Bryt Insight April 2022
As we move towards a net zero future, there are a range of different factors that will influence our journey - and the more you know about them the better informed your energy and sustainability strategy will be. We want to ensure that you’re aware of any new opportunities that emerging technologies could offer, the Government policies and industry developments that could impact your organisation, and the effect that transitioning to a net zero energy system could have on your energy prices.
Here’s what you need to know...
The UK lost 2GW of grid capacity on 15th September, after a fire at National Grid’s IFA1 interconnector, which provides an important power link between France and Britain.
The outage came at a particularly difficult time, as the margin between electricity supply and demand was already tight due to a number of factors. This summer has been one of the least windy UK summers on record, which has reduced wind power generation. As it’s not been particularly sunny either, solar generation has also lowered, so we’ve had much less renewable generation than we would normally expect at this time of year. In addition, some power stations that usually provide capacity are currently offline, due to planned maintenance and servicing.
As a result, the UK has had to rely more heavily on gas and coal-fired power stations to make up the shortfall. However, a global shortage of Liquid Natural Gas (LNG) and historically low levels of gas in storage ahead of winter has caused gas prices to soar and the UK to rely on expensive imports. This pushed day-ahead electricity prices to record highs of £2,500 per MWh, compared to averages of £50 per MWh this time last year.
We know that many businesses will be concerned about rising prices as we move into the winter months, but there can still be real rewards available to businesses with demand flexibility; consumers can be paid for supporting the system in times of need, by shifting their usage away from the expensive periods. For example, we recently sold some of our customers’ energy back to the grid at peak auction price - which meant they generated revenue while also directly supporting the system. To find out more about the opportunities for businesses, read our blog.
Looking more broadly at the industry, there have been some innovative developments to help reduce the likelihood of power cuts, as UK Power Networks (UKPN) began a trial of the UK’s first ‘early warning system’ this month. They are trialling Smart Cable Guards - devices that fit onto underground power cables and can detect the tiniest of electrical disturbances - at 20 sites across the South-East. When they detect a disturbance, these devices alert engineers to where a potential problem could occur to within a few metres of cable, so engineers can resolve the issue before a power cut occurs.
We can expect to see more pioneering solutions like this in future as Ofgem recently announced a £450 million fund to help unlock innovation in energy networks. The Strategic Innovation Fund will target four key strategic challenges in our transition to a cleaner energy future: whole system integration, data and digitalisation, heat, and transport. Funding could therefore be awarded to a wide range of projects, from holistic solutions for the gas and electricity networks to flexible solutions, like battery storage. If your business has a project that you think may qualify for funding, you can find out more here.
At Bryt Energy, we’re pioneering by nature, so we’re really excited to see funding for new innovations that could accelerate the UK’s transition to net zero.
The Government has recently extended the eligibility criteria for the Workplace Charging Scheme, which means smaller businesses will be able to access additional support for installing electric vehicle (EV) charge points. Eligible organisations can access grant funding of up to 75% of the cost of installing EV charge points, up to a maximum of £350 for each socket, through the Workplace Charging Scheme. So if you’re considering investing in EV charge points, be sure to check the scheme’s eligibility criteria, as you may be able to get a grant.
The Government is also set to provide further funding for new renewable capacity, as they have confirmed that the budget for the next Contracts for Difference (CfD) auction will be set at £265 million.
The CfD auctions support the growth of renewable generation in the UK, as projects that win CfD contracts receive a guaranteed ‘strike price’ for the energy they provide to the grid. These contracts last for 15 years, which provides developers with the confidence they need to invest in new renewable generation projects. The next auction will be the first time that floating offshore wind has been included in the CfD, and the first time since 2015 that onshore wind and solar have been allowed to bid for CfD contracts. However, almost £200m of the £265m CfD budget is set to be invested in offshore wind projects, in order to ensure the Government can meet its target of 40GW of offshore wind capacity by 2030.
It’s encouraging to see increased support for new renewable energy capacity and that more projects are receiving the financial certainty they need to get off the ground.
Sometimes, it can feel as though we’re inundated with bad news about the climate crisis. And while it’s important for us to be aware of the urgent need for climate action, it’s also vital to remember that with so many countries, businesses and individuals focused on taking action, there’s plenty of good news out there too!
This month, we were delighted to discover that according to new figures from RenewableUK, the UK is now the world leader in floating wind energy. There are now more floating wind projects in plan or operational in the UK than anywhere else in the world, with 8.8GW of floating wind capacity in various stages of development. The UK owns over 16% of the total global pipeline of floating wind projects and the government has pledged to build at least 1GW of floating wind by 2030.
This innovative technology will play a key role in the UK’s transition to net zero. In fact, our own parent company, Statkraft, have helped the world’s largest floating wind farm in Scotland find its customers! You can find out more about this exciting development, here.
Talk to our team
If you have any questions about any of the updates we’ve discussed or how they might affect your business, our team of experts is on hand to answer them. Simply call us on 0121 726 7575 or email us at firstname.lastname@example.org.