The National Infrastructure Commission called on the government to produce a delivery roadmap for electric vehicle charging infrastructure to meet the 2030 end to new diesel and petrol car and vans sales.
The Public Accounts Committee released a new report assessing the government’s long-term environmental goals.
National Grid Electricity System Operator issued the final transmission network use of system (TNUoS) charges to apply from 1 April 2021, revealing an increase on the previous year’s charge.
SSEN Transmission published a discussion paper on transmission charges, calling for views on the current Transmission Network Use of System charging regime.
Ofgem welcomed the launch of the Energy Network Association’s (ENA) Green Recovery Scheme and is seeking views on how it will fit with the regulatory framework.
Small businesses and those in leasehold and rented accommodation can benefit from up to £50mn to install electric vehicle charge points, as part of a new scheme by the Department for Transport.
The Commons Environmental Audit Committee (EAC) made a series of recommendations for the government to focus on in securing a green recovery from the COVID-19 crisis.
Also covered in this Regulatory Report:
- Survey finds public support for wind and solar power expansion.
- Drax: UK renewable energy set new record in 2020.
- REA pathway sees 100% renewable generation by 2032.
- Thinktank identifies key barriers for BEV uptake in UK.
- Shell outlines carbon intensity reduction targets.
- Eelpower and EDF enter new partnership for battery optimisation.
NIC calls for roadmap for EV charging roll out
The National Infrastructure Commission (NIC) has called on the government to produce a delivery roadmap for electric vehicle (EV) charging infrastructure to meet the 2030 end to new diesel and petrol car and vans sales. The government should also ensure that future price controls facilitate the necessary investment in the electricity grid to accommodate EVs. The NIC provides the government with advice on major long-term infrastructure challenges.
The NIC puts forward several priorities for 2021 in its latest Annual Market Monitoring Report, published on 17 February. In addition to the EV roadmap, the NIC would like to see the publication of a comprehensive cross-modal freight strategy in 2021, with a firm commitment to phase out diesel HGVs by 2040. Detailed decarbonisation plans should be arrived at after consultation with the road haulage and logistics industry. There should be a pathway to major urban transport investment in the 2030s.
The NIC also says the government should set out the next steps on heat decarbonisation and the development of a hydrogen industry. It is crucial that government takes steps to establish a better evidence base for heat pumps and hydrogen boilers before making “challenging and contentious” decisions on the future of heat in the mid to late-2020s. It is essential that current targets for the hydrogen economy are met or exceeded, as large-scale infrastructure is needed in a short timescale.
Government’s environmental progress “disappointing”
The Public Accounts Committee has released a new report assessing the government’s long-term environmental goals. Published on 3 February, the report states that since the government first set its ambitions to improve the natural environment within a generation back in 2011, progress has since been “disappointing.”
The Public Accounts Committee stated that the 25 Year Environmental Plan, which was published in 2018, did not have a set of clear of objectives or interim milestones to track progress. It also added that the range of indicators needed to track performance were inadequate with only 38 of the 66 indicators in place. The government had also taken a “piecemeal” approach to funding and the Treasury did not understand the cost needed to reach long-term goals.
The report also highlights that the Environment Bill, which is expected to get Royal Assent in 2021, will only provide the statutory framework for five of the goals in the plan, while the remaining five have not. With the government having already missed its air quality target and likely to miss several biodiversity goals, the Committee provides a number of recommendations to occur within a month of the bill passing. These include:
- The Committee is provided with the timetable for setting long-term objectives for those areas of the plan that will not be put on a statutory footing by the Environment Bill, setting interim milestones for all its environmental goals, developing and reporting on a complete set of environmental outcome indicators framework. The government should also provide an annual update against this timetable, as part of its environmental progress reports.
- The Department should write to the Committee to set out what steps it is taking to minimise the delay between the passing of the Environment Bill and the establishment of the Office for Environmental Protection. As is the case with the Climate Change Committee, the Office for Environmental Protection should have a mandate to report directly to Parliament.
A new survey carried out on 3,000 members of the public has found high support for several measures in the Prime Minister’s 10 Point Plan. Published on 23 February by Royal Holloway University, the research finds 64% of the public supports a programme which would include, among other measures:
- A fourfold increase in wind power.
- A sixfold increase in hydrogen power.
- £787.5mn investment in nuclear power.
- £1.5bn funding for insulating homes and public buildings.
- Banning internal combustion engine vehicles by 2035.
- Grants for buying electric vehicles.
- Funding electric public transport.
In comparison, the baseline policy of no environmental action and investment is widely opposed by the public. Only 20% of the public were found to support taking no environmental action, with 41% of the public opposing and 40% being indifferent.
Additionally, researchers found that, ultimately, support for this policy programme cuts across both Conservative and Labour supporters.
Last year saw renewables generation in Great Britain outstrip fossil fuels for the first time, according to Drax’s latest Electric Insights report. Published on 15 February, the report stated that biomass, hydro, solar and wind power represented 41.6% of total generation, compared to the 39.6% from fossil fuels. Wind and solar alone generated 30% of GB’s electricity last year, while biomass, wind and solar all generated record amounts of power over the course of the year.
Wind generation reached a record 68.4TWh in 2020; however, a record amount of wind was also curtailed due to network constraints (with the Western Link HVDC offline during January and February) and low demand as a result of COVID-19 restrictions. 3.82TWh of wind generation was turned down in 2020, only slightly lower than the combined 3.87TWh from 2018 and 2019.
Carbon emissions from electricity generation fell by 16% as gas and coal power stations were turned off or down due to reduced demand during COVID-19 lockdowns. Coal-fired power stations accounted for 1.6% of total generation, down from 2.1% in 2019. Overall, fossil fuel generation fell below 100TWh for the first time since 1960. 2020 saw 203 days where renewable generation was higher than fossil fuels, more than 2018 and 2019 combined. This saw GB’s electricity generation carbon intensity drop 11% year-on-year to 169g/kWh.
The Renewable Energy Association (REA) published its Strategy for Renewable Energy and Clean Technologies, setting out a pathway forward which would see, by the end of 2022, more than 50% of electricity generation being provided by renewables, reaching 100% by 2032. The REA stresses that the early 2020s is a “critical period” for renewables.
Published on 23 February, the plans sets out interim as well as long-term targets across power, transport, heat and finance. The REA says that the majority of energy demand for the heat and transport sectors could be met from renewables and clean technologies by 2035.
The REA stressed the importance of a route to market, as well as a mix of technologies for electricity and gas.
Final TNUoS tariffs for 2021-22 sees demand tariffs up
National Grid Electricity System Operator (ESO) issued the final transmission network use of system (TNUoS) charges on 30 January to apply from 1 April 2021, revealing an increase on the previous year’s charge. TNUoS charges recover the cost of installing and maintaining the transmission system in England, Wales, Scotland and offshore. National Grid ESO operates the GB electricity transmission system, working to make sure the grid is balanced and that demand meets supply.
The revenue to be recovered through demand tariffs – the element that consumers pay – for 2021-22 is £2,544.5mn. This has decreased by £52.1mn compared to the draft tariffs, mainly driven by the decreased revenue from transmission owners. Compared to 2020-21, the average half hourly demand tariff will increase 3.6% from £49.57/kW to £51.36/kW and the non-half hourly by 8.0% from 6.02p/kWh to £6.50p/kWh.
National Grid ESO has calculated the TNUoS charge will form £36.41 of consumer bills, a decrease of £0.36 from the draft tariffs.
SSEN calls for reform of “unfair and volatile” charging regime
SSEN Transmission published a discussion paper on transmission charges on 15 February, calling for views on the current Transmission Network Use of System (TNUoS) charging regime. This, it says, results in Scottish renewables generators paying “significantly higher costs” to connect their electricity to the grid than those in other parts of GB.
The paper outlines SSEN Transmission’s findings on TNUoS charging in the north of Scotland and explores the issue of TNUoS volatility and unpredictability. The network company said industry stakeholders have consistently told them that charges for transmission access in the north of Scotland, as well as uncertainty about future charges, are acting as a barrier to the development of renewable energy.
SSEN Transmission said two factors “sit uncomfortably” with its analysis:
- The cost of the onshore GB transmission system has been largely stable. Ofgem’s assessment of the RIIO-T2 settlement is continued stability – costs will fall by around 0.6%.
- The UK’s 2050 net zero target.
As a result of this analysis, SSEN Transmission is calling for the TNUoS charging regime to be reviewed.
Ofgem and ENA launch pre-RIIO-ED2 scheme for investment
Ofgem has welcomed the launch of the Energy Network Association’s (ENA) Green Recovery Scheme and is seeking views on how it will fit with the regulatory framework.
In an open letter on 8 February, Ofgem said that it had invited the electricity distribution networks to work together through the ENA to identify measures targeted towards accelerating net benefits to consumers through decarbonisation of the energy networks, while also making a contribution to a green economic recovery. This included proposals: to enable the fastest possible ramp-up of investment programmes that had to be scaled back to accommodate COVID-19 restrictions; and to accelerate planning work from future years to start now to help reactivate supply chains and deliver earlier benefits to consumers.
Government provides a further £50mn to further EV charging
Small businesses and those in leasehold and rented accommodation are set to benefit from up to £50mn to install electric vehicle charge points, as part of a new scheme by the Department for Transport (DfT).
Announced on 13 February, the Electric Vehicle Homecharge Scheme (EVHS), will provide up to £350 towards a chargepoint, and will be expanded to target people in rented and leasehold accommodation. At the same time, the Workplace Charging Scheme (WCS) will target SMEs and the charity sector, so that small accommodation businesses can also benefit from funding, boosting rural areas, and tackling ‘range anxiety’ associated with long journeys.
In response to the news, Energy UK Chief Executive Emma Pinchbeck said: “Today’s announcement from Government is a welcome step, enabling more consumers to make the change to electric vehicles. To ensure a smooth transition to low carbon transport, improve air quality and meet our net zero target, we need to give consumers the confidence to switch by making it easier to access and own EV chargepoints.”
The Renewable Energy Association, welcomed the extension to the EVHS and the Workplace Charging Scheme ”as they are critical programs for supporting homes and businesses wanting to go electric”.
EAC sets out priority areas for net zero investment
The Commons Environmental Audit Committee (EAC) made a series of recommendations for the government to focus on in securing a green recovery from the COVID-19 crisis. In its report, Growing back better: putting nature and net zero at the heart of the economic recovery, published on 17 February, EAC said the COVID-19 crisis must be treated as a wake-up call. EAC produced the report from the findings of its how to ‘green’ the economic recovery inquiry it carried out over several months. It praised the “considerable progress” made in decarbonising electricity over the last decade, but said the UK is lagging in introducing measures to decarbonise transport, industry and buildings. EAC is arguing for targeted green investments unlike the untargeted response to the 2008 financial crash which it said led to money going more into the financial sector than other sectors.
Concerning transport, EAC recommends:
- Set out, in the forthcoming transport decarbonisation strategy, what plans the government has for substantial long-term investment in better public transport and in traffic reduction measures.
- Provide support to scale up the electric vehicle supply chain—in particular the manufacture of electric vehicle batteries—to enable the sector to make the rapid switch from the production of internal combustion engines to the manufacture of ultra-low and zero emission vehicles.
- Introduce further tax incentives to accelerate uptake of ultra-low emission cars.
For building emissions, EAC recommends:
- Urgently overhaul the Green Homes Grant scheme, which has experienced administration issues causing delays and extend it to provide greater long-term stimulus to the domestic energy efficiency sector.
- Front-load investments into energy efficiency upgrades for public buildings such as schools and hospitals. Providing energy efficiency upgrades to the UK’s social housing stock should also be prioritised.
The liberal conservative Bright Blue thinktank published a report on 4 February, identifying the current barriers to battery electric vehicle (BEV) uptake in the UK and setting out recommendations for the government. Report authors Patrick Hall and Ryan Shorthouse argue that there are four key barriers to BEV uptake in the UK: upfront price, charging infrastructure, range anxiety and lack of vehicle choice.
Using Society of Motor Manufacturers and Traders (SMMT) polling data from August 2020, Bright Blue identifies upfront price as the most popular reason for households not purchasing a BEV (52%). In every instance, where BEVs have an internal combustion engine (ICE) vehicle counterpart, the new ICE vehicle model is considerably cheaper. This disparity also appears in the second hand market. Analysis of the second hand vehicle market has shown that the average price of a used BEV is £25,880, whilst this figure dips to £12,389 for petrol vehicles.
The think tank recommends the Treasury front-load the value of the Plug-in Car Grant so it equals £5,000 from April 2021 and then gradually reduce its value in regular intervals before being phased out completely from October 2023. It also recommends the government establish a Used Vehicle Plug-in Car Grant of at least £2,000 to support low income people into BEV ownership, as well as enabling enhanced capital allowances for businesses which purchase zero emission vehicles for the purpose of renting and leasing them.
Shell published a strategy to accelerate its transformation into a provider of net zero emissions energy products and services on 11 February. The company, which claims its total carbon emissions peaked in 2018 and oil production peaked in 2019, says its transition will continue through growth in its customer-facing businesses.
Shell issued a series of carbon intensity reduction targets: 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using a baseline of 2016. Shell will rebalance its portfolio, investing annually:
- $5-6bn (£3.52-4.23bn) in its ‘Growth’ pillar – around $3bn (£2.11bn) in marketing and $2-3bn (£1.41-2.11bn) in renewables and energy solutions.
- $8-9bn (£5.64-6.34bn) in its ‘Transition’ pillar – around $4bn (£2.82bn) in integrated gas and $4-5bn (£2.82-3.52bn) in chemicals and products.
- Around $8bn (£5.64bn) in upstream operations.
Eelpower have signed an agreement for battery optimisation with EDF. Announced on 23 February, the partnership will involve the trading and optimisation of three grid-scale battery projects located in the UK, totalling 80MW. EDF’s specialist teams will be responsible for managing the trading and optimisation strategy for three UK-based batteries managed by Eelpower over a period of seven years. Majority ownership of the assets lies with Swiss fund manager SUSI Partners’ Energy Storage Fund while the remaining stake is owned.
Stuart Fenner, Head of Energy Trading Services at EDF, said: “We are really pleased that Eelpower has chosen to partner with EDF on the trading and optimisation for a number of its battery storage projects. Partnerships with early innovators such as Eelpower, are testament to our highly skilled teams and the work that has been put into building our track record for first class trading and optimisation services.”