Government announces ambitious plans for wind power in Britain

UK Prime Minister Boris Johnson has pledged to power every home in the UK with offshore wind energy by 2030, also stating his intention to use the current societal climate as a catalyst for green growth. The proposal intends to create 2,000 jobs in construction and support 60,000 more, and seems to be a positive step forward for the renewable sector in the UK. However, some industry experts posit that a higher figure than the Prime Minister’s initial proposed investment of £160 million may be required in order to attain the new target of 40GW offshore wind generation.

Encouraging signs for the expansion of the UK EV charging market

Following last month’s inaugural World Electric Vehicle Day, further development in the UK industry has come in the form of Police Scotland, who have signed a ground-breaking deal for 1,000 EV chargers this month, worth up to £21 million. The chargers are a key part of their intention to make Police Scotland the UK’s first ultra-low emission blue light fleet by the year 2030. Bus2Grid, the world’s largest vehicle-to-grid project, got underway this month as a North London bus garage was transformed into a ‘virtual power station’. With nearly 100 new zero-emission electric buses housed at the facility, it could hold the key to future decarbonisation of public transport in the UK.

Carter Jonas’ Energy Team expands further

We are pleased to welcome Jake Copsey to the Energy Team this month. Jake has previous experience working at an energy supplier and has been brought in to help expand the Carter Jonas Energy Brokerage service.

KEY ANNOUNCEMENT

Carter Jonas hits milestones of over 600MW of projects in a month including:

  • Exchange of agreements on:
    • 100MW of battery energy storage;
    • 110MW of Gas Peak Power Generation
    • 203MW of solar farm development
  • Heads of Terms for a further 200MW+ of subsidy free solar

DON’T MISS THE ELECTRIC VEHICLE REVOLUTION – A GUIDE FOR LANDOWNERS

September 2020 produced some key developments in the world of electric vehicles (EVs). September 9th saw the first World EV Day. This was billed as a simple yet effective concept, its purpose - “Celebrating EV ownership, worldwide.” To mark the occasion, Transport Secretary Grant Shapps announced £12 million in funding to propel ground-breaking EV research. Later in the month, official figures released by the Department for Transport (DfT) revealed that sales of green cars have jumped above diesel for the first time. The figures show that 33,000 pure electric and hybrid vehicles were registered between April and June. This compared with 29,900 types of diesels. According to the DfT, this was the first time over three months that more alternative fuel cars than diesel cars had been registered. 

Background
These events come at a time when the Government is looking to advance measures to ensure that all new cars and vans are ultra-low emission.

In February 2020, the Government announced plans to bring forward the end to the sale of new petrol, diesel and hybrid cars and vans from 2040 to 2035, or earlier if a faster transition appears feasible. A consultation that was launched on the matter ended on July 31, and many MPs are now applying significant pressure for this target to be advanced to as early as 2030, for the UK to align with other countries within Europe.

Despite the headlines, there are over 30 million cars on UK roads, and Battery Electric Vehicles (BEV) and Plug-in Hybrid Electric Vehicles (PHEV) make up only a small proportion of this amount. Nonetheless, due to advancements in technology and Government support, sales are rising, with a five-fold increase in EV market share in 2020 versus 2019.

However, growth in the EV market produces a selection of issues. To serve the escalating numbers of EVs already on the road, and the future targets, a step-change in the availability of charging infrastructure is required. Whilst 60-70% of charging is expected to take place at home, not everyone has access to a dedicated parking space. It is estimated that at least 20-30% of charging is likely to occur at the workplace or visitor attractions, and 10% on the road network at electric filling stations.

These considerations present a wide range of opportunities for landowners and developers, including local authorities, looking to share in the profits from EV charging. 

Technology
Dwell time is key to identifying the right charger capacity for any site. There is a range of charging technology infrastructure available, ranging from 3kW to 350kW. These can charge vehicles from empty to full between 30 minutes and 12 hours depending on the EV battery size. Lower capacity infrastructure charges over a longer period. Higher capacity infrastructure, that provides a speedier way to top up, is typically found on motorways and A-roads. Whilst higher-capacity charging provides a faster solution, the cost of the charge point is much greater than those producing charge over a longer period. Faster charging stations also require additional grid infrastructure, and this is often competing with other sources of demand or generation on the same constrained network. 

Opportunities
The range of different models available include options where provision is left to private businesses. Here the commercial outlay will be taken on by the private firms with the benefit that the local authority exposure is minimal. There is also the potential for charging infrastructure to raise revenue for councils.

There are three distinct categories: Roadside (electric filling station); workplace and visitor attractions and residential / commercial development.

  • Electric filling station

Also known as an electric vehicle filling station, or EV filling station, this is essentially a 21st-century filling station, offering ultra-rapid charging, with an ability to charge a full vehicle battery from empty within 30 minutes. As is the case with a more typical motorway service area, additional provisions for food and drink, groceries and meetings will be available.

Suitable sites are between 0.5 and 2.5 acres, require road frontage adjacent to the strategic highway, with over 25,000 vehicle movements, have an appropriate grid connection and limited planning constraints on or adjacent to the site. There are often renewables, including solar PV and battery storage, on-site or adjacent to reduce the site's reliance on the National Grid at peak times and to ensure the security of supply. 
Landowners could expect to receive up to £100,000/annum to lease the land to a developer over a 20-30-year term, whilst also contributing to Corporate Social Responsibility (CSR) goals and futureproofing the road network for a dramatic increase in EVs year on year. 

  • Visitor attraction

This type of charging relates to dedicated parking spaces for staff or customers, offering fast or rapid charging, with an ability to charge a full vehicle battery in 1 to 4 hours.

Suitable sites are those with parking for staff, fleet vehicles or visitors. Examples include fast food and coffee outlets, leisure, retail parks, theme parks, supermarkets, offices, and commercial buildings.

Landowners could expect to receive between £1,500 and £5,000/space/annum over a 20-year term, whilst futureproofing / diversifying their business and staying ahead of the game versus their competition, attracting a greater number of visitors. Again, the implementation of EV charge points would likely assist in meeting CSR objectives.

  • Residential / commercial development

These are slower chargers fitted on driveways, residential streets and within commercial property developments, to charge when at home (typically overnight) or business premises. Local planning authorities often require the installation of EV charging within new residential developments. Slow chargers can charge a battery from empty in around 12 hours.

Any residential or commercial property development is viable provided there is sufficient grid capacity on-site, including large employers, companies with large EV fleets, hotel chains and multi-storey car parks.

Landowners can expect to achieve charging at a reduced rate, paying more like 14p/kWh versus up to 35p/kWh charging en-route. Furthermore, grants are available to encourage the implementation of charging especially on new housing and commercial developments where there is a planning condition for this to be implemented.

Many landowners and businesses are already considering the prospects of the EV market. As well as presenting an opportunity for income generation, the additional benefits are clear. However, competition for grid connection is as rife as ever, as more large-scale generation connects to the network across the UK. Couple this with there being a finite number of opportunities in strategic locations means that those acting on the opportunity quickly will gain a ‘first-mover advantage’.

To find out more or to discuss a potential opportunity please contact Clare Davey on 07584 682038 or clare.davey@carterjonas.co.uk.

THE UK ENERGY MARKET

Day-ahead price reached a 19-month high on the 15th September, spiking above £57/MWh as daily wind output dropped from 9GW to less than 0.8GW, while demand rose. Prices did recover shortly after this but remained highly volatile for the rest of the month. Growing concerns over future demand reductions in the UK placed a bearish outlook on the UK power market in the short and long-term, for example December 2020 prices fell almost £1/MWh.
Prices were largely torn between fluctuating carbon prices and concerns over tight gas supply margins as we head into the winter months. As with short-term prices, the end of September saw a drop over concerns that a second wave of COVID-19 will significantly dimmish UK power demand over winter.

We forecast that instability is likely to remain in the coming months in light of the ever-changing global situation.

Any businesses interested in advice on how current markets will impact their energy contract and/or Power Purchase Agreement (PPA) should get in touch with Helen Melling, Energy Specialist at Carter Jonas on 07467 335587 or helen.melling@carterjonas.co.uk.

Power Market Report (six month-summary)

Source: EDF Market Insight

In other news

Battery storage revenues hit an all-time low in August 2020, but they are forecasted to soar to more than £100,000/MW/year as a result of a rising number of available revenue streams and large trading and regulatory changes forecasted in 2021. Asset owners are encouraged to utilise an experienced trader to capture and optimise available revenue streams; particularly as these revenue streams are forecast to increase significantly in number over the next few years.
Plans to ban the sale of new fossil fuel vehicles are expected to be brought forward from 2035 to 2030 to help accelerate the rollout of EVs across the UK. The announcement is expected alongside the long-awaited Energy White Paper which the Government last week said will finally be published this autumn.
80% of the proposed power will come from local generators, and the remaining 20% from across the UK. The project is also seen by the university as a means of involving both its students and management with the emissions reduction targets that the institution has.
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Helen Melling
Senior Energy Specialist
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Helen is an Energy Specialist based in our Leeds office.

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