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Octopus Energy reveals plans to expand into green hydrogen

The Octopus Energy Group is set to expand into the green hydrogen sector, touting the benefits of the technology for “parts of the economy electrification can’t reach”.

It is planning to bring to market a locally distributed ‘green hydrogen as a service’ proposition as part of a new division of the company, Octopus Hydrogen.

Set to launch in Autumn 2021, the green hydrogen is designed to serve sectors such as heavy goods transportation, energy storage, industrial applications and aviation.

The move follows Octopus Energy Group acquiring Octopus Renewables, bringing a portfolio of more than 300 clean energy assets with a combined capacity of 2,800MW across six countries together with the company’s supply business which currently serves two million domestic customers.

Its Kraken platform is now used by 2.2 million customers in the UK alone, with the software used by energy companies including E.On and Good Energy in the UK, and companies like Origin Energy and Hanwha Corporation in Australia.

Together, its large renewables portfolio and Kraken platform means the Octopus Energy Group is “uniquely positioned to drive down costs and help customers drive the transition to a competitive and 100% green economy”, the company told Current± in a statement.

Green hydrogen picks up pace in the UK

Green hydrogen is increasingly drawing focus from both the government and companies looking to invest in a solution for decarbonising challenging sectors. In March, the UK government announced a £171 million Industrial Decarbonisation Fund for green tech projects focused on hydrogen and carbon capture and storage (CCS), which built on the National Infrastructure Strategy announced in November 2020.

Among the nine projects set to be funded by the scheme are Zero Carbon Humber – which will include one of the world’s first at-scale low carbon hydrogen production plants, as well as CO2 and hydrogen pipelines – and the South Wales Industrial Cluster – which will see solar giant Lightsoure bp develop solar powered green hydrogen for direct use in the steel manufacturing on site.

Other energy suppliers are also becoming increasingly interested in the sector, with ScottishPower submitting a planning application for up to 40MW of solar along with up to 50MW of battery storage and a 20MW electrolyser as part of its Green Hydrogen for Scotland project this April. Hydrogen companies are also expanding their operations, with Logan Energy announcing former SSE CEO Ian Marchant is to become chair of the board this week.

In a report produced by the International Renewable Energy Agency in March, it suggested that if global warming is to be curbed, green hydrogen must take over from fossil fuels in a number of sectors. It expects 30% of electricity to be dedicated to green hydrogen and the fuel’s derivatives such as ammonia and methanol by 2050. In order to reach this point, the green hydrogen sector needs to scale up massively, with almost 5,000GW of hydrogen electrolyser capacity needed, up from just 0.3GW today.

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UK to toughen targets on greenhouse gas emissions for next 15 years

Carbon dioxide to be cut by 78% by 2035 compared with 1990 levels, the prime minister is to say later this week

The UK is to toughen its targets on greenhouse gas emissions for the next 15 years, the first major developed economy to do so, the Guardian understands.

Following recommendations of the government’s statutory climate advisors, carbon dioxide is to be cut by 78% by 2035 compared with 1990 levels, the prime minister will say later this week – an increase from the current target of a 68% reduction by 2030.

The move is intended to help spur further action by other governments, ahead of vital UN climate talks, called Cop26, to be hosted by the UK in Glasgow this November.

At Cop26, nations will be asked to set out national plans for carbon curbs over the next 10 years. Known as nationally determined contributions, or NDCs, these plans form the bedrock of the Paris agreement, but current plans from most countries are far too weak to fulfil the aims of the treaty.

Joe Biden is expected to set out the US’s NDC later this week, ahead of a virtual climate summit of 40 world leaders he is hosting. China is also expected to submit an NDC in the coming months, and new NDCs for Japan, South Korea and Canada are believed to be imminent.

The UK already had an NDC, stipulating 68% cuts by 2030, but by setting out a further target for 2035 the prime minister will fulfil the legal obligations set out in the 2008 Climate Change Act. Under the act, governments must set five-year carbon budgets stretching beyond the term of the current parliament.

The UK’s sixth carbon budget will run to 2035 and was presented last December by the Committee on Climate Change, the independent advisory committee set up under the act.

The Department for Business, Energy and Industrial Strategy refused to confirm the plans, which the Guardian was informed of by independent sources. A government spokesperson said: “We will set our ambition for Carbon Budget 6 shortly, taking into account the latest advice from the Climate Change Committee.”

However, Labour accused the government of setting targets without putting in place the policies needed to deliver them. Ed Miliband, shadow business secretary, said: “The character of this government on climate change is now clear: targets without delivery. So while any strengthening of our targets is the right thing to do, the government can’t be trusted to match rhetoric with reality. Ministers have failed to bring forward an ambitious green recovery. We need a government that treats the climate emergency as the emergency it is.”

The government has caused consternation among senior climate experts around the world in recent months, through a series of measures that have appeared at odds with its commitments to tackling the climate crisis. Senior ex-diplomats told the Guardian that the decision to slash overseas aid was causing particular concern among developing countries ahead of the Cop26 summit.

Observers are also concerned at actions including the green light for a new coalmine, now subject to a public inquiry; new licences for oil and gas exploration in the North Sea; the UK’s support for making Australia’s climate sceptic former minister Matthias Cormann head of the OECD; the scrapping of the green homes grant, the government’s only “green recovery” measure; airport expansion; and slashing support for electric vehicles.

Chris Venables, of the Green Alliance thinktank, said: “It’s great news that the government will put the 2035 target into law, and including aviation and shipping is genuine global climate leadership. But it’s increasingly jarring for this long-term ambition not be backed up by action in the here and now. The clock is running down to Cop26 in November, and a detailed and fully funded net zero plan is needed well before then.”

Ed Matthew, campaigns director for the climate change think tank E3G said: Setting an ambitious emission reduction target would boost the UK’s diplomatic drive to persuade other countries to set out ambitious targets of their own. That is one of the big tests of UK climate diplomacy ahead of the Cop26 climate summit. The UK now has the opportunity to spark a global green industrial revolution but ultimately its credibility will rest on action. It must now put in place the policies and investment needed to achieve the target. That is the mark of true climate leadership.”

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Energy networks make it easier for companies to provide flexibility services

ENA has made it easier for companies to provide flexibility services to the energy sector by refreshing and streamlining a common contract used across the sector.

The updates, published today, offer more transparency and will unlock liquidity in local markets for flexibility, ultimately pushing down energy bills in the long term.

The standard contract has been created through ENA’s leading Open Networks project, with input from distribution network operators and National Grid Electricity System Operator, to provide a consistent GB-wide core agreement for those wishing to provide vital flexibility services to the networks. It will help take the transition to the smart grid to the next level and marks another step forward in bringing consistency across the industry.

The new contract has been developed with feedback from a range of industry stakeholders including Ofgem and the Department for Business, Energy and Industrial Strategy.

Key updates include:

  • simplifying the core contract, providing increased alignment with ESO approach
  • making clauses more accessible across the agreement
  • making the process more accessible to aggregators

The energy networks have made significant progress on flexibility services since the launch of a dedicated workstream as part of ENA’s Open Networks project at the beginning of 2019. With over 2GW of flexibility tendered by distribution network operators last year, the workstream has played a key role in helping all distribution network operators prioritise and deliver their flexibility commitments.

Farina Farrier, Head of Open Networks Project at Energy Networks Association, said:

“The UK is already a world leader when it comes to energy flexibility and as part of the UK’s commitment to Net Zero, the whole of the energy industry is behind making it easier and more accessible to work with network operators. We’ve got lots of work ahead of us but by really focusing on providing a consistent, accessible way of working together, we can maintain that world-leading position and power towards Net Zero emissions.”

Alex Howison, Flexible Solutions Manager at Scottish and Southern Electricity Networks said:

“It’s brilliant to be able to take the lead in actioning another positive step towards a ‘whole industry’ standard agreement being finalised. Flexibility is critical for enabling the UK to reach Net Zero and is vital to help customers get the most from new technologies – while helping networks to manage their systems better and plan investment.

“The momentum ENA’s Open Networks project has built, and the pivotal role it plays in the energy transition, will continue into 2021 and this will be another year of action and delivery for the flexibility services workstream.”

A public consultation on the next version of the common contract will follow in August, with plans to launch at the end of the year. Its associated contractual evolution report will be launched later this month.

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RWE absorbs innogy activities in final move of E.On asset swap

RWE has today (2 July) taken over the activities of innogy, marking the conclusion of its asset swap with E.On.

The German energy company sold its remaining stake in innogy to E.On as part of the deal, but has today integrated innogy’s renewables and gas storage businesses into its own operations, with over 2,700 employees switching over.

“The new RWE has been completed,” RWE’s CFO, Markus Krebber, said. “It is a new, bigger and more diverse company, with a clear goal.

“We have a wonderful starting point: a huge worldwide renewables portfolio, two teams that complement each other perfectly with many years of experience, and a strong investment programme,” he continued.

Innogy’s stake in the Austrian power utility Kelag has also been transferred today, which RWE said supplements the portfolio “perfectly” with its hydroelectric power business.

The swap – which was been in the works since 2018 and was approved in September 2019 by the European Commission- also saw RWE acquire E.On’s renewable energy activities in 2019.

RWE is aiming to be carbon neutral by 2040, and now is largely focused on power generation over its networks business, which has been transferred to E.On.

Meanwhile, E.On saw a sharp increase in its sales and earnings in Q1 2020 which it said was due to its takeover of innogy and npower, a marked improvement in light of the latter causing its net income to fall by 49% in its financial results for 2019.

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Centrica launches new Energy as a Service bundle to help businesses build back better

Centrica Business Solutions (CBS) has launched a new Energy as a Service bundle, specifically for those that are looking to make an investment in energy saving technologies.

The capital-free energy generation product is designed to help businesses ‘build back better’ in response to COVID-19.

It will offer a bundle to companies that includes the design, installation and financing of on-site power generation, helping them to decarbonise and reduce their energy bills without the upfront capital expenditure of equipment.

Typically, this would see CBS installing on-site generation technology such as Combined Heat and Power units for a customer, which it will then manage as well as providing any top up electricity or gas needed. The business repays the cost of the technology through the energy savings across the length of the contract.

Additional savings will be made through the use of the generation technologies in wholesale and demand response markets, said CBS.

According to the company, by choosing the bundle, savings can be made in the short term that can then be used to support more long term carbon cutting measures, such as the installation of PV panels or enabling electric vehicles.

“For many organisations, the last few months have been extremely challenging and so reducing costs and improving business resilience will be critical to recovery,” said Alan Barlow, director of UK & Ireland for CBS.

“By helping with the upfront investment in energy solutions, we can support them towards improved energy security and cost savings. Our aim is to support customers who wish to Build Back Better, by transitioning to a sustainable future without the need for significant capital.”

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EDF preparing cost-cutting plan worth up to three billion euros: sources

PARIS (Reuters) – French state-controlled utility EDF (EDF.PA) has started preparing a cost-cutting plan worth between 2 and 3 billion euros ($1.13 billion), two sources told Reuters, confirming a report by French newspaper Le Monde.

The savings plan could entail divestments of major assets or a hiring and investment freeze, while seeking cost cuts at all levels, Le Monde said on Monday.

An EDF spokesman told Reuters there was a savings plan in the works, but said it was too early to provide details.

EDF, which operates all of France’s 57 nuclear reactors that account for around 70% of the country’s electricity needs, earlier withdrew its financial targets for 2020 and 2021 as the fallout from the coronavirus outbreak hit key areas of its businesses.

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Vattenfall gets green light for 1.8GW Norfolk Vanguard offshore wind farm

BEIS gives nod to huge 1.8GW wind farm proposed by Swedish energy company, as it delays approval for Ørsted’s Hornsea Three project for the fourth time

Vattenfall has been given the all clear to build the mammoth 1.8GW Norfolk Vanguard offshore windfarm off the east coast of England.

Planning consent was granted earlier this week by Business Secretary Alok Sharma, following a decision in June to postpone the decision by a month.

The Swedish energy giant intends to install between 90 and 180 turbines across an area of just under 600 square kilometres located 47 kilometres from the Norfolk coast. The project is expected to generate enough power for roughly 1.95 million homes.

Gunnar Groebler, senior vice-president for Vattenfall’s wind business, said the firm was delighted to clinch planning consent for the development, which is scheduled to come online in the mid-2020s.

“This decision justifies the confidence that we have in the offshore wind sector in Britain, and we’re looking forward to developing the project and benefiting the local community,” he said.

“Decarbonising our economies starts with one of the most essential resources – electricity,” he added. “Today’s news sends a strong signal that the UK is serious about its climate ambitions and is open for business to power a green economic recovery.” 

Vattenfall had previously questioned the government’s plans for the offshore wind sector after suffering a second round of delays to the Norfolk Vanguard project last month.

Norfolk Vanguard’s sister project, the proposed 1.8GW Norfolk Boreas farm, has also been stung by significant delays to the government consenting procedure. In May, the Department for Business, Energy, and Idustrial Strategy (BEIS) extended the examination period by five months to October, citing the cancellation of hearings due to the coronavirus.

Danielle Lane, country manager and head of offshore wind for Vattenfall in the UK, urged the government to speed up its approvals process. “It’s now vital that other shovel-ready renewable and low-carbon projects are also given the go-ahead as soon as possible,” she said. “Delays of even just a month or so can set back big infrastructure developments by years in some cases. The UK has to go much further, much faster, if it’s going to reach its net zero targets.”

Lane stressed that the offshore wind projects promised to deliver a significant boost to the local economy. “Today is also great news for people living locally, who we’ve been working with over the last four years to develop this project,” she said. “They can look forward to a multi-billion pound economic boost, bringing with it hundreds of new long-term jobs, driving forward a green revolution and helping to level up UK opportunities.”

The developer expects Norfolk Vanguard to generate more than 400 jobs in the onshore construction phase and a further 150 jobs once operational, once combined with Norfolk Boreas’ workforce.

Hugh McNeal, chief executive at trade body RenewableUK, commended government’s decision to approve Norfolk Vanguard and urged it to reach a similar conclusion for Ørsted’s 2.4GW Hornsea Three project, which was subjected to further planning delays this week.

“Investments in major clean energy projects like these are great examples of how we can get the economy moving again, and the Secretary of State’s announcement will boost our ability to meet the government’s 2030 target of 40GW of offshore wind,” McNeal said. “The landmark decision on Norfolk Vanguard means the UK is taking a significant step closer towards our net zero emissions target, and confirmation of a positive decision on Hornsea Three will get us there even faster.”

In a blow for the Danish energy developer, BEIS extended the deadline for its decision on the 300-turbine Hornsea Three project to 31 December 2020 for the fourth time on Tuesday.

Sharma confirmed, however, that he was “minded to approve” the project, subject to further information being submitted by the Danish energy company by the end of September. The new decision date, BEIS said, would allow time for further consultations with interested parties after the new information was provided.

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BP and Shell Write-Off Billions in Assets, Citing Covid-19 and Climate Change

The moves were seen as a possible turning point as plummeting demand makes big oil companies admit they’re not worth what they used to be.

Two of the world’s largest energy companies have sent their strongest signals yet that the coronavirus pandemic may accelerate a global transition away from oil, and that billions of dollars invested in fossil fuel assets could go to waste.

This week, Royal Dutch Shell said it would slash the value of its oil and gas assets by up to $22  billion amid a crash in oil prices. The announcement came two weeks after a similar declaration by BP, saying it would reduce the value of its assets by up to $17.5 billion. Both companies said the accounting moves were a response not only to the coronavirus-driven recession, but also to global efforts to tackle climate change.

Some analysts say the global oil and gas industry is undergoing a fundamental transformation and is finally being forced to reckon with a future of dwindling demand for its products.

“I think we may look back on this as the turning point, the moment the industry finally started to say that real assets with real dollar figures associated with them are likely to be ‘stranded'”—or left undeveloped—”in a decarbonizing world,” said Andrew Logan, senior director of oil and gas at Ceres, a sustainable business advocacy group that has represented major investors in their engagement with oil companies. “This is a huge turnaround from the industry’s previous stance, which had been that no existing assets were likely to be stranded, that there may be risks in the future, but not in the here and now. That acknowledgment, that the risk is real and it’s here in the present, is a really big deal.”

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Energy UK asks government to enable payment holiday scheme

UK energy companies are asking the government to support a £100m loan scheme that will enable businesses and households affected by the Covid-19 coronavirus pandemic to take a payment holiday.

As reported by the Financial Times, energy industry trade body Energy UK has allegedly consulted with the UK Government to set up the programme, as the number of people cancelling their direct debit plans increases.

An Energy UK spokesperson said: “We have been in contact with the Government, Ofgem and Citizens Advice on what actions, protections and practical steps suppliers can take to support customers during these challenging times. Suppliers will be doing all they can to identify customers in vulnerable circumstances and provide support where possible on a case-by-case basis.

“On behalf of the industry, we have been also having discussions with the Government to explore if any additional financial support could be required to help these customers over the coming months.”

The plan would be for the government to lend money to energy suppliers that will repay once customers resume their payment plans.

The UK Government had already put in place a set of financial measures to help the economy during the pandemic, unveiling on 17 March its plan to give out £330bn in loans to businesses.

As reported by the Financial Times, the Department for Business, Energy and Industrial Strategy said: “We have been clear we will do whatever it takes to get us through this pandemic and have put in place an unprecedented package of support for businesses, including £330bn of loans and guarantees and paying 80 per cent of the wages of furloughed workers.

“We continue to engage with the energy sector to understand how suppliers and their customers could be further supported.”

The energy sector has already set up contingency plans to help customers during the pandemic.

Energy UK chief executive Audrey Gallagher said: “The sector is very conscious of the potential consequences for customers confined to their homes for prolonged periods.

“In particular, customers in vulnerable circumstances and those on prepayment meters may need additional help and support with repayments or keeping meters topped up.”

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Energy firms’ request for a bailout is rebuffed by ministers

Cash-strapped energy firms have been denied a state bailout amid concerns they could go bust if thousands of customers are unable to pay their bills.

Suppliers had sought a special taxpayer-backed rescue fund as British workers brace for economic hardship and businesses shut their doors – but the Government has refused to provide one and is instead directing them to a rescue loan scheme already on offer to other companies, emails show.

Last week, trade organisation Energy UK approached the Government to request its own loan scheme worth £100m a month which could be used to offer repayment holidays for struggling customers.

But energy suppliers have instead been told to rely on support already being made available more widely.

In an email to the energy suppliers, Dan Monzani, director of energy security at the Department for Business, Energy and Industrial Strategy (BEIS), said: “I would like to draw your attention to the business support measures announced by HM Treasury on March 17.

“We are aware that energy companies do not always think they are eligible when in fact you may be.”

The email then goes on to describe the range of support measures available to companies in the UK, including the Covid Corporate Finance Facility for the biggest firms and the Coronavirus Business Interruption Loan Scheme for smaller players.Small companies and the self-employed | Numbers to call

The Government has so far been reluctant to offer special assistance to individual industries, instead pointing to these £330bn lifelines.

But there is some concern among energy suppliers that vulnerable customers will not be able to pay for their gas and electricity in coming months if they are unable to return to work. The small business loan scheme has also faced criticism for being slow to deliver cash.

A number of suppliers have already seen some customers cancel direct debits, an early indication they are struggling to make payments.

A string of energy companies have large debts and virtually no safety net after several years of aggressively chasing new customers and charging ultra-low prices. 

Industry sources have said that some smaller, profitable energy suppliers are frustrated that large loss-making firms appear to be seeking ways to get a bailout without having to get their bank to approve a business plan. 

Doug Stewart, chief executive of provider Green Energy, said: “There should be no need for further intervention at present.

“The Covid-19 measures are not about supporting companies with poor business models.”Business Briefing Newsletter REFERRAL (Article)

Last week Energy UK requested that firms provide detailed information to support their claims that customers are falling behind. 

In a letter to the firms, BEIS thanked suppliers for providing evidence on potential risks. It appeared to leave open the possibility of further support by saying that the Government is still considering these cases.

One of the companies that originally approached Energy UK to discuss the bailout was Centrica, the owner of British Gas.

In a statement, the company said: “This is about supporting customers and our immediate focus is on supplying the country with the energy that will help it get through the coming months.

“This is not about propping up financially weak and unsustainable energy supply companies.”

A spokesperson for BEIS said that Government had put in place an “exceptional package of economic support for businesses, including extending the eligibility criteria for the Covid Business Interruption Loan Scheme which will allow more smaller energy businesses to qualify.”

“We continue to engage with the energy sector to understand how suppliers and their customers could be further supported,” they added.