steel-3387882_1920

Retrofitting leaky homes would cost £5bn over next four years, UK ministers told

Renovating the UK’s draughty homes to low-carbon standards would cost the government only £5bn within the next four years and would create 100,000 jobs, cut people’s energy bills, increase tax revenue and bring tens of billions in economic benefits, the construction industry has estimated.

Sector leaders have written to ministers proposing a new “national retrofit strategy” that they say would boost a green recovery in the UK and put Britain on track to meet its climate targets.

The proposal comes ahead of the government’s heat and buildings strategy, which is expected to be published soon. Decarbonising the UK’s homes, which are among the leakiest in Europe, and which produce nearly one-fifth of the UK’s carbon output, is a pressing issue as the government seeks cuts of 78% to greenhouse gas emissions by 2035.

Gas boilers will have to be replaced with heat pumps, district heating systems and possibly hydrogen systems, and homes will need loft, window and wall insulation. But the task is huge, and a plan has so far been lacking, with the green homes grant – an insulation scheme launched to fanfare last year as a way to build a green recovery from the Covid-19 pandemic – having been scrapped after a disastrous six months in operation.

In a letter to the business secretary, Kwasi Kwarteng, signed by more than 50 organisations and seen by the Guardian, the Construction Leadership Council set out a strategy that would help people to save more than £400 on their energy bills each year, and improve the health of those in fuel poverty.

“If the UK is to meet our world-leading carbon reduction targets, create jobs and level up, we must address the energy and water efficiency of our 28m homes. Our strategy is a blueprint, endorsed by the construction industry and beyond,” they wrote.

A government-led programme for refurbishing houses between now and 2024 would “support the levelling-up agenda, generate government revenue of more than £12bn, provide additional GDP of more than £21bn and unlock £11.4bn of private capital,” they added.

As well as a short-term strategy for this parliament of recruiting tens of thousands of people to install insulation and low-carbon heating systems in more than 850,000 homes, they propose a long-term strategy that would refurbish all of the UK’s homes by 2040. This would cost £524bn in total, of which the government would need to invest £168bn, and would create 500,000 jobs.

According to the construction industry’s strategy, this would require a mix of policies, including green mortgages to provide the finance for people to install low-carbon heating, stamp duty rebates on refurbished homes, reduced VAT on home improvement works, and loans to landlords to improve their properties.

Low-income households would need government grants, and those on higher incomes should be given access to low interest loans and council tax rebates, paid for by central government, the Construction Leadership Council said. Ministers should also act quickly to enable companies to start training employees and new recruits in the skills needed, the companies said.

“Wide-scale domestic retrofit is essential to the net zero agenda and backing a long-term strategy will help position the UK as global market leader in the low carbon economy ahead of the UN climate change conference [Cop26] in November,” the organisations added.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “We are already investing in making our buildings more energy efficient, and in order to meet our world-leading commitments on carbon emissions, we are gradually transitioning away from fossil fuel boilers and incentivising the take-up of low carbon alternatives as appliances are replaced, in a way that is fair, affordable and practical. To encourage energy efficiency and lower people’s energy bills, we are considering a range of options put forward by stakeholders and plan to launch a call for evidence to test what will work best for consumers in the UK.”

The government has said that people would not be fined for using their existing gas boilers, or refusing to switch to a low-carbon heating system, and that no one would be prevented from selling their homes if they do not meet energy efficiency standards, as some media reports have claimed.

Jenny Hill, the head of buildings and international action at the Committee on Climate Change, the government’s statutory adviser, said the industry’s proposed strategy was in line with the government’s net zero target. “This report shows a can-do attitude and a clear vision by the construction industry,” she told the Guardian. “It has all the different elements that are needed to come together: skills, consumer education, compliance and enforcement, performance standards, and a framework for market certainty.”

Public backing for the move to low-carbon heating would be essential, Hill added. Many media reports have focused on the difficulties of switching away from gas boilers, and the cost of low-carbon alternatives such as heat pumps. However, without a comprehensive programme for domestic housing there is little chance of meeting climate targets.

“It’s a condition of success that the negative impacts are minimised, that this is fair and equitable, and that people have a say in the process,” said Hill. “This transition definitely can be done in a sensible way that supports people and listens to their concerns.”

wind-turbine-2218457_1280

Water company United Utilities to sell £65M renewables business

Water company United Utilities has put its renewables energy business up for sale.
The decision to market the group’s renewable energy business, United Utilities Renewable Energy Limited, was taken in April and the sake process is expected to commence during June 2021. United Utilities said it will involve the sale of assets – primarily property, plant and equipment – with a carrying value of £65.5 million.
The company said the sale will mean it can continue to benefit from the output of the renewable energy assets over the long term, while being able to reinvest sales proceeds in other low carbon projects. The company said in its annual report, “Our portfolio of renewable energy assets is operating satisfactorily and our investment has delivered the returns that we targeted. Having maximised the opportunities to date and established long-term contracts to secure a proportion of our renewable energy out to 2045, we are now looking at how we can recycle our investment in order to achieve further strong returns and take the next steps in our plans to achieve net zero by 2030”.
In 2019/20 UU generated the equivalent of 191GWh of renewable electricity, an increase of 18GWh on the previous year. It did this with a mix of generation from wind, hydro, solar photovoltaics and energy recovery from bio resources (using sewage sludge to power combined heat and power generators).
The renewables business includes a 1MW floating solar array at Langthwaite reservoir near Lancaster, installed in 2018. Last year it installed a 2MW battery alongside solar panels at its Clifton Marsh wastewater treatment works near Preston. The batteries at were provided by Zenobe Energy.

light-bulbs-1875268_1920

Commercially viable electricity from nuclear fusion a step closer thanks to British breakthrough

Scientists appear to have solved the exhaust problem for compact fusion power plants, making them more economically-viable.

pobrane

Centrica calls on Government to pay homeowners for heat pump switch

British Gas owner says Retrofit Fund would fund household switch to hybrid systems, where homes run on heat pumps plus a backup boiler

British Gas owner Centrica is calling on the Government to fund the rollout of new “hybrid” heating systems, as ministers face mounting pressure to clarify the future of the gas boiler in Britain.

Hybrid heating systems combine a small gas boiler with an air source heat pump. Transitioning to such a system would cut household carbon emissions in the short term, but would rely on green hydrogen replacing natural gas on the gas grid to become a zero emissions solution for home heating.

Centrica, which is the largest installer of gas boilers in the UK, said ministers should launch a Retrofit Fund to help at least 5,000 households change from a traditional gas boiler to a hybrid heating system by 2024.

The fund could target the draughtiest homes, gathering data to help officials decide whether to subsidise a mass rollout of hybrid systems, Centrica said.

The calls follow advice from the International Energy Agency and the CBI, which both say the installation of new gas boilers should be banned by 2025 to keep the UK on track for its net zero emissions target. The Government is reportedly considering a later phase-out date of 2035, but a key strategy document that will set out more details on ministerial plans has been delayed until next month.

 

photovoltaic-491702_1280

Unsustainable transmission charges could jeopardise British infrastructure investment warns report

Green energy infrastructure investment is being jeopardised by British regulations that favour EU electricity imports.

In new analysis put together by RIDG (Renewable Infrastructure Development Group), a member company of RenewableUK, the transmission charges set by the regulator Ofgem and paid by electricity generators in the country are criticised in comparison to competing European generators.

On average the report suggests EU generators pay £0.46/MWh in transmission system charges. However, in Scotland the average is £6.42/MWh as of 2021.

This difference is even starker in the windy north of Scotland where the price spikes to £7.36/MWh.

“The UK has the best wind resource in Europe, and we should be making the most of the clean electricity we’re producing for UK consumers at the lowest cost and ensuring we can export the massive amount of power we’re generating when there’s a surplus,” said RenewableUK’s director of future electricity systems Barnaby Wharton.

“The current approach to transmission grid charging is not sustainable if we want global Britain to become a bigger player in the international power market. If Ofgem is serious about supporting UK’s net zero emissions target, it should change its approach to ensure we can take advantage of the bountiful natural resources we have.

“Ofgem needs to have a specific net zero remit to ensure we maximise our zero carbon generation as a matter of urgency – and this should be addressed by Ministers alongside the government’s forthcoming Strategy and Policy Statement for Ofgem.”

Transmission charges are set to cover the cost of building and maintaining the network, and are ultimately paid by consumers as part of their bills.

At their current levels, the UK risks becoming a net importer of renewable energy from the EU in coming decades, as cheaper energy is favoured in comparison with that generated in the UK that is subject to the transmission charges.

“Of 36 countries in the European transmission network, 20 do not charge generators at all and only five levy charges based on location,” expanded associate director of RIDG Marc Smeed. “Compare this to Scottish offshore wind projects, which our analysis forecasts will pay £10/MWh – around a quarter of a project’s revenue – to access the grid in the years ahead.

“Addressing this imbalance would help unlock the best wind energy resources in Europe, bringing billions of pounds of investment and jobs to some of the most remote and disadvantaged parts of the UK.”

The report follows criticism from network operator Scottish and Southern Electricity Networks (SSEN) of the current Transmission Network Use of System (TNUoS) charging regime, which it has described as “unfair and volatile”. Similarly it highlighted that the current system makes wind generation in the north of Scotland particularly expensive.

electricity-3442835_1280

Half of Shell’s energy mix to be clean next decade, CEO says

Royal Dutch Shell Plc’s head expects clean energy to make up half of the company’s energy mix “somewhere in the next decade.”

“If we do not make that type of process by the middle of next decade, we have a problem not just as a company but as a society,” Chief Executive Officer Ben van Beurden said in an interview with AXIOS on HBO.

Like its European peers, the Anglo-Dutch major has set itself an “ambition” to become a net-zero emissions energy company by the middle of this century. The feat involves producing less oil, more gas and renewables, as well as using technologies still in their infancy like hydrogen and carbon sequestration. Not everyone is convinced, with the energy giant set to clash with some shareholders on the matter at its annual general meeting later this month.

“If you want to get rid of hydrocarbons in the mix, you have to do something about the use of it, not the production of it,” van Beurden said. Speaking on the challenges of the transition, the 63-year-old Dutchman also said that people want to see results straightaway, but “don’t expect that tomorrow we will stop selling diesel to trucks.”

While van Beurden welcomed the U.S. rejoining the Paris Climate Agreement, which seeks to limit global warming temperature increases to less than 2 degrees Celsius from pre-industrial levels, he questioned other policies. “What I also see is that the government is flirting with popular ideas that are clear, simple, and wrong, which is, ‘Let’s ban the production of oil and gas in our country.’”

pobrane

Supplier Symbio Energy fined £100,000 for repeated late payments under the feed-in tariff and Renewables obligation schemes

On 05 May 2021 the Gas and Electricity Markets Authority (“the Authority”) decided to confirm its proposal to impose a financial penalty of £100,000 on Symbio Energy Limited (“Symbio”) for its failure to comply with Standard Licence Condition 33 of the Electricity Supply Licence, the Feed-In Tariff  Order 2012, Articles 68 and 74 of the Renewable Obligation Order 2015 and Article 49 of the Renewable Obligation (Scotland) Order 2009.

The Enforcement Decision Panel made the above decision having carefully heard and considered representations from Symbio and third parties which were submitted in response to the notice of proposal to impose a penalty dated 27 January 2021.

The Authority gives notice of its decision under section 27A(5) of the Electricity Act 1989.

lightning-1158027_1280

Energy Assets acquires UK smart meter portfolio from Macquarie

Energy Assets Group has added more than 600,000 industrial and commercial meters to its growing portfolio of assets with the acquisition of a UK smart meter portfolio from Macquarie Specialised and Asset Finance.

Energy Assets has invested an undisclosed sum to buy Cortex Metering Solutions (CMS) from Macquarie.

Colin Lynch, Energy Assets CEO, said: “This acquisition complements our gas metering portfolio and aligns with our strategy to be a leader in technologies and services that support the journey to Net-Zero.

“We very much look forward to extending our reach in industrial and commercial metering assets on behalf of new and existing customers, working in partnership with more than 80 energy suppliers who have relationships with CMS.”

Julian Liddy, senior managing director and head of Macquarie Specialised and Asset Finance in EMEA said: “Having played an active and founding role in the UK’s metering industry for the last 18 years, we are proud of the contribution we have made in building out the I&C portfolio to this point and helping our clients to deploy smart meters across the country.”

Neil Denley, a managing director for Macquarie Specialised and Asset Finance in EMEA, added: “The sale of part of our industrial and commercial portfolio will allow us to focus on our residential metering business – where we have an important role to play in helping meet our customers’ ambitious smart meter rollout targets.”

Macquarie, which entered industrial and commercial metering in 2006, said it will continue to focus its efforts on the residential metering sector going forward.

light-bulbs-1875268_1920

British Gas owner Centrica warns financial outlook is uncertain

The owner of British Gas has warned investors it has faced a difficult start to the year, weeks after sacking hundreds of its engineers through a controversial fire and rehire scheme to help turn the business around.

Centrica told its shareholders its financial outlook for the year was uncertain after the impact of the Covid-19 pandemic continued to drag on the business, which has struggled in recent years due to rising competition in the energy market.

In the first quarter of this year, demand for electricity was 15% lower than the year before among the company’s business customers, the company said in a trading update ahead of its annual shareholder meeting. Home boiler repairs and installations were 11% lower than the same time last year because non-essential home service visits were postponed to help prevent the spread of Covid-19.

The slump in home energy services was also due to a long-running series of strikes by thousands of its engineers in response to the company’s plan to toughen its employment contracts in an effort to boost productivity and become more competitive.

Under the fire and rehire plans, most of Centrica’s 20,000 staff were told to accept the new conditions, which would increase working hours for its engineers, or lose their jobs.

The company confirmed that 460 engineers were dismissed last month, as a result of what the GMB trade union has called “a dirty, bullying tactic”. A survey by the union found that more than three-quarters of the public believe that fire and rehire schemes should be made illegal.

Chris O’Shea, who became Centrica chief executive last year, said his plans to modernise the company remained on track and “the difficult, but necessary process to move colleagues on to new terms and conditions is now complete”.

“We are pleased that 98% of UK colleagues have accepted the new contracts which will enable us to better serve the needs of our customers. Although the external environment remains uncertain, our tight focus on cash and on fixing the basics across the group leaves us well placed as we continue the turnaround of our company,” O’Shea said.

O’Shea hopes to save £100m in operational costs this year as part of a plan to stem the steady decline of the FTSE 250 energy company in recent years. British Gas has lost about 3 million household energy customers in the last decade following an influx of successful new energy startups. Centrica crashed out of the FTSE 100 after losing more than 70% of its market value in the last five years.

light-bulbs-1875384_1280

50,000 jobs by 2050: UK Government outlines plans to scale up carbon capture sector

Published late on Friday (7 May), the policy paper states that the UK will aim to capture and store 10 million tonnes of CO2 per year by 2030. Should this target be met, and progress continue accelerating between 2030 and 2050, the paper states, some 50,000 jobs could be supported.

The emerging CCUS sector is described in the report as a “great incubator of green jobs” as Ministers seek to get the UK on track to host two million such roles by the end of the decade. It is also described as a sector that can help deliver a “fair and equitable transition” for oil and gas workers who will likely need new roles in the coming years, given that many in the sector will have transferrable skills.

While the report describes itself as a ‘roadmap’, there is little detail on how the Government will support the skills, infrastructure and technologies needed to deliver on 2030 and 2050 targets. It states that a full map of opportunities and challenges, as well as Government supports, will be published later this year. This document will come alongside a ‘Fit for CCUS’ scheme for businesses, designed to help high emitters like oil and gas majors and heavy industrial sites to prepare to adopt the technology.

The document does state that BEIS will work more closely with bodies including the Treasury, the Department for National Trade, the British Business Bank and the National Infrastructure Bank (NIB) to develop the map. Ministers have faced multiple accusations in recent months of failing to work across departments to avoid net-zero loopholes. The NIB is notably entering operation this week, with questions still remaining about its climate remit.

It also reassures readers within the sector that BEIS remains open to supporting CCUS projects it is not currently aware of, through mechanisms such as the dedicated Infrastructure Fund. Announced late last year as part of the Ten Point Plan, the Fund’s remit was updated last week in line with the UK’s adoption of the Climate Change Committee’s (CCC) Sixth Carbon Budget recommendations last month. The paper also expresses the possibility of CCUS being included in future post-Brexit trade deals.

Existing projects, the policy paper states, should identify and advertise potential delivery contractors “as visibly and as early as possible”.

Clusters and dispersed sites

The paper comes after a report commissioned by BEIS, and published last year, concluded that the department is lacking a “comprehensive regulatory framework” to overcome challenges to “dispersed” sites that would be suitable for CCUS but that aren’t located in industrial clusters.

Indeed, the overarching target for CCUS to date has been for the UK to fully decarbonise at least one industrial cluster by 2040. Clusters are seen as less risky locations for deployment as, with dispersed sites, new transportation infrastructure will be needed.

The UK Government has increasingly focused on CCS since setting its legally binding net-zero target. Before then, the previous £1bn competition fund for CCS was actually scrapped by the now-defunct Department for Energy and Climate Change (DECC).

According to the CCC, CCUS is a “non-optional” component of the UK’s transition to net-zero. However, some green groups would like to see Ministers doing more to prioritise technologies that are already mature, alongside nature-based solutions for sequestering carbon, in the short to mid-term.