Energy weekly highlights—28 June 2019

This week’s edition of Energy highlights includes the publication of the Office of Gas and Electricity Markets’ (Ofgem) statutory consultation on a proposal to modify the special conditions of the electricity transmission licence held by National Grid Electricity System Operator Ltd (NGESO) in order to increase certainty around the Balancing Services Use of System (BSUoS) charges, along with their decisions to access half-hourly electricity data and reject proposals submitted by NEGSO to establish a network code on emergency and restoration (NCER). Also this week, NGESO has published the full final results report for T-1 Auction—Delivery Year 2019–20, and the Offshore Wind Industry Council (OWIC) launched the Offshore Wind Growth Partnership (OWGP), a ten-year, £100m programme that aims to develop a globally competitive UK supply chain as well as supporting 650 companies in delivering 60% UK content in offshore wind farm. Also this week, BEIS has published the latest quarterly Energy Trends updates, together with associated special feature articles.

 

Electricity and gas market regulation and licensing

Over half of the UK's electricity generation is now low carbon, statistics show

The Department for Business, Energy & Industrial Strategy (BEIS) has published their quarterly bulletin on energy trends, containing statistics on all major aspects of the UK energy sector. The report shows that low carbon methods accounts for over half of all electricity generation, having increased from 48.3% in the first quarter of 2018 to 51.8% in 2019. Renewable energy increased their share of electricity generation by 5.3%, from 30.5% in 2018 to 35.8% in 2019. BEIS have also published three special feature articles to compliment the bulletin. See: LNB News 27/06/2019 42.

Ofgem rejects five proposals submitted by the electricity system operator

Office of Gas and Electricity Markets (Ofgem) has published its decision on five proposals submitted for approval by the electricity system operator (ESO) under Article 4(2) of Commission Regulation (EU) 2017/2196 establishing a network code on emergency and restoration (NCER). In its decision, Ofgem rejected the proposals in their current form and concluded that they had to be amended to provide more clarity and transparency for grid users and restoration and defence service providers. Now, the ESO must make the necessary amendments to the proposals in line with the Ofgem’s decision and resubmit amended proposals within two months. See: LNB News 21/06/2019 56.

Ofgem publishes consultation to increase certainty around the Balancing Services Use of System (BSUoS) charges

Ofgem has released a statutory consultation on a proposal to modify the special conditions of the electricity transmission licence held by National Grid Electricity System Operator Ltd (NGESO). According to Ofgem, they ‘are proposing this modification in order to increase certainty around the Balancing Services Use of System charges market participants face as a result of incentive payments incurred by NGESO’. See: LNB News 26/06/2019 65.

Ofgem decides on access to half-hourly electricity data for settlement purposes

Ofgem has announced its decision on access to half-hourly electricity data for settlement purposes. The decision follows consultation which ran between July and September 2019. Currently, domestic consumers’ half-hourly consumption data can only be accessed if they have opted-in while data from microbusinesses can only be accessed if they have not opted-out. See: LNB News 26/06/2019 19.

Networks and network connections

Ofgem to assign Commission Regulation obligations to Transmission System Operators

Ofgem has published its decision to assign Transmission System Operator (TSO) obligations under the Commission Regulation (EU) 2017/2196, to establish a network code on electricity emergency and restoration. Ofgem is assigning these obligations under Article 2(7) of the emergency and restoration code (NCER), which requires these obligations to be distributed where a Member State has more than one TSO or has a TSO which does not have a function relevant to one or more obligations under Regulation (EU) 2017/2196. It is Ofgem’s view that not all UK TSOs have all the required functions. See: LNB News 21/06/2019 43.

Renewable energy

Offshore wind initiative to develop globally competitive UK supply chain

The Offshore Wind Industry Council (OWIC) has launched the Offshore Wind Growth Partnership (OWGP), a ten-year, £100m programme that aims to develop a globally competitive UK supply chain as well as supporting 650 companies in delivering 60% UK content in offshore wind farms. The OWIC has launched the OWGP as a key part of the offshore wind sector deal which aims for at least 30 gigawatts of offshore wind to be installed by 2030. The OWGP will be delivered by the Offshore Renewable Energy Catapult that will support supply chain companies to increase growth and competitiveness. The OWGP will initiate an in-depth assessment of the offshore wind foundations sector as its first task. See: LNB News 24/06/2019 65.

Draft legislation for Finance Bill 2020

The government will publish draft clauses on 11 July 2019 for the Finance Bill to be introduced following the next Budget in the Autumn. Explanatory notes, tax information and impact notes, responses to consultations and other supporting documents will accompany this draft legislation. See: LNB News 25/06/2019 89.

Britain will rely on clean energy over fossil fuels in 2019

For the first time since the Industrial Revolution, National Grid has predicted more of Britain’s electricity production will come from zero carbon energy sources than fossil fuels. National Grid analysed annual power generation data from the last ten years, which it says shows Britain’s reliance on cleaner energy sources will exceed that on fossil fuels in 2019. This is due to innovative approaches to energy, such as connecting Britain’s electricity grid to its neighbours via under water cables called interconnectors, which will cut carbon emissions and accelerate Britain’s response to climate change. Tim Pugh, a solicitor specialising in planning environment and infrastructure, comments on the announcement. See: LNB News 21/06/2019 72.

Capacity Market, balancing services and energy system flexibility

National Grid ESO publishes round results for T-1 Auction—Delivery Year 2019–20

National Grid ESO has published the full final results report for T-1 Auction—Delivery Year 2019–20. This includes details of the bidding round price spread and the potential clearing capacity at the bidding round price floor for that bidding round. It also details, except in relation to the first bidding round, the excess capacity as at the start of the bidding round. See: LNB News 25/06/2019 77.

Most suppliers meet 2018 targets for smart meter rollout, Ofgem letter confirms

Ofgem has published a letter outlining progress made on smart meter rollout. The letter confirms that most large suppliers met their 2018 targets for the number of smart meters in their portfolio. However, SSE failed to meet its target and in exchange it agreed to pay £700,000 to the consumer redress fund administered by the energy savings trust, with no further enforcement action taken by Ofgem. Now Ofgem is monitoring rollout plans for 2019. See: LNB News 20/06/2019 11.

Nuclear

Office for Nuclear Regulation publishes annual report and accounts for 2018–19

The Office for Nuclear Regulation (ONR) has published its annual report and accounts for 2018 to 2019. It says ONR delivered 53 out of 60 corporate milestones and 91 out of 104 regulatory plan milestones. Four regulatory milestones were deferred to 2019/20 and nine were removed due to changes in operational priorities. ONR also says its Strategic Plan and regulatory assumptions for 2016 to 2020 remain valid and will continue to inform its activities. See: LNB News 20/06/2019 100.

Air emissions, efficiency and climate change

The Court of Justice of the European Union rules on the allocation of GHG emission allowances

ExxonMobil Production Deutschland GmbH v Bundesrepublik DeutschlandC-682/17

European Union—Environment. Article 3(u) of Directive (EC) 2003/87, as amended, should be interpreted as meaning that an installation, such as that at issue in the main proceedings, which produced, within the framework of its activity of 'combustion of fuels in installations with a total rated thermal input exceeding 20 [megawatts (MW)]', referred to in Annex I to that directive, electricity intended essentially to be used for its own needs, had be regarded as an 'electricity generator', within the meaning of that provision. The Court of Justice of the European Union so held in a preliminary ruling in proceedings concerning the application by the applicant company for the allocation of greenhouse gas emission allowances free of charge to a natural gas processing installation. The digest is available here: [2019] All ER (D) 131 (Jun).

New EU strategic agenda aims to strengthen role of EU in ‘unsettled’ world

The European Council has published its strategic agenda for 2019–24. The agenda provides and overall framework and direction for the EU’s future. It sets out four main priorities—'protecting citizens and freedoms’, ‘developing a strong and vibrant economic base’, ‘building a climate-neutral, green, fair and social Europe’, and ‘promoting European interests and values on the global stage’. Julie Vaughan, senior associate at Herbert Smith Freehills, comments on the agenda, saying it makes it clear that ‘EU policies should be consistent with the Paris Agreement’. See: LNB News 21/06/2019 76.

 

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