We may only be a month into the new year, but there’s already been lots happening in the energy industry, which means we’ve got plenty to update you on. Let’s get straight into it – here’s what you need to know…
Now that final figures have been calculated, it’s been revealed that the equivalent of 98.6% of gross electricity consumption in Scotland was provided by renewables in 2020, which is a significant achievement. While this meant Scotland fell just 1.4% short of its target of sourcing 100% by 2020, the country has made impressive progress since the goal was set in 2011, when renewable energy provided just 37% of national demand1.
As the UK commits to decarbonising its electricity system by 2035, Scotland’s latest progress should provide inspiration for the rest of the UK2.
There was also positive news from the gas industry this month, as the Energy Networks Association (ENA) announced that gas networks will be ready for hydrogen blending throughout the UK from 2023. As we transition to a net zero future, some businesses’ processes and equipment will continue to rely on gas, so it’s vital that the gas industry begins to decarbonise. By blending up to 20% hydrogen into the current network, the ENA aims to reduce the carbon emissions associated with gas supply without impacting customers. The ENA have also stated that this will not require customers to change their heating systems, so when trials expand to include more areas across the UK, consumers shouldn’t notice any difference in supply.
Elsewhere, Ofgem is implementing changes in order to protect the interests of domestic and business customers and strengthen the resilience of the energy market. Following the collapse of 29 energy suppliers in the last year3, all energy suppliers must now undergo financial stress testing to ensure that they are resilient enough to support customers for the long term.
Ian Brothwell, our Managing Director, said of the decision, “We understand the challenges that both customers and suppliers are currently facing and welcome this move to help the industry become more resilient. Businesses need a financially stable energy supplier that they can rely on to support them now and into the future, and we hope these measures will help achieve this.”
In recent weeks, Ofgem has granted network operator Electricity North West (ENW) £6.8 million in funding for an energy flexibility trading project called Bi-Trader. While ENW already calls on certain businesses to adjust their consumption to help ENW and National Grid to keep the system balanced, this new scheme will enable customers to trade flexibility between themselves. It’s estimated that Bi-Trader will deliver savings of around £35.5 million and, if the trial is extended to the rest of the UK, economic benefits could reach up to £581 million.
This will be the first time that real-time flexibility trading is carried out on a live distribution network, and it could open up new opportunities for businesses looking to benefit from flexibility in their energy usage. While Bi-Trader is only open to certain businesses in the north west, DNOs like SSEN are running similar flexibility trading trials, which means opportunities are arising for businesses across the UK. Any business that can adjust its consumption can provide the grid with much-needed flexibility – find out more in our demand flexibility blog.
Chris Curry, our Head of Flexibility, said of the project, “It’s great to see new schemes being trialled to enable businesses to unlock their flexibility and practice good grid citizenship – after all, flexible demand is crucial to decarbonising our energy system. According to the Carbon Trust, commercial users will need to provide 11GW of flexible demand in order to operate an efficient net zero electricity system by 20504. Existing demand flexibility schemes are limited in terms of the businesses that can participate and the benefits they can bring to those businesses, so it’s crucial that new schemes are developed to empower more businesses to get involved.”
In December, the government reopened the Climate Change Agreement (CCA) scheme to new entrants. This means that eligible businesses can benefit from a reduction in their Climate Change Levy (CCL), in exchange for making an agreement to reduce their energy usage and CO2 emissions. A business must carry out an ‘eligible process’ and operate within particular sectors (such as the aerospace, glass or plastics industries) to qualify for a CCA. Those that do can claim significant CCL relief of up to 92% for electricity and 83% for gas until the end of March 2025. If you think your business might be eligible for a CCA, you’ll need to act quickly, as the scheme will close again on 31st March 2022. Go to the government website to check your eligibility.
The Carbon Disclosure Project (CDP) and the Climate Group’s annual report, which tracks the progress of businesses in the RE100 initiative, found that 45% of their members’ collective electricity demand is currently met by renewables. As the RE100 has the same annual electricity demand as the UK’s, this represents a significant volume of electricity now being provided by renewables.
However, more work is needed to ensure companies can reach their renewable energy targets, as the report also revealed that just one-fifth of RE100 members are using 100% renewable electricity to power their operations5. The report also showed that in many countries, businesses are still struggling to access renewable electricity, despite growing corporate demand for it. Businesses from across the globe claimed that while they were striving to use renewable electricity, they faced barriers including limited access to renewable generation in their local area, limited procurement options when local generation is available, and a lack of national policy support.
Here’s what our Director of Sales and Marketing, David Taylor, thinks about this news, “At Bryt Energy, we’re passionate about providing as many British businesses as possible with zero carbon, 100% renewable electricity. We know that it’s not as easy for businesses in some other countries to access renewable electricity, and we hope to see renewable generation grow globally to address this issue. Our parent company, Statkraft, is making a significant contribution to the growth of renewables internationally, currently developing renewable energy projects in countries including Chile, India and Spain.”
GOOD NEWS FOR OUR GREEN FUTURE
With so many governments, businesses and individuals taking action on climate change, we saw some significant milestones reached in 2021 – including:
- A record year for smart meters. Over 2.4 million smart meters were installed in homes and businesses across the UK in 2021, an increase of 21% from 2020 (when 1.9 million smart meters were installed)5. If your business doesn’t yet have a smart meter installed, you can find out more about them, here.
- A surge in electric vehicle sales. Almost 191,000 electric vehicles (EVs) were sold across the country in 2021, increasing the number on UK roads by 76%. EVs now account for 11.6% of the total new car market7, which shows that we’re moving in the right direction when it comes to choosing low-carbon transport.
- The UK’s greenest Christmas. Power from fossil fuels on Britain’s electricity grid fell to record lows over the Christmas period, for example providing just 6% of supply at 23.45pm on 29th December 20218, with renewables generating 65% of the country’s electricity needs at that time. Grid carbon intensity remained low throughout the Christmas period – a great gift for the holidays!