24/07/2024
Welcome to our July 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 new government outlined in the King’s Speech a raft of changes aimed at delivering an accelerated path to clean energy by 2030. Announcements included doubling onshore wind, tripling solar power and a fourfold increase in offshore wind.
Underpinning this will be:
· proposed reform and investment in planning
· an Energy Independence Act which will establish a framework for energy and climate policy
· GB Energy - a publicly owned clean power company headquartered in Scotland, with a budget of £8.3 billion over the next parliament and a remit to “own, manage and operate” clean power projects
· the establishment of a National Wealth Fund which will invest £7.3bn to target industries of the future which will include clean tech such as hydrogen.
· Sustainable Aviation Fuel – (Revenue Support Mechanism) Bill
However, leading energy analysis company, Cornwall Insight, commented in The Guardian that while these swift actions are very encouraging, further investment would be needed to remove fossil fuels from the power generation system and that a “step change” is needed to close the renewable investment gap.
It notes that to achieve the government’s renewable energy goals “would be a substantial challenge because of a combination of funding constraints, supply chain problems, limited port capacity and the need to build many more links into the National Grid.”
It is further of note that the new government’s focus on accelerating the energy transition has been launched against the backdrop of the latest Climate Change committee’s report (released this month) which clearly set out that the country is not on track to hit its target to reduce emissions in 2030 by 68% compared to 1990 levels.
Undoubtedly the changes announced by the new government are very encouraging for the renewable energy industry. However, it will be interesting to see the detail of the proposed reforms and the impact they have on the major challenges the UK needs to overcome to achieve its Net Zero commitments.
Overview Quick Links
Carbon Capture Storage / Usage
Bills from the King’s Speech
Great British Energy Bill - A Bill will be introduced to set up Great British Energy, a publicly owned clean power company headquartered in Scotland, which will help accelerate investment in renewable energy such as offshore wind.
The Crown Estate Bill - This Bill will modernise The Crown Estate by removing outdated restrictions on its activities, widening its investment powers and giving it the powers to borrow in order to invest at a faster pace. That includes vital marine investment needed to accelerate and quadruple offshore wind capacity by 2030 as part of the Government’s clean power mission.
Sustainable Aviation Fuel (Revenue Support Mechanism) Bill - This Bill will support sustainable aviation fuel (SAF) production in the UK by providing revenue certainty to encourage investment in the construction of SAF plants across the UK.
Water (Special Measures) Bill - The Water (Special Measures) Bill delivers on Labour’s manifesto commitment to put water companies under tough special measures by strengthening regulation and begin the work of cleaning up our rivers, lakes and seas.
National Wealth Fund Bill - A National Wealth Fund Bill will establish the National Wealth Fund, an investment fund that will combine public and private investment to fund development in key sectors, such as green hydrogen, green steel, gigafactories, ports and industrial decarbonisation.
The background briefing notes on the Bills can be found here.
Solar
Labour manifesto pledges
- More than triple solar power to 50 GW
- Invest in rooftop solar on social housing projects
- GB Energy will offer co-investment opportunities for the private sector in solar farms
What’s been delivered so far?
UK Government approves three major solar farms
Edie 15 July 2024
The Department for Energy Security and Net-Zero has granted planning permissions for the construction of three major solar farms in the east of England, in a bid to decarbonise UK’s electricity system by 2030.
Carbon Capture Storage / Usage
Labour manifesto pledges
- Invest in carbon capture and storage, hydrogen, and long-term energy storage to ensure that there is sufficient zero emission back-up power and storage for extended periods without wind or sun, while maintaining a strategic reserve of backup gas power stations to guarantee security of supply
- £1 billion to accelerate the deployment of carbon capture
Net Zero
Labour Manifesto pledges
- One of Labour 5 missions is to Make Britain a clean energy superpower to cut bills, create jobs and deliver security with cheaper, zero-carbon electricity by 2030, accelerating to net zero
- Ed Miliband outlined his priorities for the department in a message to staff following his appointment as Secretary of State for Energy Security and Net Zero on 5 July 2024
- Labour’s manifesto for the 2024 general election included a commitment to introduce a “Energy Independence Act”, legislation which would establish a framework enabling the UK to become “a clean energy superpower”
- A new Energy Independence Act will establish the framework for Labour’s energy and climate policies
- Get new nuclear projects at Hinkley and Sizewell over the line, extending the lifetime of existing plants, and backing new nuclear including Small Modular Reactors
- Labour’s manifesto also included a commitment to establish Great British Energy (GBE). Labour’s manifesto said GBE would be a publicly-owned “clean power” company which would “cut bills for good and boost energy security”. This new company would receive £8.3bn capital investment over the course of the new parliament.
- In addition to the establishment of GBE, Labour said it would work towards the transition away from fossil fuels by issuing no new licenses to explore new oil and gas fields in the North Sea. However, it said it would not revoke any existing licenses
- Labour will maintain a strategic reserve of gas power stations to guarantee security of supply.
- Will ban fracking for good.
What’s been delivered so far?
Business and Trade Secretary gives lift-off to over £100 million for greener air travel
Department for Business and Trade 22 July 2024
Business and Trade Secretary Jonathan Reynolds has announced over £100 million of funding for cutting-edge aerospace research and development projects.
Chris Stark to lead Mission Control to deliver clean power by 2030
Department for Energy Security and Net Zero 9 July 2024
This new Mission Control will be the first of its kind in government, with a relentless focus on accelerating the transition away from volatile fossil fuel markets to clean, homegrown power, to boost Britain’s energy independence and cut bills for the British people.
Sector news
Climate change committee: 2024 Progress Report to Parliament
Climate Change Committee 18 July 2024
This statutory report provides a comprehensive overview of the UK Government’s progress to date in reducing emissions.
UK coal mine fights for future in court
BBC News 18 July 2024
West Cumbria Mining who are planning to build a new coal mine in Whitehaven, Cumbria has fought its case in court, saying it can and will build a “unique” net zero mine. The High Court hearing in London is the first test of a major ruling in June that raised doubts that any new fossil fuel project could be approved in the UK.
New green energy plant could fuel 5,200 homes
BBC News 17 July 2024
A new renewable power facility in Leicestershire could fuel 5,200 homes, Ixora Energy has said.
CMA guidance on marketing green heating and insulation products
Competition and Markets Authority 16 July 2024
Compliance advice for businesses marketing green heating and insulation products to consumers
Net Zero Cities
Labour Manifesto pledges
- Set up the National Wealth Fund, which will create good, well-paying jobs by investing alongside the private sector in gigafactories, clean steel plants, renewable-ready ports, green hydrogen and energy storage
- Upgrade millions of homes with a Warm Homes Plan, so that families have cheaper energy bills permanently, with warm, future-proofed homes
What’s been delivered so far?
New National Wealth Fund to unlock private investment
HM Treasury 9 July 2024
The Government announces new plans to align key institutions under the National Wealth Fund that will boost growth and unlock investment across the green energy sector.
Sector news
West Midlands Investment Zone delivery plan gets green light
Edie 17 June 2024
The green light has been given to a detailed plan for the delivery of a West Midlands Investment Zone, which is expected to attract more than £5.5bn of private investment and around 30,000 new jobs.
Wales develops path to net-zero heat and launches publicly owned renewables developer
Edie 16 June 2024
The Welsh Government has launched a new publicly-owned renewable energy developer with a key focus on onshore wind, and has also published its plans for decarbonising heating for homes and industry using a mix of electricity and hydrogen.
Onshore and Offshore Wind
Labour manifesto pledges
- More than double our onshore wind capacity to 35 GW
- Quadruple offshore wind with an ambition of 55 GW by 2030
- Pioneer floating offshore wind, by fast-tracking at least 5 GW of capacity
- GB Energy will offer co-investment opportunities for the private sector in onshore farms
What’s been delivered so far?
Onshore Wind Industry Taskforce established
Department for Energy Security and Net Zero 19 July 2024
The Taskforce brings together key organisations from government, industry, regulatory and other relevant bodies to drive forward the increases in onshore wind needed to meet 2030 deployment ambitions.
Policy statement on onshore wind
Department for Energy Security and Net Zero 8 July 2024
This policy statement makes revisions to planning policy that place onshore wind on the same footing as other energy development in the National Planning Policy Framework.
Sector News
Renewables firms already planning new onshore windfarms in England
Guardian 9 July 2024
At least six renewables developers have begun identifying potential sites for full-scale windfarms in England after the Labour party swept to power last week with the promise to make Britain a clean energy superpower.
Marine
Labour manifesto pledges
- Labour will put failing water companies under special measures to clean up our water.
- Labour will give regulators new powers to block the payment of bonuses to executives who pollute our waterways and bring criminal charges against persistent law breakers
What’s been delivered so far?
Government announces first steps to reform water sector
Department for Environment, Food & Rural Affairs 11 July 2024
Secretary of State for Environment Food and Rural Affairs Steve Reed has today (11 July 2024) announced a series of initial steps towards ending the crisis in the water sector.
Sector news
All water firms now investigated for sewage spills
BBC News 16 July 2024
All 11 water and wastewater companies in England and Wales are now under scrutiny over sewage spills, after the regulator said it was expanding its investigation.
Ofwat 11 July 2024
£35bn of the expenditure reflects the investment needed to reduce pollution, improve customer service, river and bathing water quality, and deliver greater resilience to the impact of climate change. This is more than a trebling of the level of investment in the 2020 to 2025 period.
Canal company can bring private law claim against United Utilities over sewage, Supreme Court rules
Law Gazette 2 July 2024
The operators of the historic waterway the Manchester Ship Canal can bring a private law claim against the United Utilities over unauthorised discharges of sewage, seven Supreme Court justices ruled unanimously today. The decision, in The Manchester Ship Canal Company v United Utilities Water Ltd overturns High Court and Court of Appeal rulings that no such cause of action was available because of the provisions of the 1991 Water Industry Act, which privatised the sector.
Arctic 'dirty fuel' ban for ships comes into force
BBC News 1 June 2024
A ban on the dirtiest and most climate-damaging fuel for ships has come into effect in Arctic waters.
Heavy Fuel Oil (HFO) is a tar-like, thick but relatively cheap oil that is widely used in shipping around the world, especially tankers.
Work begins to reduce canal sewage spills
BBC News 18 June 2024
Yorkshire Water has launched a £2m project to reduce sewage overflowing into the Huddersfield Broad Canal when it rains.
Electric Vehicles
Labour Manifesto pledges
- Labour will accelerate the roll out of EV charge points, giving certainty to manufacturers by restoring the phase-out date of 2030 for new cars with internal combustion engines, and supporting buyers of second-hand electric cars by standardising the information supplied on the condition of batteries.
Sector news
Evri to invest £19m to expand electric vehicle fleet
Edie 24 June 2024
UK parcel delivery firm Evri plans to invest £19m to treble the number of e-cargo bikes it uses and add 100 electric vehicles (EVs) to its fleet over the next year
Contracts for Difference
Labour Manifesto pledges
- Approve the next round of renewable projects in Contracts for Difference (CfD) auctioning - with an annual £500 million British Jobs Bonus, funnelling investment and creating good jobs in our industrial heartlands and coastal communities
Sector news
Renewable energy developers made to wait for CfD results after appeals lodged
Edie 21 June 2024
Developers will have to wait until early September to discover if their bids have been successful in the latest Contracts for Difference (CfD) allocation round (AR6).
Hydrogen
Labour Manifesto pledges
- £500 million to support the manufacturing of green hydrogen.
- Labour’s National Wealth Fund will directly invest in hydrogen in every corner of the country.
- Double the government's target on green hydrogen, with 10 GW of production for use particularly in flexible power generation, storage, and industry like green steel
- Invest in development of hydrogen technology through GB energy
- North Sea earmarked to play a crucial role to hydrogen transition
Battery Storage
Sector News
New battery plant approved despite fire concerns
BBC News 15 July 2024
A new battery storage power station is set to be built in Slimbridge despite fire-safety and traffic concerns.
The 36-megwatt battery storage facility, along with a 132kV transformer have been approved for land near Kingston Road.
If you would like to discuss any of the issues raised, please contact a member of our energy team.
