UK Government announces New Energy Bill
Consultation launched on climate transition plans
New strategic innovation fund available
Post-transition UK energy oversupply could create opportunities for flexible demand
In other news…
UK GOVERNMENT ANNOUNCES NEW ENERGY BILL
For the first time in more than a decade, the UK Government will introduce a new Energy Bill. Announced in the Queen’s Speech1last month, the Bill aims to help the UK build a more secure, homegrown energy system that is both ‘cleaner’ and more affordable. The ultimate aim is to end fossil-fuelled electricity generation by 2035, as announced by the Government last month as part of its Energy Security Strategy.
For businesses, some core elements of the Bill should help make their electricity costs lower in the long term. The government says the key part of the bill will include:
- Providing a more organised overview of electricity and gas networks with a new Future System Operator to drive the transition to net zero – which will ultimately help businesses better control energy costs.
- Help reduce the risk of fuel supply disruption by giving the Government the power to provide financial assistance to or require information from core fuel sector businesses.
- Bring in new business models for carbon capture usage and storage (CCUS).
- Britain’s first large-scale trial of heating with low-carbon hydrogen.
- Setting up a new market standard and a trading scheme for heat pumps, and appointing Ofgem as regulator for heat networks.
- Competition in onshore electricity networks to try and encourage investment and innovation by businesses.
- Creation of a new pro-innovation regulatory environment for fusion energy and a safe clean up of legacy nuclear sites.
- For residential consumers, an extension of the energy price cap.
While business leaders have largely welcomed the announcements, there’s a feeling the Government could go further to protect them from market volatility now and in the future2. There was also disappointment that ministers did not commit to funding for a retrofit strategy, to insulate buildings, which would lower emissions and energy bills.
Reacting to the announcement, Commercial Director of Bryt Energy, Sally Masters said: “We know businesses will be looking very closely at the Energy Bill this and other Government announcements to try and see how ministers are planning to provide help, throughout the current energy price crisis and beyond.
It’s important that a balance is found between increasing the UK’s energy independence and reducing costs, without losing sight of the UK’s net zero goal.
At Bryt Energy, we’re here to support businesses and help them understand what these policies mean for you; our team are on hand at firstname.lastname@example.org if you have any questions.”
CONSULTATION LAUNCHED ON CLIMATE TRANSITION PLANS
UK businesses have a unique chance to shape the future of net zero, with the launch of a consultation on the development of a “gold-standard” for climate transition plans.
Launched by HM Treasury, the recently unveiled Transition Plan Taskforce (TPT) is now asking businesses what key principles should be accounted for and included in the framework, which will be used to support corporate climate transition strategies.
The Taskforce’s ultimate aim is to set up a framework for corporate transition plans for companies across all sectors. As part of the consultation it hopes to discover whether firms believe plans should be aligned with the UK’s wider 2050 net zero target, feature shorter-term decarbonisation action plans, and enable periodic reporting.
The TPT’s Call for Evidence3 runs until July 13th, following which, the taskforce will develop the framework and aim to publish a draft for consultation by the end of year, ready for finalisation in early 2023.
If you’d like to respond on behalf of your business, use the feedback form at transitiontaskforce.net.
NEW STRATEGIC INNOVATION FUND AVAILABLE
With the UK’s net zero transition picking up pace, more initiatives are being launched that will enable businesses to further play their part.
One opportunity launched earlier last month is the second round of funding under Ofgem and Innovate UK’s Strategic Innovation Fund (SIF)4. It aims to support innovative projects that can help accelerate energy networks’ transition to net zero. The SIF opens for applications in early September and applicants must meet one of the four challenge areas, which are:
- Supporting a just energy transition – ideas that present new ways to identity and support vulnerable customers and help those who are disadvantaged.
- Preparing for a net zero power system – to help discover new ways to support older energy systems and use new energy sources.
- Improving energy system resilience and robustness – including ways to develop multi-energy systems and strengthen system robustness.
- Accelerating decarbonisation of major energy demands – innovators could help manage large-scale demands from heat or transport or improve the energy efficiency of demanding systems.
An initial discovery phase will enable innovators to apply for £150,000 to develop their ideas, then projects deemed to have the greatest potential will be awarded up to £500,000 for further development. More funding will then be available for successful projects.
You can learn more about the SIF here.
POST-TRANSITION UK ENERGY OVERSUPPLY COULD CREATE OPPORTUNITIES FOR FLEXIBLE DEMAND
Achieving new energy targets set out in the UK Government’s recently released Energy Strategy could create 72TWh of excess renewable and nuclear energy by 2030 – creating valuable opportunities for flexible demand which can utilise this excess power.
According to research from LCP5, this expected excess demand is equivalent to almost 25% of current demand. Using all of this excess would require 50GW of demand-side flexibility from energy storage, such as batteries, electrolysers and interconnectors to enable exporting. Accelerating the growth in demand-side flexibility would have benefits such as reducing the costs of balancing the grid and helping to mitigate some of the decreasing revenues available for renewable generators to reduce subsidies.
To learn more, click here.
IN OTHER NEWS…
- The International Energy Association (IEA) is predicting another bumper year for renewables. It comes after the world added a record 295 gigawatts of new renewable power capacity in 2021, a figure which is set to grow further in 2022. But the body warned that stronger policies would be required from world governments to keep the momentum up beyond this year6.
- With the Government aiming to make the UK “the world’s leading green economy”, the first meeting of the Green Jobs Delivery Group took place last month. The group will support the delivery of up to 480,000 skilled ‘green’ jobs by 2030. According to Government data, more than 68,000 green jobs have already been created or are in the pipeline since the Prime Minister’s Ten Point Plan in November 2020. These include EV manufacturing in Sunderland, new hydrogen facilities in Teesside, and offshore wind in Yorkshire and Humber7.
- The government has appointed the UK’s first Offshore Wind Champion, Tim Pick, who will spearhead work to accelerate new offshore wind projects around the UK8. New initiatives include the Floating Offshore Wind Manufacturing Scheme, which will provide £160 million in government funding to boost capacity around the UK. The emerging sector already has two operational projects, including the Kincardine site in Scotland – the world’s largest floating wind farm – the electricity from which is supplied to our parent company, Statkraft, under a long term Power Purchase Agreement (PPA).