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Government sidesteps Committee’s call for Scottish oil and gas sector dea

The Government’s response to the Scottish Affairs Committee’s report on the future of the oil and gas does not directly address the Committee’s call for a sector deal, and instead states that the Government’s relationship with the sector is already “well-established.”

The Committee today publishes the Government’s response to its report on the future of the oil and gas industry. The Government sidesteps addressing the Committee’s headline recommendation of an ambitious sector deal to ensure Scotland’s energy industry can navigate the challenges of its future and continue to prosper.

Chair’s comments

Chair of the Committee, Pete Wishart MP said:

“Though there are some positive noises from the government, such as their enhanced funding for carbon capture and storage technologies and the recently announced centre of underwater engineering, we are disappointed by its reluctance to give a clear answer about whether it will implement an over-arching sector deal that would truly transform the oil and gas industry in Scotland. A sector deal would provide the coordinated approach needed to support transition to a new clean energy industry. The last thing the industry needs now is continuing uncertainty, so I have written to the Minister to press for more clarification on the Government’s stance on a sector deal.”

Sector deal

The Committee recommended an oil and gas sector deal that has the detail and ambition needed to support the industry’s challenging future and reflect the Government’s climate change targets by setting out a coordinated way for the sector to transition to green energy production. However, the Government response merely “acknowledges” the Committee’s support for a sector deal and argues that the Government already has a “well-established relationship” with the sector.

The Government suggests that a phased approach to funding and supporting the sector may be preferable to a formal deal. The Chair of the Committee has written to the Energy Minister, Claire Perry MP, to press the Government for more detail on its approach to supporting the industry, including its stance on a formal sector deal and to ask how it will ensure its phased approach does not lead to areas of less immediate economic benefit to the sector, such as work on energy transition and carbon capture, being neglected in favour of the areas of the deal that promise a more immediate economic return.

Climate change and new technologies

The Committee’s report outlined that one of the biggest challenges facing the industry is climate change and called on Government and industry to take a visibly more proactive approach to limiting the sector’s carbon footprint. The Government’s has responded positively to the Committee’s recommendations for increased support for carbon capture, usage and storage (CCUS) technologies.

In particular, the Government highlights its enhanced funding for CCUS innovations through the BEIS
call for funding applications for feasibility studies, industrial research and experimental development.

The government recently announced its support for a new underwater engineering centre at Aberdeen, which would bring together industry and academia from across the UK to develop new technologies which would enable the sector to move towards a low carbon economy. The Committee called for this in its report, however suggested it should be part of a more structured sector plan.

Decommissioning and skills transfer

The Committee’s report recommended that decommissioning – the process by which oil and gas infrastructure is shut down, or reconfigured, after oil and gas production ceases – should be made a central part of a sector deal. While the Government response acknowledges that decommissioning expertise presents a global economic opportunity for Scotland’s industry, little tangible progress has been made. The Government response points to the launch of a call for evidence on decommissioning in spring 2019, however this announcement had already been made in the 2018 Budget, marking a significant delay in opening the consultation.

Additionally, the Government does not make it clear whether it supports the Committee’s recommendation to set measurable targets for skills transfer as oil production ceases and industry professionals seek new work in clean energy technologies. The Chair of the Committee asks the Minister to provide more information on what the Government is doing to support decommissioning and skills transfer as the sector prepares for its future.

Commenting on the response, Pete Wishart MP said:

“Though the oil and gas industry will have a challenging future, these new circumstances could bring
significant opportunities and help the Government meet the UK’s climate change targets.  If the economic potential of decommissioning and cleaner energies is to be harnessed, the Government must act now by providing strategic vision, and support for the industry.”

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Will Corbyn nationalisation kill the National Grid and SSE share prices?

Utilities companies like National Grid (LSE: NG) and SSE (LSE: SSE) have long been seen as reliable income providers, with great visibility of earnings and the ability to translate a high proportion of them to dividends.

National Grid, for example, is expected to provide a dividend yield of 5.6% this year, rising to 5.9% by 2021. SSE’s forecast yield is already even higher at 8.2%. But that would be nowhere near covered by an expected big dip in earnings, and is forecast to drop to 6.7% next year — but still pretty big, if relatively weakly covered.

Debts

SSE is already suffering with rising debts, and that’s added a bit of a drag to the share price. But both of these companies have suffered sharp share price falls in the past month — National Grid shares are down 6.1% with SSE down 7.4%, over a period in which the FTSE 100 gained 3%.

The recent dip was triggered when the BBC published an online article under the headline: “Labour to outline National Grid ownership plans,” reporting on Jeremy Corbyn’s apparent upcoming speech outlining his detailed nationalisation plans. It seems he changed his mind and decided to put off the subject until a later date, and the BBC pulled the article. But the damage was done.

Corbyn hasn’t spoken directly about SSE itself, but he has made clear his intention of nationalising the utilities business.

Popular

Whether Labour will win the next election is completely up in the air — but Corbyn’s chances might be high, with surveys suggesting around three quarters of the UK population are in favour of his nationalisation aims.

But it would be an enormous task. National Grid and SSE are the two biggest, with market capitalisation figures of £28.4bn and £11.8bn, respectively. Adding just the other FTSE 100 utilities firms to the list gets us a total of £56.9bn.

Then there are all the new upstart energy suppliers whose businesses will have to be bought out, and there are going to be plenty of other hefty costs too — so it’s going to be an expensive business.

Payment

Corbyn has mooted the idea of compensating shareholders with government bonds. Now, I don’t know about you, but I certainly don’t want any of those — though I suppose they can be sold easily enough.

One big uncertainty is what prices the companies might be bought out at. But it’s hard to imagine a possibility these days of the government being able to snap them up on the cheap at below market value. But those market values are already being damaged by Labour’s pronouncements.

A buyout of National Grid would be complicated by the fact that half the company’s business in in the USA, though that hurdle is not there with SSE.

Don’t panic

The two things that make me feel shareholders don’t have a huge amount to worry about is that there will surely be big legal challenges to anything institutional investors might feel is unfair, and that I expect it will all take a very, very long time.

In my view, either nationalisation won’t actually happen, or if it does, it will be at a fair price.

Financial Independence, Retire Early

If you’ve ever dreamt of retiring early, or if you’re already retired and protecting your financial independence is your aim, then this could be the report for you!

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All-Ireland electricity market sparks negative pricing

The new all-Ireland electricity market that came into effect last October has led to increased volatility in prices in the wholesale market, and a number of occasions when power companies were forced to pay commercial customers to accept their excess energy, according to Dublin-based energy trading company.

Under the Integrated Single Electricity Market (I-SEM), designed to boost efficiency and align Irish energy costs more closely with those in Europe, all generators, including wind companies, are required to price and sell their electricity output 12 to 36 hours ahead of actual delivery.

However, wind companies are often unable to accurately forecast their output up to 36 hours in advance.

“[When] wind output is very high we begin to see more circumstances whereby conventional power plants begin to offer their output for a negative price in an effort to avoid switching the unit off and having to go through a maintenance intensive operation to restart the facility when they are required ,as wind reduces,” said Ronan Doherty, chief executive of ElectroRoute, a Dublin-headquartered energy trading company.

Mr Doherty said that there have been 556 half-hour periods of negative pricing between October and mid-April in a market for power that has not been traded in advance. This is known as the balancing market.

Smart meters

While big companies can take advantage of power market fluctuations and secure negatively-priced energy, this is not currently an option for households. Still, Mr Doherty said that advent of smart meters, which will give consumers greater control over energy use, may in time provide an opportunity for households to benefit from periods of negative pricing in the balancing market.

Every domestic electricity meter in Ireland is set to be replaced by a smart meter by the end of 2020, according to ESB Networks.

While negative pricing is a common feature of the European energy market, it is a new phenomenon in Ireland.

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Britain Is Brimming With Natural Gas

Britain’s appetite for natural gas usually declines in the summer, but this season is different with a record number of LNG tankers due to land this month.

The incoming cargoes show no sign of slowing, and will keep the pressure on benchmark prices already trading below their five-year seasonal average. That’s good news for factories and households as Brexit clouds the nation’s economic outlook.

“We can expect a significant pressure on prices this summer,” said Murray Douglas, a research director for European gas at Wood Mackenzie Ltd. “The global LNG market is strong, we will still have a lots of LNG turning from the Asian to the European markets and we still see lots of LNG deals” and approvals for new projects.

Cargoes are heading to the U.K. and other northwest European nations because thanks to the extensive infrastructure and traded hubs they can absorb any global surplus as well as handle a growing worldwide production boom. Britain is still taking imports of the super-chilled commodity even after its gas export pipeline shut for repairs this month.

LNG prices in Asia, the biggest consumer of the fuel, have also been too low to spur traders to ship cargoes east. Cooler weather is also supporting demand in the U.K.

For projects due to reach FIDs this year, read this BloombergNEF report

While Asian LNG spot prices have regained their traditional premium over European hubs, Atlantic basin suppliers such as the U.S. and west Africa are still sending most of their cargoes to Europe, their nearest liquid market. Longer term, more plants are due to start producing LNG and a number of projects from Mozambique to Russia are nearing investment decisions this year.

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The truth about renewable subsidies

As Drax holds its AGM in London a new campaign calls for UK renewables subsidies to be diverted from biomass burning to genuinely renewable energy.

A surcharge on UK energy bills is funding subsidies for biomass electricity generation that is making climate change worse, polluting communities, destroying forests and harming wildlife.

In 2017, the UK Government granted around £1 billion in renewable subsidies to power stations – including Drax Power Station in Yorkshire – to burn millions of tonnes of wood for electricity.

Drax alone received £729 million – around £2 million per day – in subsidies to burn wood pellets and is now the world’s largest biomass burner.

Biodiversity hotspots

Despite claims by the biomass industry that they mostly burn “low-grade wood residues”, US conservation NGOs have proven that a significant proportion of wood pellets for Drax and other UK power stations comes from the clearcutting of whole trees from wetland forests in the Southern US.

These forests are at the heart of a biodiversity hotspot and are home to many endangered species, including salamanders, the Louisiana black bear and the Venus flytrap.

Meanwhile, new subsidies for onshore wind and solar power have been scrapped while the government is only planning to allocate £60m for the next round of renewable energy funding in May.

However, with a fixed amount of government money available for renewable energy under the Levy Control Framework, ending the generous biomass subsidies would automatically release around £800m for genuinely low-carbon wind, wave and solar power.

This would make a huge difference in reducing both our air pollution and our greenhouse gas emissions.

Sustainable?

Why are biomass power plants receiving these huge renewable subsidies for burning wood?

Governments and the biomass industry argue that converting old coal power plants to burn wood is ‘green energy’ which can help reduce our carbon emissions.

This argument is based on the mistaken belief that burning wood is ‘carbon neutral’ because there is an assumption that new trees will absorb the carbon emissions produced by the burning.

This has allowed the biomass industry to present itself as a ‘low carbon’ and ‘sustainable’ alternative to fossil fuels, with the Minister of State for Climate Change and Industry describing biomass as “a cost-effective and transitional means of decarbonising the electricity grid”.

Drax’s Chief Executive, Will Gardiner, claimed that the power station is: “the biggest decarbonisation project in Europe” and a “key part of the climate change solution.”

Green deserts 

However, the truth is that there is nothing renewable or sustainable about biomass burning. By contrast, biomass comes at an enormous cost for communities, wildlife, forests and the climate.

The biomass industry claims that it is actually helping to increase forest growth in America by felling large areas of forest and replanting them with new trees.

Yet, this supposed forest growth disguises the fact that when new trees are planted in these areas, they are often monoculture plantations which cannot support biodiverse species and are little more than ‘green deserts’ for wildlife.

The destruction of forests to provide fuel for biomass burning is also harming communities who live near the US wood pellet production sites and the UK biomass power stations.

Wood pellet production causes noise and water pollution for local communities in the Southern US, while both pellet mills and biomass power stations produce dangerous air pollution, including small particulates which can enter the bloodstream and cause cancer, heart disease and neurological problems.

Climate impact

The fact that biomass burning is increasing climate change is equally alarming. Far from being carbon neutral, burning wood actually emits more CO2 than coal per unit of energy generated because the higher moisture content means that burning it is less efficient.

In 2017, Drax alone emitted 11.7 million tonnes of CO2  from burning wood. This is more than the total amount by which the UK should be reducing emissions every year in order to meet its carbon budgets.

Biomass proponents claim that these emissions will be reabsorbed by forest regrowth or by planting new trees, but new trees will take decades or even longer to reabsorb the emissions, if they ever can. This is time which we do not have if we are to avoid the worst effects of climate breakdown.

The climate impact of burning wood for energy was highlighted by 800 scientists in a letter to the European Parliament in January 2018: “Even if forests are allowed to regrow, using wood deliberately harvested for burning will increase carbon in the atmosphere and warming for decades to centuries […] even when wood replaces coal, oil or natural gas. The reasons are fundamental and occur regardless of whether forest management is “sustainable.”

Burning wood not only adds to carbon emissions, but it also destroys the very forests which we need to absorb our greenhouse gases.

Bhis technology has not been tried in large power stations and many experts regard it as unfeasible, but the biomass industry argues that new carbon capture and storage technology will allow it to remove its emissions from the atmosphere.

Climate solutions 

We already have the most powerful means to remove carbon dioxide from the atmosphere and reduce climate breakdown – forests.

Protecting and restoring the world’s forests is as important as phasing out fossil fuels if we are to keep global temperature rises to 1.5 degrees, as 40 international scientists argued in response to the IPCC report in October: “While high-tech carbon dioxide removal solutions are under development, the “natural technology” of forests is currently the only proven means of removing and storing atmospheric CO2 at a scale that can meaningfully contribute to achieving carbon balance.”

In the light of the IPCC report’s dire warning that we are running out of time to save the planet from the worst effects of climate breakdown, it is essential that we stop wasting our money on the false solution of biomass burning and instead redirect subsidies to genuinely renewable wind, wave and solar power.

Over 120 international environmental groups emphasised in their position statement on forest biomass energy in October 2018: “Subsidies for forest biomass energy must be eliminated. Protecting and restoring the world’s forests is a climate change solution, burning them is not.”

Taking action

It is more urgent than ever that we call for an end to subsidies for burning wood, as Drax prepares to hold its AGM in London this coming week.

If you would like to take action to save forests and our climate from biomass burning, Biofuelwatch has launched a new campaign for people to ask their MPs to help redirect subsidies from biomass power stations to genuine renewables.

Last year, the government made a positive first step by effectively ruling out future subsidies for large-scale biomass electricity. This sends a strong message that biomass burning is not part of the solution to climate change.

However, the change in the subsidies rules only applies to new projects and existing biomass power stations are currently set to continue receiving many billions of pounds in subsidies between now and 2027, unless we can redirect them to wind, wave and solar power. Fortunately, this could be done easily through secondary legislation.

This is why we urgently need your help to contact your MP and if you’re in London on Wednesday, we’d love to see you at our protest outside the Drax AGM.

Please feel free to get in touch with Biofuelwatch if you have any questions or would like to organise a workshop or screening of the award-winning documentary: “Burned: are trees the new coal?

Together, we can persuade parliament to tackle climate change, save forests, reduce pollution and combat environmental injustice by ending subsidies for burning wood.

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UK power stations have gone without coal for the longest period since the Industrial Revolution

BRITAIN’s power stations have gone without coal for the longest period since the Industrial Revolution – it emerged yesterday.

Ministers hailed new industry figures which revealed the bulk of electricity over the Easter weekend was generated by renewable ‘green’ energy and nuke power.

Not a single kilo of coal had been burned for 82 hours.

In China, around 75 per cent of its electricity comes from coal.

The staggering figures were championed by Health Secretary Matt Hancock on Twitter.

The Tory leadership contender said: “One reason the UK has cut carbon emissions more than almost anywhere. It’s worth celebrating.”

Under current Government plans, all coal power plants are due to close in 2025 – five years ahead of Canada.

 

 

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5 renewable energy developments to look out for in 2019

2018 was a record-breaking year for the UK, with renewable energy leading the charge. In fact, it was the greenest year on record for UK energy generation. 2018 was also a significant year for Opus Energy (you can read more about that here).

There were several record-breaking events in the world of energy. The UK’s renewable energy capacity exceeded that of fossil fuels; there were new generation records set for wind and solar over the summer months as the UK enjoyed a heatwave.

With such an impressive year behind us, we’re hoping to see more of the same in 2019 and beyond. Here are some of the other exciting prospects in the world of renewable energy that we’re hoping to see next year.

Storage becoming increasingly viable

With the growing demand for electric cars helping to drive the production of better batteries, prices are falling, and consumers are beginning to experiment with solar and storage solutions at home. Equally, storage is necessary for the consistent supply of energy to the Grid. Renewable sources can be intermittent, so saving the energy for when the weather isn’t favourable is important.

Drax is one of the companies at the forefront of this and has proposed the development of new gas generation assets at its Yorkshire power plant. This would be accompanied by two battery storage facilities, as well as a power station the stores energy from pumped hydro power.

Opus Energy, too, has signalled its intent to be a part of the storage revolution. We’re currently running a trial with one of our customers to explore the benefits of battery storage for our customers and our business.

The potential success of storage goes beyond the UK; it is expected to help prove the viability of renewable energy as a major player in the generation mix of many countries, including Egypt and Ireland. Watch this space.

Progress in Central and South America

South America is quickly catching up with the rest of the world, with continued economic growth driving increased energy consumption, and an ever-more urgent need to ensure that our demand for energy doesn’t cause stress to the planet.

However, the current energy landscape is failing to keep up with energy demand and consumption. In Argentina in 2015, fossil fuels were 87% of the energy mix (although some companies are trying to change this – for example, this wind  one this Argentinian wind power generator is expanding its portfolio from 100 MW to 250 MW over the coming years.

The story is the same for many South American countries, with the pressing need for an energy revolution driving change – but there is potential everywhere. Chile, for example, has limited fossil fuel resources but benefits from considerable hydropower, solar and wind resource. Making the most of these resources will be vital across the continent.

The continued drive towards energy efficiency

Using energy efficiently and reducing energy use where possible is just as important as using cleaner energy sources.

This is part of the logic behind the UK’s smart meter rollout, helping everyone to become more aware of their energy use and how using energy at different times can be both cheaper and more environmentally friendly.

National Grid, the UK’s energy system operator, has created a carbon-intensity toolwhich forecasts how “clean” or “dirty” electricity will be a few days in advance. Similarly, Drax’s Electric Insights tool provides a near-real time picture of the UK’s energy consumption and its sources.

According to Carbon Brief, an environmental organisation, reduced energy use and the rise of renewable energy sources have been the biggest reasons behind the UK’s reduced greenhouse gas emissions.

Increased efficiency, therefore, will be on the agenda for many businesses and households. Not just to mitigate any price increases – but to help reduce environmental impact.

The Middle East: Falling fossils and the renewable rush

The Middle East is better known for its rich fossil fuel resources, with plentiful oil and gas deposits. Some might say it falls behind the rest of the world in terms of renewable energy investment, but there are reasons to be optimistic.

Downward pressure on oil and gas prices has emphasised the importance of a diversified energy network, and self

As a large geographic region which spans continental borders, the climate of many of the countries is conducive to renewable energy generation.

For inland regions, there exists the strong potential for both conventional ‘photovoltaic’ solar power, and the less widely-used ‘concentrated solar power’, thanks to the high levels of solar irradiance across the region. According to the Renewable Energy Network, a number of solar projects are already in the planning or construction stages.

Electric vehicles hitting the highways

As battery storage technology continue to improve, one of the most visible applications of the technology is in electric vehicles.

In the UK, there are more than 130,000 registered EVs. This increase in the number of electric vehicles on the road has a twofold benefit in terms of energy consumption.

Firstly, it reduces fossil fuel use in the transport sector, which reduces the use of fossil fuels overall. While this electrification places greater demand on the energy sector, the continued reduction in fossil fuel use (in the UK, in particular) means that the average emissions associated with EVs has fallen by 50%.

Secondly, it makes a difference to local air quality. Concerns were repeatedly raised about the effect of diesel and petrol vehicles and the potential dangers caused by their exhaust fumes.

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Pioneering Orkney energy project offers glimpse of fossil fuel-free future

IT is the pioneering project that offers a tantalising glimpse of a cleaner, greener future free of mass pollution.

Experts have launched the first phase of a ground-breaking £28.5 million energy system which it is hoped will eliminate the need for fossil fuels in Orkney — and eventually the whole of the UK.

The scheme includes plans for a locally-powered electric bus and electric bike “integrated transport system” on the islands, as well as the mass roll-out of electric vehicles.

Meanwhile, up to 500 domestic and 100 large-scale batteries will be used to store renewable energy, allowing it to be pumped into the grid when winds drop or the sun disappears.

Dubbed the “energy system of the future”, those involved hope it will prove such a success it will eventually be rolled out across the UK and beyond – helping to create a future powered entirely by renewables.

Mark Hamilton from Solo Energy, one of the firms involved in the ReFLEX (Responsive Flexibility) scheme, said it was a “world-leading example” of how innovation can drive the transition to green energy.

He said: “In Orkney, we’ve got a very high level of renewable generation from wind and solar, and other forms of generation such as wave and tidal.

“All of these renewable generation sources are obviously low carbon, but they are intermittent – so the wind comes and goes, the sun comes and goes.

“The ReFLEX project involves deploying battery systems and smart electric vehicle charging to balance the intermittency of renewables.

“So what Solo does, we have a software platform which we use to control battery systems across the grid to respond to the intermittency of renewable generation.

“So basically, when there’s lots of renewables generating, we charge battery systems across the grid, store that low-cost renewable energy, and then release it back to the grid when renewable generation decreases.”

Mr Hamilton said 25 per cent of the UK’s current electricity needs are met by renewable energy.

He said it would realistically be 20 to 30 years before the country’s entire energy system could become fully reliant on renewables.

He said: “We can have all the wind and solar farms we want but unless we have the means to store and balance renewables we will never fully wean ourselves off fossil fuels and get to the root of the climate change problem.”

The Orkney scheme uses a “virtual power plant” model which sees rechargeable lithium-ion battery systems controlled remotely using special software.

This allows them to be charged when renewable energy – such as wind – is abundant. They can then release that energy when the supply drops.

Orkney is already a world-leader in wave and tidal technology and boasts a high uptake of electric vehicles.

The latest project aims to deploy up to 600 extra electric vehicles and 100 flexible heating systems, as well as a Doosan industrial-scale hydrogen fuel cell which produces eco-friendly energy and heat.

Once demonstrated in Orkney, experts hope the “virtual energy system” – which aims to link up local electricity, transport, and heat networks into one controllable, overarching system – will be rolled out across the UK and internationally.

To encourage uptake, electric vehicles will be provided through a low-cost leasing arrangement, while batteries will be provided free on the basis customers will benefit from lower energy bills.

“50% of the project is being funded privately indicating the appetite that exists within the partners to make this project work.

“Orkney has already demonstrated high commitment for local sustainable energy solutions and the county is well on its way to decarbonising each aspect of the energy system.

“The target for Orkney is to have a negative carbon footprint and this pioneering project will build upon the existing local energy system, local infrastructure and local expertise, to accelerate this transition to a fully sustainable and flexible energy system.”

The Scottish Government aims to generate 50% of the country’s overall energy consumption from renewable sources by 2030.

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Centrica to close British Gas offices and training centre near Armley Gyratory

he British Gas offices and training centre off Armley Gyratory are set to close.

The large complex on Canal Street, where hundreds of staff are based, will be closed down with staff redeployed to the company’s British Gas site in Holbeck, a shock announcement confirmed this afternoon.

Centrica – which runs British Gas and Scottish Gas – confirmed the closure had been announced to staff at the west Leeds site today but added that no job losses had been announced ‘in relation to that site.

However, a staff member at the Canal Street site – who wished to remain anonymous – told LeedsLive that only certain roles would be available in Holbeck.

She alleged: “There is only certain positions available in New Bridge House. Not everyone from Canal Street will be taken over.

“That is all we really know for now though. The management are keeping it very hush hush.”

Centrica is also consolidating its two Glasgow sites with the loss of 400 jobs – a total of 500 jobs will be lost across the UK, a spokeswoman confirmed.

She told LeedsLive: “We’re consolidating our Leeds based sites into one location and our New Bridge House site is situated close by.”

Last year the company announced plans to axe 4,000 jobs – just over half of them in the UK.

The 500 announced today are part of the 4,000 planned.

Armley councillor Alice Smart said: “This is the first we’ve heard about it – the Armley councillors and Rachel Reeves. We’re really concerned about potential job losses.

“There are hundreds of jobs there and there’s a lot of local people that rely on them.”

She also confirmed that Leeds City Council and GMB will be speaking to Centrica and looking for job protection guarantees.

In a statement, Centrica said it had proposed ‘a number of changes across the UK’ to staff, including ‘role reductions to reduce management layers, role reduction to reduce back office functions to improve efficiency’.

She said: “This difficult decision was made because we need to respond to the growing challenges we face. Our customers want more from us. Competition is fierce and we’re operating under a price cap.”

Justin Bowden, GMB National Secretary, said: “GMB is confident that the vast majority of staff affected by these closures can be redeployed within British Gas and we will do everything in our power to ensure that every GMB member who wants to stay with the company has a job.”

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Pioneering Orkney energy project offers glimpse of fossil fuel-free future

IT is the pioneering project that offers a tantalising glimpse of a cleaner, greener future free of mass pollution.

Experts have launched the first phase of a ground-breaking £28.5 million energy system which it is hoped will eliminate the need for fossil fuels in Orkney — and eventually the whole of the UK.

The scheme includes plans for a locally-powered electric bus and electric bike “integrated transport system” on the islands, as well as the mass roll-out of electric vehicles.

Meanwhile, up to 500 domestic and 100 large-scale batteries will be used to store renewable energy, allowing it to be pumped into the grid when winds drop or the sun disappears.

Dubbed the “energy system of the future”, those involved hope it will prove such a success it will eventually be rolled out across the UK and beyond – helping to create a future powered entirely by renewables.

Mark Hamilton from Solo Energy, one of the firms involved in the ReFLEX (Responsive Flexibility) scheme, said it was a “world-leading example” of how innovation can drive the transition to green energy.

He said: “In Orkney, we’ve got a very high level of renewable generation from wind and solar, and other forms of generation such as wave and tidal.

“All of these renewable generation sources are obviously low carbon, but they are intermittent – so the wind comes and goes, the sun comes and goes.

“The ReFLEX project involves deploying battery systems and smart electric vehicle charging to balance the intermittency of renewables.

“So what Solo does, we have a software platform which we use to control battery systems across the grid to respond to the intermittency of renewable generation.

“So basically, when there’s lots of renewables generating, we charge battery systems across the grid, store that low-cost renewable energy, and then release it back to the grid when renewable generation decreases.”

Mr Hamilton said 25 per cent of the UK’s current electricity needs are met by renewable energy.

He said it would realistically be 20 to 30 years before the country’s entire energy system could become fully reliant on renewables.

He said: “We can have all the wind and solar farms we want but unless we have the means to store and balance renewables we will never fully wean ourselves off fossil fuels and get to the root of the climate change problem.”

The Orkney scheme uses a “virtual power plant” model which sees rechargeable lithium-ion battery systems controlled remotely using special software.

This allows them to be charged when renewable energy – such as wind – is abundant. They can then release that energy when the supply drops.

Orkney is already a world-leader in wave and tidal technology and boasts a high uptake of electric vehicles.

The latest project aims to deploy up to 600 extra electric vehicles and 100 flexible heating systems, as well as a Doosan industrial-scale hydrogen fuel cell which produces eco-friendly energy and heat.

Once demonstrated in Orkney, experts hope the “virtual energy system” – which aims to link up local electricity, transport, and heat networks into one controllable, overarching system – will be rolled out across the UK and internationally.

To encourage uptake, electric vehicles will be provided through a low-cost leasing arrangement, while batteries will be provided free on the basis customers will benefit from lower energy bills.

Led by the European Marine Energy Centre (EMEC), the ReFLEX Orkney scheme brings together an expert consortium including Solo Energy, Aquatera, Community Energy Scotland, Heriot-Watt University and Orkney Islands Council – as well as multi-national energy company Doosan Babcock. It is funded by UK Research and Innovation through the Industrial Strategy Challenge Fund.

Scotland Office minister Lord Ian Duncan said £14.3 million of UK Government money was being pumped into the project to help “establish the Scottish Islands as an energy powerhouse”.

UK energy minister Claire Perry said: “What we are seeing here on Orkney is a test bed for the energy system of the future.

“These smart systems are a key part of our modern Industrial Strategy and will provide cheaper, greener and more flexible access to energy for everyone.

“What we learn from these innovations could one day be rolled out across the UK and exported around the world and we’ll be able to say it was ‘Made in Orkney’.”

Professor David Flynn of Heriot-Watt University said it had the potential to “deliver global change in how we achieve our low carbon objectives”.

Speaking on behalf of the ReFLEX Orkney project partners, Neil Kermode, managing director at EMEC, said: “We’re delighted that UK Research and Innovation have funded this project.

“This new model will demonstrate how we can better interact with, own and manage our integrated energy systems locally, both at individual and community level.

“50% of the project is being funded privately indicating the appetite that exists within the partners to make this project work.

“Orkney has already demonstrated high commitment for local sustainable energy solutions and the county is well on its way to decarbonising each aspect of the energy system.

“The target for Orkney is to have a negative carbon footprint and this pioneering project will build upon the existing local energy system, local infrastructure and local expertise, to accelerate this transition to a fully sustainable and flexible energy system.”

The Scottish Government aims to generate 50% of the country’s overall energy consumption from renewable sources by 2030.