals support for a £3.4bn power link; The Government says the UK is now halfway to its Net Zero goal; Domestic energy prices could change depending on the time of day under proposals. Our industry round-up includes the latest updates from Government departments and energy regulators.

  • Electricity superhighway secures £3.4bn boost

    An electricity superhighway between Scotland and Yorkshire which could power up to 2 million homes has secured a provisional funding package of £3.4bn.

    The Eastern Green Link 2 (EGL2) - a proposed 2GW high voltage electricity cable link between Peterhead in Aberdeenshire and Drax in North Yorkshire – comes under Ofgem’s new fast track Accelerated Strategic Transmission Investment (ASTI) framework.

    Most of the 500km cable will be under the North Sea with the remaining 70km buried underground onshore.

    The project is designed to help harness the potential of Britain’s offshore wind power. Last month the first ASTI project, Eastern Green Link 1 which is another subsea link between England and Scotland, received a provisional £2bn funding package.

    The EGL2 project will be financed by the developers with costs later recouped through bills.

    Rebecca Barnett, Ofgem Director of Major Projects, said: “To ensure we meet future energy demand and achieve Government net zero targets we must speed up the expansion of the high voltage electricity network which connects consumers to homegrown energy.”

    The proposed budget for the link is now subject to a consultation. 

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  • UK hits halfway point on Net Zero journey

    The UK’s emissions have fallen by more than half between 1990 and 2023 as it continues to make progress towards Net Zero, according to new figures.

    The Government said last year’s 5% reduction meant the UK had passed the halfway point in cutting emissions.

    The electricity supply sector saw a drop in emissions of 19.6%, homes had a fall of 7.2%, and industry had an 8% drop.

    Energy Security Secretary Claire Coutinho said: “This latest drop in our emissions follows the UK’s achievement in becoming the first major economy to halve its polluting carbon emissions.

    “We have done all this whilst growing our economy by 80%, and shielding families from unnecessary costs.”

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  • Consultation launched on price cap changes

    Consumers could pay different prices for their energy depending on the time of day under potential changes to the price cap mechanism.

    Ofgem has launched a consultation on the future of the policy which it said aimed to ensure customers “remain protected as the energy market evolves to a smarter, more flexible system”.

    It said the price cap has worked well to protect customers but that energy retail markets are changing as increasing numbers of consumers change their energy consumption and begin using electric vehicles, heat pumps, and solar panels.

    “Our increasingly renewables-dominated electricity sector will also reward consumers for shifting the time of their electricity consumption, which will in turn reduce costs for everyone,” it said.

    “As customer diversity grows, and more households adopt time-of-use tariffs, it could become harder to retain a universal price cap that is suitable for everyone.”

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  • UK retains global renewables ranking

    Despite a fall in new capacity growth last year, the UK has maintained its ranking as the second largest market for new offshore wind.

    Figures from Bloomberg New Energy Finance (BNEF) show global wind capacity additions surged to a record high of 118GW in 2023.

    Developers commissioned 36% more capacity worldwide than in 2022 after capacity additions skyrocketed in the world’s largest market, China. Some 107GW, or 90%, of global wind additions were on land while 11GW was offshore.

    “The boom in China last year hides a worrying trend, as new additions elsewhere were just 8% higher than in 2022” said Oliver Metcalfe, head of wind research at BloombergNEF.

    “There are signs that growth will accelerate, though. A surge in US turbine orders shows the early impact of the new subsidies in the country’s Inflation Reduction Act, while a boom in project approvals in countries like Germany suggests that Europe’s permitting reform is working.”

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  • Sale secures future of major offshore wind development

    A £963m deal has ensured the continued development of one of the largest offshore wind developments in the UK.

    Swedish energy group Vattenfall has completed the sale of the Norfolk Offshore Wind Zone to RWE. The zone, which comprises three fully consented wind farms Norfolk Boreas, Norfolk Vanguard West and Norfolk Vanguard East, will be one of the largest offshore wind developments in the world capable of producing power for over four million homes across the UK.

    Vattenfall said it remained committed to the UK with projects including 1.1GW installed offshore and onshore wind capacity as well as heat networks under construction in three major UK cities.

    The two companies agreed the transaction in December.

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