No-deal Brexit wouldn’t disrupt gas, power flows from Europe: UK National Grid

LONDON (Reuters) – National Grid, which runs Britain’s energy systems, said on Tuesday that electricity and gas flows from continental Europe would continue as normal even under a no-deal Brexit as it has made preparations for all scenarios.

“We anticipate no additional operability challenges for this summer as a result of the UK’s planned exit from the EU,” National Grid said in its Summer Outlook, covering the period from April to October.

Britain imports around 5-6 percent of its electricity via interconnectors with continental Europe.

“Should the UK leave the EU with no deal, cross-border trading of energy would take place outside of the (EU) single market framework, i.e. under World Trade Organisation rules for the majority of countries,” National Grid said.

There are no tariffs on electricity or gas shipments between the EU and other WTO members.

Nearly three years after Britain voted to leave the EU, and three days before it was supposed to leave the bloc, it remains unclear how, when or even if Brexit will take place.

Britain also imports more than half of its gas via pipelines from continental Europe and Norway and through shipments of liquefied natural gas (LNG) from countries such as Russia, the United States and Qatar.

LNG is more widely available on the world market as Russia and the United States have been ramping up deliveries. National Grid said it expects higher deliveries of LNG than last summer and that it expects there will be sufficient gas supply to meet demand. It also said it would be able to meet electricity demand.

It forecast gas demand during the summer period will total 36.1 billion cubic meters, almost 6 percent higher than summer gas demand in 2018, once weather related adjustments were made.

Electricity demand in Britain is expected to peak at 33.7 gigawatts (GW) this summer while the minimum summer electricity demand is forecast at 17.9 GW.


Brexit Delays Leave U.K. Facing Risk of Higher Power Prices

Some projects to develop new power cables between the U.K. and France are on hold because of uncertainties related to Brexit, throwing into question the delivery of infrastructure intended to reduce electricity costs in the U.K.

Work continues on two new interconnectors that were already under construction between the countries. However, talks on three other subsea power lines have been suspended due to the prolonged wrangling between the U.K. and the European Union over their divorce.

The pause, caused by the French energy regulator’s decision not to rule on the benefits of new interconnectors with the U.K. until the final conditions of Brexit have been clarified, could mean higher power prices on the British market for several years.

“As the U.K. often benefits from low power prices from France, less interconnection with that country can inadvertently translate to higher power prices,” said Andreas Gandolfo, a London-based analyst at BloombergNEF.

Increased connectivity with neighboring countries is becoming more important as the European power market undergoes rapid change. Utilities are becoming reluctant to invest billions to replace coal-fired and nuclear plants that are edging closer to retirement age, while wind and solar power can experience significant fluctuations.

On Pause

Ofgem, the U.K. energy regulator, has so far approved nine interconnectors, which would more than triple capacity from the current 5 gigawatts, a spokeswoman said. Developers will need to work with governments and regulators in connecting countries to ensure that final approval is granted in those countries, she said.

French regulator CRE’s concern over Brexit uncertainty is delaying progress of the Fab Link, Aquind and GridLink.

Prime Minister Theresa May is still struggling to gather enough support to get her EU withdrawal agreement through a vote in the House of Commons by Friday. If her deal fails for a third time, the U.K. will be forced to choose between a potentially long delay to its departure and falling out of the EU without a deal on April 12. Either of those outcomes would deepen the uncertainty that’s affecting the development of this vital infrastructure.

“There is a pause on talks for new interconnectors in development to France until Brexit is sorted,” National Grid Plc said in response to questions from Bloomberg. The U.K. power-grid operator said it’s continuing with projects that are already underway, amounting to a 2.1 billion-pound ($2.8 billion) investment in cables to France, Norway and Denmark.

“There are significant benefits for consumers from greater interconnection, no matter what the Brexit outcome,” National Grid said.

Slipping Timetables

The construction of Fab Link, a 1.4-gigawatt subsea link between the South of England and the Normandy region in France, is due to start in 2020 and to be completed in 2023, according to its website. The project is being developed by French power-grid operator Reseau de Transport d’Electricite, Transmission Investment and Alderney Renewable Energy.

Achieving that timetable will ultimately depend on the review by the French energy regulator, an RTE spokeswoman said by email. A spokesman for Transmission Investment declined to comment on any delays to Fab Link.

GridLink, a 1.4-gigawatt power transmission cable between Kent and Dunkirk developed by Icon Infrastructure is due to be built between the end of 2020 and the end of 2023, according to its website. GridLink didn’t respond to a request for comment through its website.

The 2-gigawatt Aquind project is “progressing on all planned activities,” said a spokesman for the company, while declining to comment on the details of talks with the French and U.K. regulators. Based on environmental and permitting time lines, the company aims to make its final investment decision by the end of 2020 and commission the cable at the end of 2023. In a statement last October, Aquind said its target was to complete construction in 2022.

Insufficient Capacity

The only power link between France and the U.K. is the 2-gigawatt IFA 2000 interconnector. That cable has been in service since 1986 and isn’t sufficient to meet the highest demand for power trading between the countries.

In the short term, Franco-British interconnection capacity will double to 4 gigawatts — the equivalent of more than two nuclear reactors — as Channel Tunnel operator Getlink expects to commission its ElecLink project early next year.

National Grid and its French counterpart RTE plan to complete the IFA2 cable between Southampton and Caen in the fourth quarter of 2020. National Grid also expects to complete its North Sea link with Norway at the end of 2021.

RTE and its Irish counterpart are continuing studies for the 700-megawatt Celtic Interconnector, which could bypass the U.K. and link France directly to Ireland from 2026. A final investment decision would happen around 2021, according to Eirgrid’s website.


Smart meter rollout must be extended says Citizens Advice

Citizens Advice, in its role as the official consumer watchdog for energy, has responded to the publication of the latest figures from the Department for Business, Energy and Industrial Strategy (BEIS) for smart meter installations.

Gillian Guy, Chief Executive of Citizens Advice, said:

“It’s worrying that at this key moment, when the switch to second generation smart meters should be accelerating, installation rates overall are actually slowing down.

“This is adding to the confusion for customers. Millions of people who have had a smart meter fitted may find it doesn’t work properly when they switch supplier, while millions more are not able to get a smart meter installed even if they want one.

“Customers on prepayment tariffs, in rural areas, and in large parts of the north of England and in Scotland, are in danger of being left behind.

“Smart meters will provide benefits for customers, but with the rollout beset by technical problems, the current timetable is unrealistic. There’s little chance that the 2020 deadline will be met, it should be extended to 2023.”


The government has set a deadline for smart meters to be installed in all domestic homes and small businesses by the end of 2020.

In 2018, Citizens Advice called on the government to extend the rollout deadline to 2023, citing poor consumer experiences, a lack of transparency over costs and ongoing technical problems that have resulted in far fewer meters being installed than projected.

The government’s deadline for the installation of first generation smart meters (SMETS1) passed on March 15th. This means that from that date only second generation (SMETS2) will count towards suppliers’ roll out targets.



Fracking decision delayed for government consultation

A final decision on a fracking ban in Scotland has been delayed for a further government consultation.

Ministers announced an “effective ban” on the oil and gas extraction technique in 2017.

Following a legal challenge from petrochemical firm Ineos, a Court of Session ruling last June found no prohibition against fracking in Scotland.

The Scottish Government had said it would inform the Scottish Parliament of its finalised policy on the development of unconventional oil and gas in the first three months of 2019.

Now, Energy Minster Paul Wheelhouse has announced that a further eight-week public consultation will be held, expected to start after April 21.

He announced the new consultation in response to a parliamentary question on fracking, adding: “Our final policy on unconventional oil and gas will be confirmed and adopted as soon as possible after this process is complete.”

Scottish Labour’s environment spokeswoman Claudia Beamish said: “The SNP government is kicking this issue into the long grass yet again.

“This would be the third government public consultation on fracking and the fourth overall including the consultation on my member’s bill.

“This looks like a cynical attempt to try and keep a ban on fracking out of the upcoming Climate Change Bill. That would be unacceptable.”

She said Scotland “has the power to ban fracking” and her party is looking at the best way to do so, either through the Climate Change Bill or her member’s bill.

Environmental charity Friends of the Earth Scotland called for a full legal ban.

Head of campaigns Mary Church said: “Communities on the frontline of this dirty industry who have been waiting for over four years for the Scottish Government to bring its long drawn-out process on unconventional oil and gas to an end, now face even further delay.

“Holyrood has the power to ban fracking – it’s time for the Scottish Government to stop dilly-dallying, have the courage of its convictions and legislate to stop the industry for good.”

Last week, a legal opinion by Aidan O’Neill QC, commissioned by Friends of the Earth Scotland, suggested the Scottish Parliament has the legislative competence to pass a fracking ban.

It indicated doing so would be less likely to result in successful legal challenges from companies with an interest in the industry.

UK consumers hit by energy and council tax bill rises

As Ofgem raises its price cap, cost of postage stamps and dental checkups also rises


Energy price cap ‘could see £1.67 billion added to UK bills on the 1st of April’

uSwitch believes this could happen if suppliers increase their rates to match the level of the cap


EDF and Anesco partner for ‘sector first’ storage floor price

Anesco has turned to EDF Energy to optimise its landmark Clayhill solar-plus-storage farm, including the provision of an “industry first” guaranteed floor price for storage.

EDF will work alongside its technology partner Upside Energy to secure contracts with network operators and generate revenue using Clayhill’s generation assets.

And in what’s been described as a significant step forward for the UK renewables scene, EDF has offered a guaranteed floor price for Clayhill’s services.

EDF will operate Clayhill within the firm’s proprietary demand side response platform PowerShift. The utility will make decisions on whether to consume or sell energy based on real-time wholesale market prices and other market signals.

The duo, alongside technology partner Upside Energy, will also test new business models and work to connect additional Anesco assets to PowerShift.

Anesco has more than 100MW of operational battery storage at its disposal with a pipeline of 380MW to connect by 2020.

Vincent de Rul, director of energy solutions at EDF Energy, said the companies had been working closely over the past few months to develop the contract structure, describing it as a “crucial” step towards balancing renewable generation on the grid.

Steve Shine, executive chairman at Anesco, said the addition of a floor price and 24-hour trading capability for Clayhill represented “crucial new developments” for the storage sector.

“This is a partnership between three fantastic organisations, we’re already achieving great results and I am sure we will be working together ever more closely in the future,” Shine added.


SSE launches new corporate strategy aligned to SDGs

SSE has listed four key targets under the new 2030 strategy that directly align to the SDGs. A goal to cut the carbon intensity of the electricity it generates by 50% is linked to Goal 13: Climate action, while Goal 7: Affordable and clean energy, will see SSE treble its renewable output to 30TWh annually. SSE first announced the 50% carbon reduction on edie’s Mission Possible Pledge Wall during Green GB Week.

The energy firm will also contribute to SDG 9: Industry, innovation and infrastructure by accommodating the rollout of 10 million EVs in Great Britain by investing in infrastructure and network flexibility. SSE will also champion Fair Tax and a Living Wage in the UK and Ireland, linked to Goal 8: Decent work and economic growth.

SSE’s new and first chief sustainability officer Rachel McEwen will report directly to chief executive  Alistair Phillips-Davies.

“We’ve put the transformation to a low carbon economy at the heart of our strategy and these measures demonstrate how seriously we take that commitment.  Our ambition is to be a leading energy company in a low carbon world,” Phillips-Davies said.

“The four ambitious objectives underpin what our businesses stand for and our investment in long-term, sustainable, low carbon assets and infrastructure will contribute to the UK and Ireland’s climate change targets while building a fairer and more prosperous society.”

As well as appointing a chief sustainability officer, SSE will also require all senior management to be judged against the delivery of the 2030 strategy.

A for SSE

SSE increased its CDP Climate score from a B to an A- last year. It is also the first FTSE100 company to achieve the independent Fair Tax Mark accreditation in 2014 and every year since and was accredited as a Living Wage employer in 2013.

The company is also among the 16 firms which have co-founded a new forum aimed at helping Europe’s business community champion sustainable finance and impact investing.

Last year, SSE issued its second green bond worth €650m, confirming the big six supplier as the largest issuer of green bonds from the UK corporate sector at the time.

Dame Sue Bruce, independent Chair of SSE’s Remuneration Committee, said: “Through this new approach, very clear and ambitious environmental, social and economic sustainable goals have now been cemented into the business strategy. Aligning directly those aims to how executive directors and other senior managers are rewarded, over time, sets a precedent for how we feel sustainability should be regarded by business leadership.

“We have received clear feedback from shareholders and stakeholders stating they would welcome climate change and sustainability incentives for senior leaders and I look forward to discussing this with them in the weeks to come.”

Earlier this week, SSE announced that it would close a 485MW unit at the coal-fired Fiddler’s Ferry power station in Warrington.

Consultation on the methodologies for RIIO-ED1 closeout

The RIIO-ED1 price control runs from 1 April 2015 to 31 March 2023. Within RIIO-ED1 there are a number of cost areas that require specific mechanisms to account for their uncertain nature. As a result of these mechanisms, some areas of the price control need to be settled (“closed out”) once the price control has ended.

We are proposing methodologies to closeout six elements of RIIO-ED1:

  •  Load Related Expenditure;
  •  Net contributions from customers towards gross reinforcement costs, known as Net to Gross;
  •  Network Output Measures/Network Asset Secondary Deliverables;
  •  High Value Projects (HVP);
  •  Expenditure associated with Link Box Replacement Volumes; and
  •  Expenditure associated with Shetland Extension Fixed Energy Costs, Shetland Extension Battery Costs, and Shetland Enduring Solution Process Costs.

We welcome views from stakeholders on our suggested approach outlined in the consultation, by 1 May 2019. The final versions of these methodologies will be included in the RIIO-ED2 Financial Handbook.


Energy efficiency scheme for small and medium sized businesses: call for evidence

Consultation description

This call for evidence seeks views on various proposals for a new Business Energy Efficiency Scheme focused on SMEs.

We are keen to hear from anyone with an interest in how a new scheme for SMEs could be designed, including:

  • energy companies
  • network operators
  • SMEs
  • financial institutions
  • Energy Service Companies (ESCOs)
  • academics

SMEs account for 99% of UK business and have a very low awareness of the benefits of energy efficiency. The additional documents here provide summaries of findings from 2 projects which explored how to engage SMEs in energy efficiency:

  • Digital Discovery: funded by BEIS and delivered through external contractors (completed November 2017) considers the demand for a website targeting SMEs with information about energy efficiency
  • Digital Alpha: a 12-week project (completed July 2018) to build 3 prototypes with the aim of motivating SMEs to make a significant contribution to the 20% ambition

We have issued the government response to our previous call for evidence, Helping businesses to improve the way they use energy, in parallel with this call for evidence.