Energy weekly highlights—31 May 2019

This week’s edition of Energy highlights includes confirmation from the Office of Gas and Electricity Markets (Ofgem) on its methodology for calculating the next round of network controls between 2021 and 2026, which will deliver a ‘smarter and more sustainable’ energy network; the publication of the Department for Business, Energy & Industrial Strategy’s (BEIS) response document for its consultation on the enrolment of Secure SMETS1 meters in the Data and Communications Company’s (DCC) national communications network, along with a final statement for the second carbon budget period, as required by section 18 of the Climate Change Act 2008. Also this week, the Energy Progress Report revealed a significant increase in the global electrification rate.

Electricity and gas market regulation and licensing

Number of people with access to electricity up 360 million since 2010

The number of people without access to electricity has dropped to around 840 million, compared to 1.2 billion in 2010, the Energy Progress Report finds. The current global electrification rate is 89% and is expected to rise to 92% by 2030. Despite significant efforts made to develop and deploy renewable energy technology to generate electricity, development is lagging far behind the goals when it comes to access to clean cooking solutions and the use of renewable energy in heat generation and transport. See: LNB News 23/05/2019 71.

Networks and connections

Ofgem confirms new methodology on price control

Ofgem has confirmed its new methodology for calculating network price controls starting in 2021. In today’s terms, the methodology known as RIIO-2 would set the allowed baseline return on equity at 4.3% (CPIH) in a cost of equity range of 4.0%–5.6%. This is almost 50% lower than under the previous price control (RIIO-1) and it would reduce costs passed on to consumers by £6bn between 2021–2026. See: LNB News 24/05/2019 9.

Capacity Market, balancing services and energy system flexibility

DCC to rollout interoperable smart meter for SMETS1

BEIS has published a response document for its consultation on the enrolment of Secure SMETS1 meters in DCC’s national communications network. From the 21 responses received, BEIS has concluded that it requires the DCC to provide an interoperable smart meter service for the Secure SMETS1 meter set to create a single point of responsibility for communication with devices. See: LNB News 24/05/2019 2.

Renewable energy

UK and Azerbaijan to continue to develop renewable energy sectors

The Department for International Trade has announced that the UK and Azerbaijan have committed to a new partnership that will aim to tackle challenges in the energy sector and build on the renewable energy sectors in both countries. Total trade between the UK and Azerbaijan was worth over £1bn in 2018, a 66.4% increase on 2017, and the UK is the largest investor in Azerbaijan. See: LNB News 24/05/2019 63.

Air emissions, efficiency and climate change

Net UK carbon account exceeds target carbon emissions reduction

BEIS has published the final statement for the second carbon budget period, as required by section 18 of the Climate Change Act 2008. The statement revealed that between 2013–17, UK emissions, as calculated by the net UK carbon account, were 2,398 million tonnes of carbon dioxide equivalent (MtCO2e). This is 384 MtCO2e below the second carbon budget cap of 2,782 MtCO2e. This means that, on average, emissions, as measured by the net carbon account, were 40% lower than 1990 base year emissions over the second carbon budget period. See: LNB News 23/05/2019 78.

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