27/08/2024
Welcome to our August Energy Matters Newsletter.
The energy sector is a rapidly changing market with daily updates on technological advances, regulatory reviews, policy updates, funding decisions. In each edition of our Energy Matters Newsletter, we aim to provide a user-friendly, summary update of some of the key issues we are seeing across the renewable energy and resource management sectors.
If you would like to discuss any of the issues raised, please contact a member of our energy team.
Energy Spotlight
The Budget for Contracts for Difference Allocation Round 6 (AR6) has been increased to £1.555 billion, which is an overall increase of £530 million. This is the largest-ever budget for clean energy projects in the UK and it is hoped it will accelerate the delivery of new green infrastructure.
It includes £1.1 billion earmarked for offshore wind - which has more budget available than all of the previous auctions combined.
Following the increase, the Allocation Round 6 (AR6) budget includes:
· £1.1 billion for offshore wind, an uplift of £300 million
· £185 million for established technologies such as onshore wind and solar, an uplift of £65 million
· £270 million for emerging technologies such as floating offshore wind and tidal, an uplift of £165 million
In this auction the maximum strike price for this auction are as follows:
· offshore wind £73/MWh
· onshore wind £64/MWh
· solar £61/MWh
· floating offshore wind £176/MWh
· geothermal £157/MWh
· tidal £261/MWh
The increase means the AR6 budget is 7 times higher than that of Allocation Round 5 (AR5).
We also saw recently the first inaugural meeting of the Onshore Wind Taskforce which brings together industry experts to accelerate the development of onshore wind across England.
These measures, combined with the government's launch of Great British Energy, and the policy statement on onshore wind to revise the planning policy - are a strong signal of the government’s strategy and a significant boost to the renewable energy industry.
Overview Quick Links
District Heating
UK reaches 250,000 heat pump installations
Edie 20 August 2024
The UK has achieved a milestone of 250,000 certified heat pump installations, bringing it closer towards its goal of installing 600,000 electric heat pumps annually by 2028.
Hydrogen
Octopus backs £4.6m funding round for sailing vessels that produce renewable hydrogen
Edie 19 August 2024
British clean tech startup Drift Energy has secured £4.65m worth of seed capital from Octopus Ventures to develop sailing vessels that will create green hydrogen at sea using deep ocean wind.
Electricity
Electric 'superhighway' approved between Scotland and England
BBC News 13 August 2024
A multi-billion pound subsea cable that can shift vast amounts of renewable electricity between Scotland and England has been given the go-ahead by regulators.
Net Zero
Ofgem announce new approach to Strategic Innovation Fund to drive progress to net zero by 2030
Ofgem 19 August 2024
Ofgem has announced the introduction of a new process which gives innovators more opportunities to apply or re-apply to the Strategic Innovation Fund (SIF) and gain funding quicker than ever before.
ESG ratings agencies to be regulated in UK, new Government confirms
Edie 9 August 2024
Legislation aimed at stopping greenwashing by firms that rate how sustainable investments are will be picked up as a priority by the newly-elected UK Government, it has been confirmed.
Ofgem launches consultation on Regional Energy Strategic Plan policy framework
Ofgem 30 July 2024
The Regional Energy Strategic Plan (RESP) will enable the coordinated development of the energy system across multiple vectors, provide confidence in system requirements and enable network infrastructure investment ahead of need. Ultimately, this will support the energy system’s transition to net zero in a cost effective manner
Record breaking funding for clean energy in Britain
Department for Energy Security and Net Zero 31 July 2024
Government announces budget of over £1.5 billion to deliver homegrown clean energy projects and boost UK's energy security.
Ofgem to encourage flexible use of cheap off-peak energy
Guardian 29 July 2024
Ofgem is pushing ahead with plans to make it easier for British homeowners to reap the benefits of using electric car chargers and heat pumps at non-peak times, as the grid becomes more reliant on wind and solar power.
Department for Energy Security and Net Zero 26 July 2024
The Secretary of State for Energy Security and Net Zero met with COP leaders in London to discuss the need for greater urgency in tackling the climate crisis.
Introducing Great British Energy
Department for Energy Security and Net Zero 25 July 2024
Great British Energy will be a publicly-owned energy company, designed to drive clean energy deployment, boost energy independence, create jobs and ensure UK taxpayers, billpayers and communities reap the benefits of clean, secure, home-grown energy.
Capacity Market 2023: Phase 2 proposals and 10 year review
Department for Energy Security and Net Zero 22 July 2024
The Department for Energy Security and Net Zero has published the public feedback and government response to its two-part consultation addressing phase two reforms and a ten-year review of the Capacity Market.
Net Zero Cities
‘Retrofit mortgages’ and social housing finance to help UK homes cut carbon and energy bills
Edie 15 August 2024
A consortium including NatWest, British Gas and Places for People is piloting a new financial model to provide 1,000 social homes with energy efficiency retrofits and low-carbon heating. At the same time, London-based mortgage lender Perenna is offering discounted rates to buyers who pledge to reduce their home energy emissions.
Onshore and Offshore Wind
New Great British Energy partnership launched to turbocharge energy independence
Department for Energy Security and Net Zero 25 July 2024
Prime Minister Keir Starmer and Energy Secretary Ed Miliband announce first major partnership between Great British Energy and The Crown Estate to unleash billions of investment in clean power. The Crown Estate estimates this partnership will lead to up to 20-30GW of new offshore wind developments reaching seabed lease stage by 2030, enough power for the equivalent of almost 20 million homes.
Contracts for Difference
Contracts for Difference (CfD) Allocation Round 6
Department for Energy Security and Net Zero 31 July 2024
The budget for CfD Allocation Round 6 (AR6) has been revised. The final budget for AR6 is £1.555 billion, which is an overall increase of £530 million. This is an increase of £65 million in pot 1, £165 million in pot 2 and £300 million in pot 3.
If you would like to discuss any of the issues raised, please contact a member of our energy team.
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