MONTHLY HEADLINES
 
Final Targeted Charging Review Decision Announced

Renewable energy groups have criticised Ofgem for pressing ahead with its Targeted Charging Review (TCR), arguing they will damage the development of a more ‘flexible’ energy system and will negatively impact the deployment of subsidy-free renewable power going forward. Carter Jonas is in the process of reviewing the decision and how this may impact on our clients.  

Great Britain Needs Tenfold Increase in Energy Storage to Meet Carbon Targets


New research commissioned by Drax, has shown that we will need at least 30GW of energy storage in order to reach net zero by 2050. This is due to the growth of intermittent generation from renewable sources such as wind and solar which means that storage is needed to balance out the peaks and troughs. This is particularly due to the fact that the majority of power is generated in the middle of the day and the highest demand generally occurs in the evening.

Renewable Energy Tops UK Investment Sector

According to a recent survey, almost one third (30%) of UK investors stated that renewable energy was the area they would actively put their money into for long-term gain. Carter Jonas would support this view having advised on or being involved in over £500m of Renewable Energy Investment opportunities in the last 12 months for private, institutional and public sector clients.

Carter Jonas Infrastructure and Energy Team Expands Further

We are pleased to welcome both Martin Williams to our Leeds office and Tom Hilton to our Cambridge office. Martin joins us from Community Windpower and has extensive experience in site selection, landowner negotiations and planning for onshore wind developments. Tom was part of a development consultancy working on large scale renewable developments from initial site identification through to build out. 

Industry News

Short-term electricity prices rallied in November, largely supported by colder temperatures and changeable wind output. Prices hit a 7-month high mid-month at around £51/MWh, having dropped as low as £33.5MWh at the end of October. Wind has played a key role, with the spikes in prices being seen when wind levels dropped sharply, which led to coal-fired plants being switched on and a sharp increase in electricity imports to support the UK grid. Strong renewable generation towards the end of the month helped stabilise prices along with a well-supplied gas market. 

Forward electricity prices, however, continued the same downward trend seen in October, largely driven by a strong supply outlook from LNG. Prices did witness a brief rally at the start of the month, driven by rises in gas and oil markets. However, by the middle of the month prices had shred almost 5% to below £48/MWh, a 19-month low. The main drivers being, high gas storage levels, expected LNG supplies and forecasts of a milder than normal winter.

Exceptionally high wind generation on the 9th December resulted in 14 hours of negative prices, the lowest level being -£88/MWh. With wind output forecast to remain high this month, and temperatures forecast to turn milder, UK electricity prices are likely to be relatively stable.

  • Wind turbines and solar PV schemes will make their debuts in the forthcoming Capacity Market auctions after completing the prequalification process. Eleven onshore wind farms have prequalified to bid for the contract covering 2022 to 2023, with a further eleven competing to supply during 2023 to 2024. A 50MW solar scheme in Anglesey has also prequalified for both years along with 2GW of demand side response and 400MW of battery storage capacity. 
  • The UK is back into seventh position in the most recent of EY’s Renewable Energy Country Attractiveness Index (RECAI), boosted by a vibrant offshore wind sector. The index ranks 40 countries based on how attractive they are for investment and deployment opportunities for a range of technologies. 
  • Wireless electric vehicle (EV) charging is set to be introduced in the UK over the next few months. The new technology, sourced in Germany, will enable EV charging by parking vehicles over inductive pads installed beneath roads and remove the requirement for a charging cable. The wireless charging points are set to be delivered across multiple sites – from on-street residential to car parks, public service and taxi ranks.

Harmony Energy, advised by the Carter Jonas’ Infrastructure and Energy team, has secured planning permission from East Riding of Yorkshire Council for the construction of a 49.5MW battery storage scheme. The new facility, incorporating multiple battery units, will be built on a 2.5 acre site on land adjacent to Creyke Beck substation in Cottingham, near Hull. 

Simon Currie, Energy Specialist at Carter Jonas, said; “this is the second 49.5MW battery storage scheme for which Carter Jonas has secured planning consent on behalf of Harmony Energy, demonstrating our expertise in this sector and ability to bring real value to our clients. 
“Battery storage is playing an increasingly important role in the energy sector with its ability to store surplus renewable energy and release it back to the grid during periods of high demand, helping reduce fossil fuels use and atmospheric pollution. 

“With the climate change emergency signalling a watershed moment in our industrial history, here at Carter Jonas we are extremely pleased to have assisted in another development that helps reduce CO2 emissions.”

Work is due to start on the scheme next year which combined with their other battery site, will be one of the UK’s largest, and will store energy from the wind farms being built on the Dogger Bank, 80 miles off Yorkshire’s coast.

This month’s feature article was produced by Simon Currie, Energy Specialist at Carter Jonas.

Electric Vehicle Charging Points – The installation of EV charging points is a great way to future proof your site as the market is set to soar over the next decade. Securing grid capacity early is key as this could restrict future deployment. Return on investment can be sought through the owning and operation of charging points, or the lease of a site to an operator for an EV charging service station. Download our brochure here.

Solar PV – Carter Jonas is actively site finding and advising clients on the development of over 60 sites that will enable the development of over 3GW of subsidy free solar schemes across the UK. For high energy users, self-development options are also still available beyond the closure the FIT scheme in March 2019.

Battery Storage – The market for behind-the-meter battery storage and Demand Side Response (DSR) is evolving quickly. The income streams are becoming more uncertain, but the possibility of tying in batteries with Solar PV is making the financial model more favourable, particularly for energy-intensive industries with an annual electricity spend of higher than £100,000.

Gas and Electricity Brokerage – Volatility in wholesale markets, combined with rising non-commodity charges, could force energy prices up 50% by 2020 compared to 2016 prices, according to recent figures. Carter Jonas can help manage these risks by working with businesses to produce an energy strategy and ensure they are not only getting the most competitive price through our brokerage service, but also taking advantage of other potential income streams. Find out more here.

Agency & Investment Opportunities Carter Jonas has advised on over £45m of energy agency transactions over the last 12 months. Whether you are seeking energy investment opportunities, have assets to sell, or would like advice on the marketability and potential valuation of sites or operational assets, our Energy Agency team would be delighted to assist. 

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@ Helen Melling
Helen Melling
Senior Energy Specialist
0113 426 9868 email me about Helen
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Helen is an Energy Specialist based in our Leeds office.

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