Public Sector Energy Editorial 10 November 2015

An analysis of the local authority energy market and the latest developments around the UK.


Policy & Strategy

We are now only weeks away from the Intergovernmental Conference (COP 21) in Paris, which starts at the end of November. The press has started to run more material on climate change as a result and a golden opportunity exists to educate the public in the UK on this crucial subject. Yesterday, the BBC ran the story that the global temperature has now reached half of the level that scientists say is safe for global warming (2 degrees Celcius above pre-industrial levels).

Jamie Hailstone also reports on a new report last week suggesting that renewable energy supply is set to double in eight major economies by 2030. Such positive news is helpful ahead of the Paris Summit and to keep the focus on Governments more positive than our own on what renewables can deliver and therefore how they should be supported.

Turning to the UK, in last week’s editorial I mentioned George Osborne’s distrust of DECC and indicated that he sees the major investment going through the new Infrastructure Commission, which has a specific energy element.

Solar Power Portal also develops this story: http://www.solarpowerportal.co.uk/news/osborne_pledges_100_billion_infrastructure_spend_as_energy_shares_3478

And on the subject of DECC, Amber Rudd appeared before the House of Commons Energy and Climate Change Committee last week to discuss DECC’s Annual Report and Accounts. The Parliament website gives details of this and TV recording of the proceedings.

As well as the Secretary of State for Energy and Climate Change, there was Stephen Lovegrove, Permanent Secretary and Accounting Officer and Angie Ridgwell, Director General, Finance and Corporate Services at the Department for Energy and Climate Change giving evidence:

http://www.parliament.uk/business/committees/committees-a-z/commons-select/energy-and-climate-change-committee/news-parliament-2015/decc-annual-report-accounts-evidence-15-16/

As well as the creation of the Infrastructure Commission, other policy areas in the news this week include the decision to remove tax exemption benefits from community energy schemes (considered in community energy below) and the continuing drama over financial incentives (considered under Finance & Legal below).

Jeremy Leggett’s latest book ‘Winning the Carbon War’ is being released in instalments, and the latest has just been released. I am roughly half way through the text, which is a personal and interesting insight into the battle for renewables.

The final book can now be ordered for £9.99 and is published just after Xmas. The last instalment is in relation to the Intergovernmental Conference in Paris starting later this month. It can be ordered here:

http://www.solar-aid-eco-shop.co.uk/collections/products

Solar PV

As this week sees the Solar UK conference on 12 November at BRE in Watford, the news on solar PV deployment is positive. As Finlay Colville reports in Solar Power Portal, a whopping 317 MW has been installed in the third quarter of 2015, with more to come in the final quarter. This means that the UK has now exceeded 9 GW in total:

http://www.solarpowerportal.co.uk/editors_blog/uk_installs_317mw_in_q315_first_9_months_of_2015_exceeds_3gw_and_9gw_4352

At the Solar Energy UK conference held at the NEC recently, I gave a talk on the position with local authorities and solar PV. Afterwards, I was asked to give an interview to Solar Media, who organised the event, and to explain in more detail the ‘medium term strategy’ that we are now working to. Here is a video clip of that interview from Solar Power Portal:

http://www.solarpowerportal.co.uk/news/local_authorities_not_giving_up_on_solar

And back on the domestic front, the deal between IKEA and Hannergy has come to an end and is not to be renewed. The company has had substantial problems this year, as explained by Solar Power Portal:

http://www.solarpowerportal.co.uk/news/ikea_pulls_plug_on_hanergy_solar_deal_after_three_years_3621

It is not clear what IKEA’s position will be moving forwards, but presumably it will want to keep selling solar PV for domestic households.

There is also news from Jamie Hailstone this week about solar PV decisions in Havering LBC, Cheshire East Council, Dorset County Council and Taunton Deane Borough Council. Many of these are trying to beat the changes to FITs to ensure the current high levels of Government support.

Wind Power

In this week’s news, Jamie Hailstone reports on the first floating wind farm to be developed off the coast of Peterhead in Scotland. Last week I reported on the concept of the floating solar farm, but these are usually on inland waterways and reservoirs. The notion of a floating wind farm is completely different, being able to be deployed in much deeper offshore waters, where traditional construction of a wind farm would be difficult. However, weather conditions in some of these places may be a real problem. But the good news is that the UK is in the lead on these developments.

Biomass

Jamie Hailstone reports on plans by East Hampshire DC to create a series of wood burning centres, using biomass. I had said recently that the biomass market was largely in suspension, awaiting the results of the RHI review, which are expected in the Comprehensive Spending Review on 25 November 2015. So this is a welcome story.

Hydropower

A community hydropower scheme on the Thames in Abingdon has been scrapped. The community group responsible for the project, which has already gained planning consent and a licence from the Environment Agency blamed a combination of changes to FIT rates and the removal of tax benefits for community schemes.

This is the reality of Government policy: changes are made and they have deep implications. Here, the removal of pre accreditation would mean that there would be no certainty as to the rate of FIT that would apply when the project was finally constructed. And the tax benefits would also be gone, if the current proposals (discussed below in Community Energy) are brought into effect. As I have said before uncertainty kills projects and here is the evidence:

http://www.bbc.co.uk/news/uk-england-oxfordshire-34718970

Energy Efficiency and Buildings

A survey has shown that the vast majority of people support subsidies for energy efficiency programmes. Next Energy News reports:

http://www.nextenergynews.co.uk/news/energy-saving/eciu-survey-shows-substantial-public-support-for-efficiency-subsidies-1243

Green Deal & ECO

In a Parliamentary Select Committee considering evidence on energy efficiency, it was said that the Green Deal had become ‘toxic’ before it was recently ended by the Government. That does not mean, said Philip Sellwood from the Energy Saving Trust, that it did not have some success.

Next Energy News reports:

“Sellwood did however conclude that the programme was too focused on selling itself as a financial package, and that this had resulted in its overall aim – of furthering the deployment of energy efficiency technologies to more low-income households – of being lost amidst mixed messages.”

http://www.nextenergynews.co.uk/news/energy-saving/toxic-green-deal-had-run-its-course-select-committee-panel-claims-5373

Finance & Legal

The Solar Trade Association reports that the Renewable Obligation consultation response now appears likely to be released at the same time as the FIT consultation response, as DECC considers that the two responses are linked.

Its latest news to members considers the Feed-in-Tariff issue in more detail:

“There have been in excess of 50,000 responses, with 2,500 responses providing specific suggestions and evidence. These will all need full consideration and review and it is unlikely that a FIT response will be provided before Paris (30 Nov - 13 Dec), and unlikely (politically) during Paris. There is a small window before Parliamentary Christmas recess on the 17 December, but releasing consultations is not likely to happen during recess.

The next opportunity for the response would therefore be from the 5 January. Note the requirement to lay the Order before Parliament for 40 days before being implemented. It is unclear whether a possible "pause" of the scheme could be implemented before the end of this 40 day period.”

Completing the set of financial incentives news, we understand that it is DECC’s intention is to provide further clarity on further CfD auctions before the end of the Autumn. This might happen on or after the Comprehensive Spending Review, which is scheduled for the 25 November, but could be as late as the 17 December.

The STA have produced two excellent summaries of the position in relation to the financial incentives and these can be found here.

FITs:

http://www.solar-trade.org.uk/wp-content/uploads/2015/11/STA-Timeline-Feed-in-Tariff.pdf

RO and CFDs:

http://www.solar-trade.org.uk/wp-content/uploads/2015/11/STA-Timeline-RO-CfDs.pdf

Of course, if the new FIT rules do not come into force before 1 January 2016, then there will be a planned degression under the old rules. OFGEM has now published the new rates that will be applicable and this is the solar PV table:

https://www.ofgem.gov.uk/sites/default/files/docs/2015/10/fit_payment_rate_table_for_publication_1_january_2016_pv_tariffs.pdf

Planning

Hambleton District Council in North Yorkshire has approved two more solar farms, with capacities of 50 MW and 27 MW respectively. Solar Power Portal reports on the District Council’s positive approach to solar PV:

http://www.solarpowerportal.co.uk/news/hambleton_district_continues_strong_solar_association_with_77mw_8911

Electric Vehicles & Transport

Some areas in the United States have introduced annual registration fees for EVs. These are special payments by drivers of electric vehicles, with the relevant States claiming that such drivers do not pay their share of the costs of upkeep of the roads, as this is funded via tax on fuel sales. Green Car Reports says that no one pays their fair share on this analysis:

http://www.greencarreports.com/news/1100816_electric-car-drivers-dont-pay-their-share-actually-no-one-does

Three in every four EVs sold in the UK is a Nissan Leaf and I know that many local authorities have bought one or more Leafs, either to test or to undertake suitable civic mileages and duties. I myself also have a Leaf, my second vehicle following an earlier upgrade of the battery.

The battery in the models we all have is 24 kw, but Nissan is now working on a 60 kw battery that will give much higher mileage ranges, perhaps up to 300 miles. I have often said that if the Leaf could do 200 miles it would transform its sales.

We will not see the new battery pack until 2017 at the earliest but my estimation would be that this car would be capable of most civic duties currently undertaken by petrol or diesel varieties and so will enable more local authorities to move strongly down the EV route. Here Green Car Reports gives us the details:

http://www.greencarreports.com/news/1100775_nissans-60-kwh-200-mile-battery-pack-what-we-know-so-far

And well-known EV charging point manufacturer Pod Point is seeking to raise equity through crowd funding. Despite having already shipped over 20,000 charge points and supplied over 10 million miles of electric motoring in the UK it is seeking to expand. According to the company, progress so far is just a fraction of what we need to get the UK fully wired up for mass adoption of electric vehicles.

It is therefore crowd funding a target of £1.75m to help it achieve its mission of putting “a POD Point everywhere you park for an hour or more.” It is seeking to raise the money from the public. Details are here:

https://www.crowdcube.com/investment/pod-point-electric-equity-20725?utm_source=%40Home+Customers+Master+List&utm_campaign=0c195856c7-Crowdfund_Launch_Homecharge_Database_11_6_2015&utm_medium=email&utm_term=0_93f8aa3a5b-0c195856c7-243436001

Energy Storage

Energy storage is coming under increased scrutiny, particularly to see why it is not developing as quickly as needed. One particular issue that has been raised is in relation its regulation.

But this is not just a UK problem. Here Energy Post runs an excellent article by three consultants from an EU company called SQ Consult and they argue that the EU does not have a level playing field when it comes to storage. The piece does explain quite well what the issues are with storage as part of its analysis:

http://www.energypost.eu/bottlenecks-energy-storage-europe-address/

And in another piece, also in Energy Post, Ramez Naam considers how cheap storage could become:

http://www.energypost.eu/cheap-can-energy-storage-get-pretty-darn-cheap/

Meanwhile, the largest company in the German domestic storage market - Sonnenbatterie - has launched into the UK storage marketplace. As there are now 750,000 domestic solar PV systems in operation under Feed in Tariffs, this is a sensible move:

http://www.solarpowerportal.co.uk/news/germanys_sonnenbatterie_launches_into_uks_solar_plus_storage_market

Grid

The Green Alliance published a blog on 3 November 2015 on why Energy Saving Week didn’t save much energy. It argues that we focus too much on the supply side of the energy industry and not enough on the demand side and particularly reducing demand at peak times:

http://greenallianceblog.org.uk/2015/11/03/why-big-energy-saving-week-didnt-save-much-energy/?utm_source=circulareconomynews.com&utm_medium=referral&utm_campaign=circulareconomynews.com

OFGEM is also seeking to improve competition in the UK electricity connections marketplace. It announced on 28 October new rules on how DNOs must take steps to open up competition to their services. These are set out in the first ever Code of Practice for DNOs:

https://www.ofgem.gov.uk/publications-and-updates/new-rules-open-competition-connections-local-power-grids

The REA has also commented on reports in Business Green that Western Power Distribution is investigating the potential for domestic energy customers in the south west to switch to a "sunshine" tariff that offers them lower energy prices when solar power supply is at its highest:

http://www.businessgreen.com/bg/news/2431473/how-cornish-energy-customers-could-be-paid-to-soak-up-solar-power?utm_source=REA+Members+Mailing+List&utm_campaign=4721538c7b-151105_REA_Newsletter&utm_medium=email&utm_term=0_e5d7ecbe99-4721538c7b-250326797&ct=t(151105_REA_Newsletter)&mc_cid=4721538c7b&mc_eid=b07cc4415d

Community Energy

Considerable anger has been caused by the Government’s proposed cuts to the tax relief schemes currently enjoyed by community energy projects. It is not just the fact that the Government wants to remove these benefits from community projects, it’s the way in which it has been done. Instead of having a formal consultation process, where interested parties can air their views on the proposals, and there is an impact assessment statement in support, this was actioned by a Government amendment to the Finance Bill as it moves through Parliament.

In this piece in Solar Power Portal, it reports that Labour MPs have asked for a debate on this issue, such will be the serious impact on community schemes:

http://www.solarpowerportal.co.uk/news/labour_mp_calls_for_parliamentary_debate_into_community_energy_tax_2136

It also reports that the Government has been steadfast in its refusal to answer questions about this move and any assessments that have been made underneath it:

http://www.solarpowerportal.co.uk/news/hmt_staying_coy_on_community_energy_tax_relief_cuts_3248

Although there was an early suggestion that this was to prevent abuse of tax concession rules:

http://www.solarpowerportal.co.uk/news/treasury_alludes_to_tax_avoidance_cases_as_reasoning_behind_community_1467

As Jamie Hailstone reports in this week’s news, the Green Party has also published a new report called ‘Taking Back the Power: Community Energy in the South East’ to showcase the benefits of community power:

http://www.keithtaylormep.org.uk/wp-content/uploads/Taking-Back-The-Power_Community-Energy-in-the-South-East.compressed.pdf

However, ahead of those planned cuts to tax relief, Bristol Energy Co-operative is attempting to raise an ambitious £2.8m to develop three separate community solar projects in the city. Solar Power Portal reports:

http://www.solarpowerportal.co.uk/news/bristol_energy_co_op_launches_ambitious_2.8_million_community_energy_1246

And finally …..

From a website called ‘the Conversation’, an idea of six things that you can do with coffee – after you have finished drinking it! I didn’t realise that coffee was so versatile in environmental terms …

http://theconversation.com/six-things-you-can-do-with-coffee-after-youve-finished-drinking-it-49385?utm_source=circulareconomynews.com&utm_medium=referral&utm_campaign=circulareconomynews.com

Stephen Cirell