PES Energy News – 20 March 2023 

Table of contents:

01 – UK offers £205m to renewable energy projects – The government will be investing £170 million in offshore wind and £10 million in tidal stream technology

02 – Gas boost: New UK rule change to extract more gas! – The government will relax gas rules by 2025, allowing lower calorific value gas to be mixed with other supplies

03 – IPCC final warning: Act now or face dire consequences – The IPCC Synthesis report will warn that urgent and sustained action is required in the 2020s to avert catastrophic consequences

04 – “Port upgrades key to UK’s  floating offshore wind growth” – A new report suggests the offshore wind industry requires upgrades for turbine assembly and manufacturing

05 – UK to explore extending contracts for backup coal plants – The system operator will soon start negotiations to secure additional capacity required for the next winter

01 – UK offers £205m to renewable energy projects

The UK government has committed to boosting its clean energy sector with a £205 million budget for the latest round of the Contracts for Difference (CfD) scheme. 

The government’s flagship mechanism has already supported almost 27GW of low carbon electricity generation projects and the fifth allocation round is expected to further encourage green industries and jobs.

The budget includes £170 million for established technologies such as offshore wind, as well as a £10 million allocation for tidal stream technologies, aimed at unlocking a tidal power industry in the UK.

Graham Stuart, the Minister of State for Energy Security and Net Zero, has emphasised the importance of the CfD scheme in delivering clean, domestic energy and promoting green industries and jobs.

Mr Stuart said last week: “Today’s budget announcement, the move to annual auctions and continued investment in renewable energy will limit the impact of events like Putin’s illegal war in Ukraine and drive our overriding priority for the UK to have amongst the cheapest wholesale electricity prices in Europe.

“I am excited to see the opportunities that will open for Britain’s world-class renewable industries as annual auctions kick off this year, enhancing the UK’s reputation as among the most attractive places to invest in for a secure, affordable and prosperous future.”

02 – Gas boost: New UK rule change to extract more gas!

The government is to relax gas rules by 2025, allowing drillers to extract more gas that would have otherwise been left in the ground.

The new measure will allow lower calorific value gas to be mixed with other supplies, a move that Neptune Energy says will remove decades-old constraints on the industry.

The change will bring the UK in line with many other European countries including Germany, the Netherlands, and Poland.

Experts say that households are not expected to notice any difference.

According to Neptune Energy, the change could have produced 13% more gas from its Cygnus field in the previous year.

The Department for Energy Security and Net Zero (DESNZ) says the move will be a positive change and contribute to the country’s energy independence.

The Health and Safety Executive (HSE) has said that the change can be made without any adverse impact on the health and safety of users.

03 – IPCC final warning: Act now or face dire consequences

The practice of flaring in the UK North Sea has been reduced by 50% within a span of four years.

That’s according to the latest figures released today by the North Sea Transition Authority (NSTA), which show that offshore flaring in 2022 declined by 13%, resulting in 22 billion cubic feet (bcf) of gas being flared.

This brings the total reduction to 50% since 2018, when the volumes were at 44 bcf, according to the report.

Gas flaring is the burning of natural gas associated with oil extraction.

Official figures suggest the decrease in flaring from last year alone is comparable to the gas consumption of 80,000 homes in the UK.

Hedvig Ljungerud, NSTA Director of Strategy, said: “It is hugely encouraging to see North Sea flaring cut in half in just four years, something the NSTA has made a priority and which supports both the UK’s energy security and net zero ambition.

“Industry also deserves credit for making this progress. The NSTA expects reductions to continue and remains firmly focused on both supporting and challenging industry on emissions, including from flaring and venting.”

04 – “Port upgrades key to UK’s floating offshore wind growth”

The government has been urged to transform UK ports into industrial hubs to facilitate the large-scale rollout of floating offshore wind.

The Floating Wind Offshore Wind Taskforce, which includes major offshore wind and port developers, and other stakeholders, recommends the investment of £4 billion to upgrade ports for mass deployment of floating wind turbines by the end of the decade.

To accommodate turbines with hub heights exceeding 150 metres and their colossal floating bases, ports must be upgraded to allow for manufacturing and assembly in coastal areas.

Scottish ports and the Celtic Sea, where floating projects are presently in the works, will be the initial targets for development, the report suggests.

The taskforce notes that implementing some of its recommendations will result in the installation of 34GW of floating wind in UK waters by 2040, generating £26.6 billion in additional GVA and supporting 45,000 jobs across the country.

05 – UK to explore extending contracts for backup coal plants

The UK will soon engage in negotiations to keep coal power units open next winter.

During National Grid ESO’s Operational Transparency Forum this morning, the system operator confirmed it received a letter from the Department for Energy Security and Net Zero requesting that it explored the procurement of winter contingency contracts, for additional capacity over the 2023/2024 winter.

In the past couple of months, National Grid put coal plants on standby to be used as an emergency backup.

The new agreements are expected to enable the units to be available again the next winter.

Once finalised, the ESO will inform the energy market of any agreed contracts, similar to what it did for the 2022/23 contracts.

The move is expected to support Britain’s energy market preparations for the upcoming winter

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