PES Energy News – 06 February 2023 Table of contents:

01 – Trust issues and concerns over heat network zoning, government study shows  – Local authorities believe there is “insufficient capacity” within the public sector to deliver ambitious schemes

02 – UK energy industry calls for more clean energy investment – Energy trade associations have urged ministers to reform capital allowances and financial incentives

03 – Will low wind turbine orders strike another blow to European grids? – European orders for wind turbines nearly halved last year, according to a new report

04 – Britons ‘overpaid £7.2bn on energy bills over two years’ – A new report has found that the UK and Italy have paid the highest gas spot prices during the period of energy crisis

05 – CCC: ‘Government not spending enough to tackle climate change’ – More investment is needed to combat flooding, heatwaves and droughts – the watchdog says

01 – Trust issues and concerns over heat network zoning, government study shows

The implementation of heat network zoning faces a range of challenges, new research suggests.

The government had previously launched consultation about the delivery of heat network zoning in England – in a heat network zone, all new buildings, large public sector and large non-domestic buildings – as well as larger domestic premises which are currently communally heated – would be required to connect to a heat network within a prescribed timeframe.

Heat network zoning is considered as an important policy tool to accelerate the heat decarbonisation of buildings.

Findings from a government report show that just 58% of private sector organisations trust their local authority to oversee heat network zones and local councils were ranked second and fourth, respectively, for being the most trusted source of information on heat networks by social housing residents and domestic owner-occupiers.

The social research, which was undertaken to inform the development of future heat networks zoning policy, also reveals that local authorities see themselves playing a “strategic role” in planning and overseeing heat network zoning.

02 – UK energy industry calls for more clean energy investment

Green growth is at “severe” risk unless the government prioritises vital measures in the Spring Budget, five energy trade associations have warned today.

In a letter to Chancellor Jeremy Hunt, the bosses of RenewableUK, Energy UK, the Nuclear Industry Association, Scottish Renewables and Solar Energy UK said: “Despite our industry’s commitment to the low carbon energy transition, we are concerned that there is no clear government plan to deliver green economic growth and continue attracting clean energy investment into the UK.”

The trade associations are calling for key steps in the Spring Budget to address this, including a reform of capital allowances and financial incentives for investment in low carbon energy in response to those being offered by the US in its $216 billion (£176bn) Inflation Reduction Act and the European Union in its REPowerEU package.

The letter states that: “With many clean energy projects already delaying Final Investment Decision and supply chain companies squeezed by the energy crisis and inflationary pressures, a tangible step like enhanced capital allowances announced in the Spring Budget will do more to persuade investors than the promises of a future plan for economic growth.”

03 – Will low wind turbine orders strike another blow to European grids?

Orders for new wind turbines were down 47% in 2022 compared to 2021.

That’s according to a new report by the association WindEurope, which suggests the EU saw nearly 9GW worth of new turbine orders.

Under the EU’s new energy and climate security targets, the member states need to build 30GW of new wind farms a year.

Europe has the ambition to get from 15GW of installed offshore wind capacity to more than 100GW by 2030.

Experts attribute the delay in investment decisions over new wind turbines to inflation and market volatility.

WindEurope Chief Executive Officer Giles Dickson said: “Last year’s market interventions have made Europe less attractive for renewables investors than the US, Australia and elsewhere.

“They impacted the business case for renewable energy projects across Europe. The figures for wind turbine orders in 2022 should ring an alarm bell: Europe’s energy and climate targets are at risk if the EU fails to ensure an attractive investment environment for renewables.”

04 – Britons ‘overpaid £7.2bn on energy bills over two years’

The way electricity prices are still determined by gas prices has pushed British households to pay an extra £7.2 billion on energy bills in 2021-22.

That’s according to a new report by the independent financial think tank Carbon Tracker Initiative which suggests Europe’s most gas-power-dependent countries, the UK and Italy paid the highest gas spot prices during the period of high gas price volatility.

Analysts say the rise in British energy bills reflects the existing link between soaring gas and electricity prices.

Currently, in Britain, electricity prices are still dictated by gas producers who provide less than half of the UK’s electricity.

Senior Analyst and report author Jonathan Sims said: “Our findings show the extent to which the global gas market has over the past two years skewed British power prices to levels unreflective of the technological makeup of today’s generation mix.

“While continuing with marginal pricing for wholesale power market design is preferable to ensure significant changes do not dent investor confidence in the renewables sector at this crucial juncture, the government must protect against any future gas price spikes pulling power market prices up with them.”

05 – CCC: ‘Government not spending enough to tackle climate change’

The UK is not spending enough to combat climate change or its impacts.

That’s according to the Climate Change Committee (CCC), which claims that £10 billion each year is needed to overcome the upsurge in heatwaves, droughts and flooding experienced in the country during the last few years.

Aside from improving the response to events such as flooding, with better defences – the watchdog has also called for more to be done to stop the problem at source; insulation of homes for example.

Global warming is already underway and can no longer be ignored, the CCC stresses. Improving drainage to cope with urban flooding from heavy rainfall, accessibility to public water supplies to combat drought and utilising nature-based solutions are some of the options suggested in the report.

The CCC explains that this would not only protect the UK against the impacts of climate change but also save money in the long run – with infrastructure in place to deal with issues, rather than stretching emergency services.

Baroness Brown, Chair of the CCC’s Adaptation Committee, said: “It is no secret that the UK is now experiencing a range of damaging consequences of climate change but adaptation in the UK remains chronically underfunded and overlooked. This must change.”

“Integrating climate risk into economic and financial decision-making across society is essential for urgently needed investments in our national climate resilience to materialise,” added Ben Caldecott, one of the authors of the report.

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