YORKSHIRE WATER LAUNCHES SOLAR PV DEVELOPMENT FRAMEWORK

The framework covers the development of solar PV across 150 Yorkshire Water sites to generate electricity under a long-term private wire PPA, with any surplus generation exported to the grid. Once the sites are operational it is estimated the electricity generated could reduce energy costs and save approximately 6,000 tonnes CO2 equivalent per year. Carter Jonas is pleased to have assisted Yorkshire Water with the feasibility assessment and solar modelling for the sites. Bidders have until 22nd July to submit their requests to participate in the framework.

BEIS ANNOUNCES £80M INVESTMENT TO HELP REDUCE CARBON EMISSIONS

The Department for Business, Energy and Industrial Strategy (BEIS) has announced an £80 million investment to help reduce carbon emissions from energy intensive industry and homes. Energy Minister Kwasi Kwarteng said the aim is to “propel the UK towards a stronger, greener future” whilst also helping to “save people money on energy bills and protecting jobs in heavy industry”.

THE UKS LARGE-SCALE SOLAR PIPELINE BREAKS THE 9GW CAPACITY MARK

New subsidy free solar sites are being identified or planned at a rate of 10 to 20 per month since the start of 2019 which is typically adding 500MW of new capacity every month. A third of the action is taking place in the East Midlands and Eastern regions, however developers are looking increasingly at the North of the country and into Scotland. The Carter Jonas Energy Team is currently advising on over 2GW of solar pipeline. Amy Nolan, Partner, says “the growing subsidy free solar activity is encouraging, and the latest statistics demonstrate the financial viability and energy generation potential of large-scale subsidy free solar projects in the UK.”

UK ENERGY PRICES SHOWING SIGNS OF RECOVERY AS DEMAND RISES

Gas and electricity prices jumped in June and into the start of July, reaching their highest levels since January 2020. A further easing of lockdowns in the UK is expected to lift power usage further, however, concerns of a second Covid-19 wave in Europe are likely to keep energy markets in check in the coming months.

ZERO AND LOW CARBON PROPERTY DEVELOPMENT IS ESSENTIAL FOR THE UK’S FUTURE

The construction industry has often been used as a tool to help drive economic recovery by providing local jobs and building new infrastructure for other businesses. With the UK declaring a climate emergency in 2019, alongside a commitment to achieve Net Zero Carbon by 2050, this push in new property development must now be focused on incorporating zero or low carbon technologies.

  1. On the 25th of June 2020 the UK Government’s statutory adviser, the Committee on Climate Change (CCC), published its progress report on reducing UK emissions. The content highlights five clear investment priorities.
  2. Low-carbon retrofits and buildings that are fit for the future
  3. Tree planting, peatland restoration and green infrastructure
  4. Energy networks must be strengthened
  5. Infrastructure to make it easy for people to walk, cycle, and work remotely
  6. Moving towards a circular economy

Top of the list is the low-carbon retrofits and buildings that are fit for the future. The report states: “for the long term, the UK must invest in key assets to build capacity and enable productive activity in the future. This means investing in climate-resilient low-carbon infrastructure, job creation in low-carbon and climate-resilient industries, training and reskilling of the workforce.” The report also goes on to state that the phasing out of new installations of gas boilers by 2025 with The Buildings and Heat Strategy, due later this year “must take low-carbon heating from a niche market in the UK to the dominant form of new heating installation by the early-2030s.”

The incorporation of low and zero carbon technologies into existing buildings to improve their carbon, energy, heating and water efficiency where possible, must have equal focus alongside new developments. A suggestion within The Buildings and Heat Strategy is that a ‘green energy passport’ for existing homes and Local Energy Plans could be rolled out across the UK over the next few years to try and encourage uptake of these technologies.

Essentially the requirement for the UK to achieve its Net Zero carbon target are unchanged by the Covid-19 pandemic. The focus on development of low carbon retrofits and new infrastructure investments will help the UK economy recover after the pandemic whilst also keeping the UK on track to meet the Net Zero carbon target of 2050.

The low and zero carbon technologies, including biomass, solar panels, heat pumps, wind turbines, battery storage and gas combined heat and power (CHP) are proven technologies providing positive sustainable, operational and financial results. Each of the technologies offers domestic and commercial installations, depending on the development requirements.

With an environmental emergency being announced before the Covid-19 pandemic started, and the noticeable environmental recovery during the UK’s lockdown in 2020, we must utilise this awareness and continue to aim for sustainable options and to invest in better buildings for the future.

The Energy team at Carter Jonas has specialist experience of the development of low and zero carbon projects, either stand-alone or property-integrated. The team can offer advice to residential or commercial developers who would like to explore low or zero carbon energy opportunities, either to generate on-going revenue streams, meet planning or regulatory requirements, or to boost a project’s sustainability credentials.

If you would like further information about low and zero carbon energy opportunities please contact Tom Hilton on 07917 211 253 or tom.hilton@carterjonas.co.uk

THE UK ENERGY MARKET

A sharp drop in wind generation in the first half of June along with a complete drop in imports through all interconnectors reinforced a rally in prices. Day-ahead power pushed above £32/MWh for the first time since late March when the lockdown started. Meanwhile Weekend-ahead prices, which were negative just a few weeks ago) also rose to £23/MWh. However, improving wind output towards the end of the month tempered the price recovery.
Winter 2020 prices rallied from £42/MWh to £46/MWh and October 2020 Annual price from £39.7MWh to £43.5MWh. The gains have been helped by a general increase in markets, with gas, oil, coal, continental electricity and emission prices all rising and filtering through to support UK power prices. The easing of lockdowns across much of Europe has also contributed as demand forecast for the remainder of 2020 improves.

Prices are likely to remain highly variable over the coming months given fears of a second wave of COVID-19 in Europe especially when we enter the winter season. This could temper price rises over the summer.

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

Last week’s economic update included the announcement of a new ‘Green Home Grant’ scheme worth £2bn which entitles homeowners to vouchers of up to £5,000 for home insulation improvements, starting in September. The eligible improvements are likely to include boilers, double glazing, energy saving light bulbs and insulation. The chancellor Rishi Sunak said the scheme forms part of a wider £3bn investment plan in green technology to cut carbon emissions.
Statistics released by the Department for Business, Energy and Industrial Strategy (BEIS) show that almost half of the UK’s power was generated by renewables in the first quarter of 2020. High output from wind farms was the main contributor to the record 47% output share which is an increase from 35.9% in the first quarter of 2019.
A £15/MWh Balancing Services Use of System (BSUoS) costs price cap has been introduced by following soaring forecast prices. The move came after National Grid ESO’s forecast from 15th May, which identified an additional £500 million increase in the cost of managing the electricity transmission systems because of the impact of Covid-19. The cap will help businesses and generators cope with the increased balancing costs caused by reduced demand since the start of lockdown.
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Helen Melling
Senior Energy Specialist
0113 426 9868 email me about Helen
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Helen is a Senior Energy Specialist based in our Leeds office.

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