Energy and Utilities

The Energy Transition | DfT ends plug-in car scheme and Octopus completes flexibility trial

Published on 20th Jun 2022

This week we look at the DfT's decision to end its plug-in car scheme, Octopus Energy's Scottish flexibility trial, SSEN publishing its Whole System Register, announcement of RWE and SGN partnership to develop green hydrogen for domestic heating and more.

Industrial landscape with different energy resources. Sustainable development.

Department for Transport closes plug-in car grant for new applicants

The Department for Transport (DfT) has announced the closure of its plug-in car grant scheme to new orders. The scheme, launched in 2011, offered discounts of up to £1,500 to purchasers of new electric cars in an effort to kickstart the UK's electric car revolution. The scheme has been successful in establishing a mature market for ultra-low emission vehicles with over 100,000 electric vehicles (EVs) sold in the first five months of 2022 alone, compared with fewer than 1,000 in the whole of 2011. Drivers of EVs will still benefit from other incentives, including zero road tax and beneficial company car tax rates, which in total can save drivers over £2,000 each year.

The scheme was introduced as a temporary measure, with the UK government previously confirming funding until the current financial year. While the scheme initially had a significant impact on increasing demand for EVs, this has largely worn off. The size of the discounts offered has decreased over time with the government also narrowing the range of vehicle models covered by the scheme. However, these changes have had little effect on the rapidly accelerating sales of EVs and the growing range of models being manufactured.

 Funding will now be directed towards two other barriers to the EV transition:

  •  Public charging; and
  •  Support for other road vehicles where the switch to electric requires further development.

Commitment has already been shown towards developing the UK's public chargepoint network, with £1.6 billion of funding having been made available since 2020. To continue the drive towards net zero and ensure effective use of funds, £300 million of the plug-in grant funding will now be redirected towards subsidies to increase the uptake of electric taxis, motorcycles, vans, trucks and wheelchair accessible vehicles.

Transport Minister Trudy Harrison has said: "Having successfully kickstarted the electric car market, we now want to use plug-in grants to match that success across other vehicle types, from taxis to delivery vans and everything in between, to help make the switch to zero emission travel cheaper and easier."

SPEN and Octopus Energy complete flexible demand trial

ScottishPower Energy Networks (SPEN) and Octopus Energy have successfully carried out a six-week flexibility trial in Dumfries and Galloway, Scotland. The Flexibility Demand Shift Trial took place between March and April 2022 by way of six two-hour trial windows. Over 2,500 Octopus Energy customers were involved.

Octopus Energy customers were directed to increase their energy consumption when renewable energy supply was at its highest. SPEN would notify Octopus Energy when periods of high renewable generation were forecast, with Octopus Energy relaying this information to its customers. Customers were then able to adjust their level of energy usage in line with the high levels of renewable generation. Households that increased their usage by more than 10% were re-credited all the energy they had used during the two-hour window. Households that used more than 100% extra energy were credited double the amount they had used. On average, households were awarded £5 of free energy, with some saving up to £73.

Household energy flexibility schemes will help deliver a greener energy system through balancing the energy grid and reducing costs for all parties involved by decreasing reliance on costly grid rebalancing interventions. In 2021 alone, Scottish energy bill payers paid £107 million to onshore wind generators to shut down at times when there was too much power on the grid. Uptake from trial participants seems promising, with almost half (46%) saying they would consider managing their energy use in line with generation levels five days per week. 22% of participants said they would do so three days per week with 100% of participants amenable to controlling their energy at least once per week.

Octopus Energy has commented: "By tweaking how we consume power, we can make the most of every green electron generated in the UK and bring down costs for all. This trial was just the first step proving that people are happy to make small adjustments to help the grid and save cash. With a much larger campaign we would be able to really move the needle towards the flexible energy system we need for a greener future."

SSEN publishes its Whole System Register

Scottish and Southern Electricity Networks (SSEN) Distribution has published its full portfolio of innovation and business as usual activities through its Whole System Register. The register pulls together activities undertaken in partnership with other networks, local authorities, wider industry and users to help deliver net zero. SSEN hopes that this will allow its stakeholders to better engage with the distribution network by informing them of the work SSEN is undertaking and how they can get involved.

By adopting a "whole systems" approach, SSEN hopes that the register will help to coordinate stakeholders throughout and beyond the energy sector in order to identify opportunities that will facilitate cost-effective and timely decarbonisation. SSEN will perform regular assessments of the register to ensure relevant recommendations from stakeholders are considered and the register will be updated annually.

Strategic Lead for DSO at SSEN, Adam Bain, said: "The Whole System Register will be a powerful tool for stakeholders who want to understand our role in reaching net zero and how they can work with us. Cross-sector collaboration can secure efficiencies in the roll out of infrastructure to support decarbonisation and the transparency that this register offers is a crucial part of that. We have a feedback section built into our register to ensure stakeholders have clear channels to share their priorities with us and we are looking forward to increasing our dialogue with them."

RWE and SGN partner to develop green hydrogen for domestic heating

Renewable generator RWE and gas distribution network SGN have entered into a Memorandum of Understanding (MoU) to investigate the potential for heating Scottish homes with green hydrogen. The two companies are looking to develop electrolysers powered by RWE's 10 onshore windfarms, which have a total capacity of 213MW, to supply hydrogen via Scotland's gas network.

This follows after the UK government published its Energy Security Strategy in April, in which the government doubled ambitions for low carbon hydrogen production capacity to 10GW by 2030. Read more on this in our article in Utility Week (subscription required). Similarly, the Scottish government has set out its aim to create 5GW of hydrogen by 2030 and 25GW by 2045 in its Hydrogen Action Plan.

The partnership will target Scottish towns that are not connected to the mains gas network but are instead currently supplied by Liquified Natural Gas and Liquified Petroleum Gas. RWE and SGN predict that if the networks of Campbeltown, Stornoway, Oban, Thurso and Wick are converted to hydrogen, this could save 21,000 tonnes of carbon each year and decarbonise around 9,500 properties.

RWE Director of Hydrogen Development, Steve Boughton, said: "This MoU is a perfect partnership to develop options for the decarbonisation of domestic and business gas networks, and to help government achieve its ambitions for 10GW of hydrogen production. Hydrogen will play an essential role in the pathway to net zero, particularly in industry and homes which are hard to decarbonise, and RWE is perfectly positioned to support the development of the UK hydrogen economy.”

Protium secures £40.5 million funding for green hydrogen development

Protium, the green hydrogen developer, has announced its most significant funding round in the UK to date. Protium has secured a £40.5 million investment to further develop its already existing 250MW green hydrogen portfolio. Currently, this is the largest funding secured by a pure play green hydrogen energy company in the UK and makes Protium one of the few global green hydrogen energy companies to secure institutional funding over £20m. Protium's latest funding round was led by SWEM Capital Partners through its SWIFT 2 fund, which is dedicated to renewable gas and circular economy initiatives.

In particular, the funding will be used to develop Protium's flagship project in Magor South Wales in collaboration with Budweiser and its 40MW green hydrogen project in Teeside. Additionally, Protium will utilise this funding to enhance its in-house digital twin and energy system optimisation expertise, as well as its project and operational efficiency systems.

Chris Jackson, CEO and Founder of Protium, said: "Preventing catastrophic climate change is the greatest challenge society faces today. We are attempting to perform the fastest energy sector transformation in known economic history, which requires unprecedented speed, support and collaboration. The expertise and resources provided by SWEN and Barclays will help to accelerate the deployment of green hydrogen infrastructure and enable our partners to achieve their net zero goals faster. It is also a vote of confidence for green hydrogen, which we hope will catalyse other business and investors to push forward with us towards a cleaner, more sustainable future."

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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