Energy and Utilities

The Energy Transition | Government consults on GB electricity auctions, six actions to limit global warming, and more

Published on 1st Oct 2021

This week we look at the government's consultation on re-coupling GB auctions for cross-border trade with the EU, the six key actions set out by the Energy Transitions Commission to limit global heating to 1.5°C, the award of £3.8m in funding to projects supporting the coexistence of offshore windfarms and UK air defence systems, and more.


Government releases consultation on re-coupling GB auctions for cross-border trade with the EU

This week, the Department for Business, Energy and Industrial Strategy (BEIS) has opened a consultation on the future of cross-border electricity trading with the EU. The consultation is seeking feedback on the existing arrangements for trading electricity on power exchanges, and on proposals for enhancing the efficiency of cross-border trading.

Post-Brexit, Britain's wholesale electricity market has been decoupled from the EU Internal Energy Market. This means that electricity is no longer traded through the EU market coupling regime and, instead, interconnector capacity is sold to the market discretely from electrical energy. The result is that there is no single GB clearing price; something that the consultation notes would be "highly desirable to support efficient trade of electricity".

BEIS is consulting on the introduction of a single GB clearing price, which would serve to re-couple Britain's electricity auctions with the EU. The consultation asks stakeholders to comment on a number of questions regarding the formation, implementation and regulation of a single GB clearing price, as well as on potential interventions across other trading timeframes and borders.

The consultation is open for the next four weeks, closing on 28 October 2021, with BEIS particularly seeking views from those operating in the electricity market industry sector.

The Energy Transitions Commission sets out six key actions to limit global heating to 1.5°C

The Energy Transitions Commission, an international think thank, has released a report entitled 'Keeping 1.5°C Alive' which calls for faster progress to be made in limiting global warming to 1.5°C. The report argues that current Nationally Determined Contributions (NDCs), which are made as part of the Paris Agreement, are insufficient, and that carbon dioxide emissions need to be reduced by 40-50% and methane by about 40% by 2030 in order for  the 1.5°C target set out in the Paris Agreement to be met. The report has put forward six key action points which, if agreed at COP26 next month, will make it possible to achieve the 1.5°C target. It focuses on actions which are "clearly technically feasible", would "entail either nil or even negative costs" and would also "deliver significant co-benefits," such as improved air quality.

The six actions are as follows:

  1. Significant and rapid reductions in methane emissions.
  2. Halting deforestation, beginning reforestation and other carbon sequestration opportunities.
  3. Decarbonising the power sector and accelerating coal phase out.
  4. Accelerating road transport electrification.
  5. Accelerating supply decarbonisation in buildings, heavy industry and heavy transport.
  6. Energy and resource efficiency improvements.

The Commission has stated that, "[t]he six actions identified in this report could in principle close over 90% of the gap between the emissions pathway implied by the latest NDCs and what is required for the world to be on a path to limit global warming to 1.5°C by 2030."

Government announces funding for technologies that address the disruption to UK air defence systems caused by offshore windfarms

The government has awarded £3.8m in contracts for the development of technologies that mitigate the risks posed by windfarms to the operation of Air Defence and Air Traffic Control surveillance. The seven projects backed by the fund involve innovative technologies aimed at minimising this disruption, such as advanced nano-scale radar absorbing material, machine learning and artificial intelligence

The funding forms Phase 2 of Windfarm Mitigation for UK Air Defence; a competition launched in partnership between BEIS and the Royal Air Force. Phase 1 saw £2m awarded to five other projects supporting windfarm radar mitigation.

The competition was launched as part of BEIS' wider £1bn Net Zero Innovation Portfolio, which aims to identify and support innovative projects that accelerate the development of low-carbon technologies and systems. Key areas of focus include future offshore wind, bioenergy, energy storage and flexibility, and disruptive technologies.

Wing Commander Kevin Walton, Co-Chair of the Ministry of Defence/Offshore Wind Industry Council Air Defence Mitigation Task Force, said, “Offshore wind will play a major role in achieving our Net Zero Targets. The technology being developed in this competition will help the UK achieve its renewable energy targets without compromising the surveillance of UK airspace."

Morocco-UK Power Project to provide renewable energy through longest sub-sea cable

Xlinks' has announced plans for a new Morocco-UK Power Project, which is set to provide seven million British homes with low-cost, clean power by 2030 and to supply eight percent of Great Britain's electricity needs once complete. This energy will be generated in Morocco using solar and wind technologies, and will be combined with a battery storage facility. Morocco was chosen for this project as it "benefits from ideal solar and wind resources, required to develop renewable projects that could guarantee suitable power production throughout the year … the shortest winter day still offers more than 10 hours of sunlight. This helps in providing production profiles that address the needs of the UK power market, especially during periods of low offshore wind production."

The project will see 3,800km high-voltage direct current sub-sea cables connecting from Morocco's Guelmim Oued Noun region to Great Britain, having skirted the coasts of Spain, Portugal and France. Xlinks states that the project will "generate 10.5GW of zero carbon electricity from the sun and wind to deliver 3.6GW of reliable energy for an average of 20+ hours a day." An agreement has been reached with the National Grid for two 1.8GW connections at Alverdiscott in Devon.

Xlinks hopes that the project will qualify for the Contracts for Difference (CfD) scheme that currently only applies to power generated within Great Britain. Executive chair Dave Lewis, former CEO of Tesco, believes a CfD of £48/MWh would make the project economically viable.

Surge in electric vehicle charge point installations

UK Power Networks (UKPN) has reported an increase of nearly 2,700 electric vehicle (EV) charge points installations across London, the East and South East over the last 12 months; a rise of 42%. UKPN anticipates that these chargers will serve 4.5 million EVs across these areas by 2030, when sales of new petrol and diesel cars are to be banned.

Shira Lappin, innovation project lead at UKPN, said, "[i]t’s important that we work with local and central government, charge point operators, customers and other stakeholders to ensure that the transition to Net Zero is a seamless one and everyone has access to the charging infrastructure they need”.

EV use is forecast to rise across the UK in the coming years, with a recent report by Midlands Connect projecting that EV use in the Midlands will surge by over 3000% by 2030. This report highlights the need to further strengthen the EV charging network to facilitate this growth. Maria Machancoses, Chief Executive of Midlands Connect, said, “[w]e know that being worried about not being able to charge when needed is a major factor that puts many off making their next car electric; this needs to change. By working together to create a region-wide EV strategy and overcome the challenges of installing the infrastructure we need, we can move one step closer to decarbonising our transport network.”

To support the transition to EVs and aid further growth in the UK's EV charging network, SP Energy Networks has launched the Charge Project's ConnectMore Interactive Map (CIM). The map displays projected EV demand between 2025 and 2050, helping bodies such as local councils and charge point operators determine which locations would benefit the most from EV charging points. It also allows users to identify locations where charge points could be accommodated by the existing electricity network, minimising the need for further cabling.

Robotics in the energy sector to be worth £8.4bn by 2050

Research conducted by ORE Catapult suggests that the global robotics market in the energy sector could be worth £8.4 billion by 2050. A large part of this growth will be driven by developments in onshore and offshore wind, which is predicted to be worth £1.3 billion by 2030 and £3.5 billion in 2050. According to the report, the growth in the robotics market in the energy sector closely aligns with the decline in oil and gas production, and will help to achieve net zero targets.

Gavin Smart, Head of Analysis and Insights at ORE, said: “The growth of the global energy market presents a remarkable opportunity for robotics and autonomous systems."

“What is unique about the robotics market is the potential for cross-application technologies. It is likely that the solutions that will maximise performance, increase efficiency and improve safety will be adapted to work across multiple industries – inside and outside energy."

Smart believes that the UK has the potential to be a pioneer and expert in this field, which could lead to a multi-billion pound domestic and export market over the coming decades.

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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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