Leicestershire County Council targets 10MW solar farm

Solar panel
Carter Jonas is pleased to have assisted LCC in the financial modelling and planning application for the proposed solar farm which, once completed, is expected to generate more than £830,000 a year in returns for the council. The site will also incorporate 15 carbon neutral industrial units with roof-mount solar PV installed as well as Electric Vehicle charge points. The scheme forms part of LCC’s commitment to reduce carbon emissions.

UN Launches COP26 Race to Zero Campaign

Business Secretary Alok Sharma announced the launch of the Race to Zero on World Environment Day (Friday 5th June). It is a campaign, in the run up to COP26, to urge businesses, investors, cities and regions around the world to commit to reaching net zero by 2050. The UN estimates that around a third of the world’s GDP is already committed to the principles of Race to Zero.

Largest UK Solar Scheme is Given the Final Seal of Approval

The 350MW Cleve Hill solar scheme, to be located over 900 acres of farm and marsh land on the north Kent coast, has been approved after three years of consultation. The scheme, which will also incorporate battery storage, will supply renewable power to 91,000 homes. Once built, it will mitigate approximately 68,000 tonnes of CO2 per annum and will therefore contribute significantly towards the country’s goal of net-zero greenhouse gas emissions by 2050. Construction is expected to start early next year, with generation to begin by 2023.

The Future of UK Carbon Pricing

UK GREENHOUSE GAS EMISSIONS FALL FOR SEVENTH YEAR IN A ROW
The UK Government has proposed a new Emissions Trading System (ETS) with Phase 1 proposed to run from 2021 to 2030 and to operate as either a linked scheme to the EU system or a standalone system. It will apply to energy intensive industries (EIIs), the power generation sector and aviation. The auction reserve price would be introduced at £15 per tonne to try and ensure a minimum level of ambition for the price, and to ensure it is in line with the EU ETS.

THE DRAMATIC IMPACT OF COVID-19 ON OUR ENVIRONMENT

In just a few months, global demand for energy has fallen off a cliff. In the first quarter of 2020, demand declined by 3.8%, with most of the impact felt in March when strict lockdown measures were enforced across Europe, North America and elsewhere. The impact of this change in lifestyle is estimated to result in a fall in global carbon emissions of around 4-8% in 2020 according to Carbon Brief.

But what exactly has led to these impacts?
Firstly, the lockdown imposed in the UK and other countries led to a drastic reduction in travel of all types and a reduction in energy intensive industries. While this is now increasing again, it remains well below the levels seen prior to the pandemic.

In addition, the lockdowns have led to a substantial drop in energy demand, with levels currently at between 15 and 20% below averages for the time of year in the UK.

These factors have been compounded by the sunniest spring on record leading to a substantial boost in solar PV generation. In fact, the month leading up to 10th May 2020 was Britain’s first coal-free month since the industrial revolution – with 700 consecutive hours of green electricity generation.

How had lockdown affected the carbon footprint of UK electricity generation?
In the settlement period between 12th and 24th May, demand on the Transmission System slipped to 14.5GW, with an increase in wind and solar generation particularly over the Spring bank holiday weekend generating 3.7GW and 8.7GW respectively.

On 24th May, electrical generation was the greenest it has ever been, causing a record low for carbon intensity. On that day, each unit of electricity was generated by as little as 46g of CO2, compared to the 940g it takes a coal-fired power station to generate the same.

But what does that mean? It takes a 10-year-old tree one year to absorb 20,000g of CO2 – so it would take over a fortnight to absorb the carbon released into the atmosphere for each unit of electricity generated from coal, and less than a day to absorb that released through renewable energy.

Is this reduction in carbon emissions likely to continue?
While most of the country remains at home, there is little to suggest that energy demand will be significantly increasing again soon. Renewable generation is likely to remain high particularly as we head into the summer season therefore, we predict carbon intensity records to continue to tumble.

Plus, we expect the demand for generators to come online in the near future, with developers pushing ahead with battery storage, Electric Vehicle charging, subsidy free solar PV and wind, in spite of the risks associated with the Covid-19 pandemic, and showing a healthy appetite for new development opportunities.

However, experts have warned that pollution will soon bounce back without some form of climate action and the pandemic eases.

If you’d like to find about more about renewable energy opportunities for land and property owners, get in touch with Clare Davey on 07584 682038 or clare.davey@carterjonas.co.uk.

THE UK ENERGY MARKET

Short-term UK energy markets remained bearish in May as we saw weekend-ahead power prices turn negative for the first time ever. Very high wind levels and low demand led to a surplus in supply and resulted in a record low price of -£2.50/MWh. Day-ahead prices also plummeted for the same reasons, while month-ahead prices pushed to new 13-year lows of just above £23/MWh on expectations of continued low demand levels and oversupply of both gas and electricity. Short-term prices did rebound as system balancing mechanisms kicked in, exports increased, and generators scaled back output. In the meantime, wind output also dropped.
Further out, power prices remained volatile, but we are starting to see a slight upward trend. Prices are finding support from concerns over French nuclear output, which has suffered Covid-19 disruption in the form of further delays to the outage schedule. This has caused supply security nerves in Europe. High gas stock levels, however, are keeping the view bearish for gas markets over the next few months, with summer 2020 prices plummeting. Recent reports put European gas storage sites at 73% capacity compared to 61% at this time last year. October-20 Annual gas prices fell by as much as 7%, with losses getting progressively smaller further out.

The outlook remains one of uncertainty as markets continue to react to a changing global landscape caused by Covid-19. There are early signs of a slight recovery in the longer-term power market, with hopes that industrial and commercial activity will re-surge across Europe towards the end of the year and bolster demand. In the short-term, however, prices are likely to remain stable to bearish as we head into the summer season.

Any businesses interested in advice on how the current situation will impact their energy contract and/or Power Purchase Agreement (PPA), should get in touch with Helen Melling, Energy Specialist at Carter Jonas.

In other news

The publishing of the Energy White Paper is likely to be pushed back further, after initially being planned for summer last year. BEIS announced it will now not be publishing the White Paper this summer as planned, with autumn looking more likely. Covid-19 has been stated as the cause, as UK Government focus has prioritised economic recovery. There have been calls for low carbon and climate-resilient infrastructure to be at the heart of the UK Government’s economic rebuild to tackle climate change.
Ofgem is to end double charging on battery storage which helps improve the deployment landscape for storage projects. Previously, storage assets had to pay balancing charges on both the power they import and the power they export; from now on, the charge will only apply to power exported. The move finally puts the technology on more of a level playing field with other typical generation types such as solar and wind. The UK Government also announced plans to remove barriers for demand-side response and battery storage to compete in Capacity Market auctions, including reducing the minimum capacity threshold from 2MW to 1MW.
South Somerset District Council’s (SSDC) 25MW battery storage facility is now fully energised and operational. The £9.8m of investment located near Taunton will offer balancing services to the grid, providing electricity during low wind and solar generation. The investment is the largest UK local authority investment in energy storage to date in a time when a growing number of local authorities are looking to invest in renewable and energy storage projects. Carter Jonas are currently advising several local authorities on similar investment opportunities.
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Helen Melling
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Helen is an Energy Specialist based in our Leeds office.

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