The Department of Energy and Climate Change (Decc) and the Department of Environment, Food and Rural Affairs (Defra) have published new departmental plans, detailing the UK’s energy and environmental policy priorities from 2015-2020. The plans outline how Decc and Defra will spend their annual budgets, of £3.3 billion and £2 billion respectively in 2015/16. Decc said it will help the UK “deliver an energy infrastructure fit for the 21st century”, keeping bills “as low as possible for families and businesses” and pushing for ambitious international action on climate change “to safeguard our long-term economic and national security”. Specifically, Amber Rudd’s department will “ensure the UK has a secure and resilient energy system” by driving a “significant expansion of new nuclear”; considering new smart technologies such as energy storage and demand-side response; supporting fracking to supplement gas production from the North Sea; and doubling funding for energy innovation.
Utility Week 22nd Feb 2016 read more »
The new strategy contains few surprises, providing confirmation of many of the policies and consultations the department has launched or trailled since the election. For example, it confirms plans to bolster energy security by reviewing the Capacity Market to “ensure it provides the right investment incentives for new gas plants to be built in the UK”, supporting new interconnectors, delivering a “significant expansion” of new nuclear capacity, considering new smart technologies for energy storage and demand response, and supporting the “safe development of shale gas”. The document also defends the government’s recent decision to slash renewable energy subsidies and energy efficiency spending, arguing that the Levy Control Framework which caps spending on ‘green levies’ at £7.6bn by 2020 was on track to overshoot by £1.4bn.
Business Green 22nd Feb 2016 read more »
The public, media and politicians have not yet caught up with the fundamental changes going on in the UK energy sector, says Lawrence Slade, chief executive of industry group Energy UK. The UK needs a national conversation and narrative around these changes, effectively its own version of Germany’s “Energiewende” (energy transition), says Slade, speaking exclusively to Carbon Brief before publication today of an Energy UK report on pathways for the sector out to 2030. Today’s report, on pathways to 2030 for the UK electricity sector, was prepared for Energy UK by KPMG. It is based on interviews with 23 companies from across the UK energy industry on where the sector needs to be in 2030, and what needs to happen to get there. The report touches on almost every aspect of UK energy policy, from the coal phase out (the energy industry backs it) to the institutional structures of energy regulation and markets (they need to change). It looks at carbon budgets (the report assumes they must be met) and the squeeze on electricity generating capacity (it isn’t as bad as the government fears). A broader theme runs through the report, however: the energy sector is in a state of transformation. Energy firms sense a looming technology-led “revolution”, similar to those that have overtaken telecomms and banking, the report says. Asked which sources of electricity will be playing a larger role in 2030, their top pick is solar. Solar is expected to reach grid parity “in the next few years at residential level”, the report says. It adds: “Many [in the sector] believed…the combination of small-scale renewables and electricity storage could create a complete paradigm shift in how the power sector operates.” So, what might a UK Energiewende look like? It would probably be very different than Germany’s, not least given government support for new nuclear power. A more flexible energy system should be at its heart, Slade suggests. Today’s report sets out a vision for an energy system that is less reliant on baseload generation; one that is more flexible, more decentralised and much more consumer-oriented.
Carbon Brief 23rd Feb 2016 read more »
There are two changes which are fundamentally altering both practice and mind-set within electricity systems around the world. The first is the rapid take-up of variable power renewables within a few countries or states. Denmark, Germany, Portugal, Spain, California, and Hawaii all derive 25 to 43 per cent of their electricity generation from variable renewables sources (primarily wind and solar). The second change, building on the first, is a greater understanding of the value of flexibility for the secure operation of energy systems. This knowledge has transferred to other countries, even if they do not yet have high proportions of variable power. As I argued in a recent article for Nature Energy, the next six years through to 2022 will see the continuation of this accelerating trend; the shift worldwide towards renewable, energy-efficient and flexible electricity systems.
IGov 22nd Feb 2016 read more »
The government’s policy to promote shale gas as a bridge to a low carbon future is challenged by new research from the UK Energy Research Centre, published today. The future of natural gas in the UK concludes that gas has only a limited role as a ‘bridging fuel’. It looked at the place of gas in UK energy if we are to meet our mandatory climate targets. It found that without carbon capture and storage, the scope for gas use in 2050 would be little more than 10% of 2010 levels. In November 2015, the government scrapped a £1bn competition to develop commercial CCS. And in September, the Energy Secretary, Amber Rudd, said in a statement that access to natural gas “for years to come” was a key requirement if the UK was to “successfully transition in the longer term to a low-carbon economy.” She added: “The Government therefore consider that there is a clear need to seize the opportunity now to explore and test our shale potential.”
Drill or Drop 23rd Feb 2016 read more »
The use of natural gas for electricity generation in the UK may have to decline significantly over the next 30 years, according to a new study. Without carbon capture and storage (CCS) technology, gas-fired electricity would have to fall to 10% of the mix to meet emissions targets for 2050. The new study also warns that current government policies will deter investment in gas. The report has been published by the UK Energy Research Centre.
BBC 23rd Feb 2016 read more »
The world must reinvent the way it generates, purchases and distributes electricity if it is to win the fight against climate change, according to a major new report published last week by the International Energy Agency (IEA). The paper suggests that while the technology of electricity generation has undergone a massive revolution in recent years, the regulatory regime and market design of most electricity markets have not kept up with the pace of technological change. Electricity markets of the future will require a new framework to encourage low-carbon investments while maintaining security of supply, the IEA said. Changes to network investments, regulations, capacity markets, and integration processes are all required, although it admits there is no definitive answer to what the “perfect market design” will be in a low-carbon world. Instead, improvements to market design are likely to be evolutionary and reflect interactions between different technologies and market rules.
Business Green 22nd Feb 2016 read more »