The Energy Transition | National Grid ends ODFM Service, The ELC reaches 100% renewable electricity, BEIS announces £134 million green grant

Written on 6 Nov 2020

This week we look at National Grid ESO ending its Downward Flexibility Management service, BEIS launching a call for evidence on electricity licence exemptions, WPD launching a domestic flexibility pilot, and more.

BEIS announces £134 million grant to help UK businesses build back greener

The Department for Business, Energy and Industrial Strategy (BEIS) has announced the next round of allocations from its Sustainable Innovation Fund, which will see £134 million of investment into "ground-breaking clean growth projects" which will "develop new technologies, secure and create new jobs, drive productivity and tackle climate change."

Over 1000 UK projects have each received up to £175,000 of funding to further their development.. Funded projects include the development of autonomous technology to facilitate underwater inspections of large offshore wind turbines, and plans to use AI to reduce beer waste in the brewing process.

According to Business Secretary Alok Sharma, the investment will "ensure that our innovators and risk-takers can continue to scale up their ideas, helping the UK to build back better and ensure we meet our clear commitments on tackling climate change."

A further £49 million of government investment has been allocated to projects in the electric vehicle (EV) sector. These projects are aimed at improving various aspects of EV technology, such as: the development of high-performing batteries; innovations in terms of recycling EVs and their batteries; and using automation to increase productivity and cut costs on EV production lines.

BEIS call for evidence on exemptions from the requirement for an electricity licence

On 30 October 2020, BEIS published a call for evidence on the rules governing the exemptions from the general requirement to hold a licence for electricity generation, distribution and supply, which are set out in the Electricity Act 1989. The Act provides that electricity generation, distribution and supply activities should all be licensed unless the person is exempt from the requirement to hold a licence.

The Secretary of State has the power to under the 1989 Act to exempt individuals or classes of individuals from the requirements to hold a licence. The Electricity (Class Exemptions from the Requirement for a Licence) Order came into effect in 2001, and set out exemptions which apply to certain classes of generation, distribution and supply arrangements. However, the Order has not been amended since 2007 and the energy market has changed substantially since then.

For example, there has been significant growth of distributed generation and renewables, and an increasing number of organisations offering energy flexibility services. The policy landscape has also changed,  with the government’s introduction of a net zero emissions target, and its objective to ensure that all market participants (including those who are exempt from licence requirements) pay their fair share of policy and network costs.

The call for evidence has been launched to help BEIS understand how the exemptions regime currently operates, and how it has interacted with changes in the energy market. Responses to the call will inform a future consultation on potential changes to the regime and will provide a basis for considering whether changes are needed to reflect policy aims.

The call for evidence is open to all but BEIS is particularly seeking views from those with an interest in the exemptions regime. This includes those benefitting from an exemption, those wishing to benefit from an exemption but unable to do so due to the requirements of exemptions legislation and/or policy, and licensed stakeholders, consumers and trade bodies.

The deadline for responses is 1 March 2021.

WPD launches domestic flexibility pilot Sustain-H

Western Power Distribution (WPD) has launched Sustain-H, a flexibility service pilot scheme which hopes to enable customers to "save money on their electricity bills while helping manage demand on the network." Designed by WPD and energy consultants Everoze and Smart Grid Consultancy in spring 2020, it is the first flexibility scheme run by the distribution network operator which is specifically designed for domestic customers. WPD originally hoped that four providers would sign up to the service but they successfully managed to secure eight, including EDF and Octopus Energy. Felicity Jones of Everoze said that they were "overwhelmed by industry response".

The pilot scheme will require the providers to drop their demand to a pre-agreed level at pre-agreed times and usage will then need to be held at that level for four hours. Customers delivering within those four hours can earn £10 a year for homes with electric vehicle charge points or £60 for homes with heat pumps and batteries.

The pilot will go live in November for five of the providers and the remaining three will follow in March 2021.

National Grid ESO ends Downward Flexibility Management service as Covid-19 grid challenges lessen

National Grid Electricity System Operator (NG ESO) ended its Optional Downward Flexibility Management (ODFM) service on 25 October 2020, as a result of increased grid stability since the first lockdown brought about by the Covid-19 pandemic.

The service (the launch of which we reported on in May) was introduced as a temporary solution to help NG ESO manage the unprecedented drop in electricity demand caused by the lockdown. During periods of low demand, distributed renewable generators received an agreed market price to turn off their generation, and some large consumers were paid to increase consumption.

Over 4.7GW of volume from 363 units signed up for the ODFM service and it was dispatched on five different occasions during its lifetime. As lockdown restrictions eased, electricity generation, demand and prices returned to pre-Covid-19 levels, reducing the need for the service.

Reflecting on the service in a recent update, NG ESO stated, "As a curtailment/demand turn up service, there is lots of learning we have gained from ODFM which we will take forward to meet our system needs for both negative reserve and whole system constraint management for future ancillary service development.”

The Estée Lauder Companies reaches net-zero emissions and 100% renewable electricity targets

The Estée Lauder Companies (ELC), which includes brands such as Clinique and DKNY, has announced that it has met its 2020 goal of achieving net zero emissions and meeting its electricity demands with 100% renewable energy. The 2020 goal was set in 2017 when ELC joined the Renewable Energy 100, a global corporate renewable energy initiative.

To achieve the 2020 net zero goal, ELC signed a 22 MW Virtual Power Purchase Agreement with Ponderosa wind farm in the US and also installed 5MW of ground-mount and rooftop solar panels across its facilities around the world.

ELC has also progressed its climate goals further by setting science-based emissions reduction targets, as part of the Science Based Target Initiative. Fabrizio Freda, President and CEO of ELC said that, “Today’s announcement signals a new level of ambition and dedication to climate action for The Estée Lauder Companies. Setting ambitious targets in line with the latest climate science is testament to our values and commitment to managing our business for the long term.”.

NewMotion signs roaming agreement with Osprey to offer 'first class charging experience'

NewMotion, a leading European smart charging solutions provider, has teamed up with Osprey Charging (formerly Engenie) to agree a roaming partnership. This will combine Osprey's 259 rapid connections with NewMotion's over 3,000 public charging locations in the UK.

NewMotion and Osprey Charging are both part of Hubject's international intercharge network, a leading platform for B2B interoperability services which is reported to have over 750 partners worldwide and is facilitating the partnership. Alan McCleave, NewMotion's UK general manager said, "It’s great to see roaming partnerships are becoming the norm here in the UK as our EV market continues to mature and the need for easy access to charging infrastructure grows."

Thinktank calls for a new authority to oversee offshore development

Policy Exchange, an influential right wing thinktank, has published a report entitled "The Future of the North Sea". The report was supported by National Grid and was prepared with input from consultants Frontier Economics. The report calls for the establishment of a new authority to oversee the North Sea's development and to ensure that "uncoordinated" offshore wind farm growth does not deprive hydrogen and carbon capture and storage infrastructure of access to seabed space. The intention is that the new authority would coordinate development across the UK's seas by producing Marine Plans.

The thinktank has warned that the UK's current approach of "first come, first served" to planning will mean that the "full potential of the North Sea to deliver sustainable economic growth and Net Zero will not be achieved." The report found that if the full potential of the North Sea could be exploited it could generate economic benefits of £20 billion per year and a net increase of 40,000 jobs. Will Nicolle, the lead author of the paper, said ,"The prime minister has said he wants the UK to be the ‘Saudi Arabia of wind power’. To achieve that, we’ll need a strategic approach in an increasingly crowded space."