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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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Ofgem announces strategic review of microbusiness energy market

3rd May 2019
Information types

Policy areas

  • Ofgem is concerned some microbusinesses are struggling to engage with the market and paying more for their energy than they should.
  • Our evaluation of the impact of the CMA’s price transparency remedy suggests that wider issues remain in the £3.5 billion microbusiness energy market.
  • Ofgem presents its initial analysis on consumer harm and seeks further views and evidence on the challenges microbusinesses face.

Ofgem has announced its strategic review of the microbusiness energy market to better understand and address the issues faced by microbusinesses.

Our initial analysis shows that market information is often inaccessible, resulting in customers paying high prices and struggling to make informed decisions.

Microbusinesses play a central role in the UK economy. According to government data, there were over five million microbusinesses in the UK in 2018, accounting for a third of employment and 21% of turnover. Last year microbusinesses paid £3.5 billion in total in electricity and gas bills.

Ofgem has concerns that the energy market isn’t working as well as it should for these customers.

The complexity of the market with the wide variety of contracts and lack of accessible helpful information about prices means many microbusinesses find it hard and costly to engage in the market to find a better deal.

Ofgem has found that microbusinesses who do not engage in the market still pay a higher “loyalty penalty” than disengaged domestic consumers.

Following its investigation into the energy market, the Competition and Markets Authority ordered suppliers in 2016 to provide clear prices to microbusiness customers through a quotation tool on their websites or through price comparison websites to help them engage in the market.

Ofgem implemented the remedy in 2017 and today has published an evaluation of its effectiveness. The regulator has found while the remedy has improved the level of price information that is available to microbusinesses, it has had a limited impact on microbusiness engagement levels and has failed to address some of the fundamental problems in the market.

We will gather further evidence through the call for inputs and other evidence gathering activities before publishing our action plan in winter 2019.

Ofgem has already introduced a number of reforms to help microbusinesses get a better deal. This includes stopping suppliers from automatically rolling over microbusiness customers onto expensive deals, banning suppliers from backbilling microbusiness customers for energy used more than 12 months previously and introducing an overarching principle to treat microbusiness consumers fairly.

The review and any subsequent actions will complement other reforms being taken forward by Ofgem and government focused on micro and small businesses including smart meters, and the half hourly settlement and switching programmes.

Anthony Pygram, director of conduct and enforcement at Ofgem, said: “Microbusinesses are the backbone of the country’s economy. Yet too many are still finding it hard to navigate what is a complex and at times opaque market to get a better energy deal and are suffering significant consumer detriment as a result.

“Our review announced today, combined with our continued work with the government and industry, aims to deliver a properly functioning competitive retail energy market which works for all microbusinesses.”

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Customers entitled to automatic compensation for switching problems from 1 May

30th April 2019

Information types

Policy areas

  • From 1 May consumers will receive at least £30 compensation for “erroneous switches” and delayed refund of credit balances.
  • New requirements from Ofgem will boost consumer protection and confidence in the switching process.
  • Compensation for delayed switches and late final bills will be introduced later this year.

Customers will automatically receive compensation from 1 May if they are not returned to the correct supplier when they are mistakenly switched or if suppliers are late in refunding the credit balances of customers who have switched away.

The new requirements will give customers peace of mind that they will be compensated if something goes wrong.

They should also serve as a wakeup call for suppliers to reduce the number of problems and boost confidence in switching.

Ofgem will separately introduce new requirements for suppliers to pay automatic compensation for delayed switches and providing late final bills later this year.

For switches initiated from 1 May, customers will automatically receive compensation for so-called “erroneous switches”, where they are mistakenly switched to another supplier.

Under the new rules, customers will be entitled to compensation up to a maximum of £120 if their supply is not restored to the correct supplier in a timely fashion. Both the gaining and losing and suppliers are subject to these new guaranteed standards.

Customers will also be entitled to a £30 payment if their previous supplier is late in refunding them their credit balance after they have switched.

Under Ofgem’s rules, suppliers must refund these credit balances within 10 working days of a final bill being issued.

Suppliers are required to pay compensation automatically to the affected customer within 10 days of the breach occurring. If they fail to make the initial payment, they will be required to make a further payment of £30.

Suppliers will have to report data on payments to Ofgem which will monitor their compliance to ensure that suppliers are implementing new regulations correctly.

While the vast majority of switches go smoothly, more problems are occurring as more people switch to get a better deal.

Rob Salter-Church, director, retail systems transformation at Ofgem, said: “When a switch goes wrong, it can cause inconvenience, and in some cases, real worry and stress for those affected.

Automatic compensation payments from 1 May, and additional payments this year, should serve as an incentive for suppliers to raise their game and get switches right first time.

These new requirements, together with the introduction of the price cap, and tightening the rules on new suppliers entering the market, demonstrate our commitment to protecting consumers and ensuring they get a better deal.”

Further information

For media, contact:

Claire Duffy: 0141 331 6390

Media out of hours mobile: 07766 511470 (media calls only).

Notes

1. Ofgem had proposed introducing automatic compensation for relevant switching problems at the same time. However, following a consultation, Ofgem decided to introduce payments in stages and is reviewing the best way of structuring compensation payments for delayed switches and late final bills. This follows feedback that the original proposals did not set appropriate incentives because suppliers not at fault for these problems could still be liable for compensation.

2. The new Guaranteed Standards introduced from 1 May will apply in the following situations:

  • When a customer reports a potential erroneous switch, the customer will receive a standard payment of £30 from each supplier if they are unable to agree within 20 working days whether an erroneous switch has occurred;
  • The customer will receive £30 from the contacted supplier if they fail to return the 20 Working Day Letter as required by the Erroneous Transfer Customer Charter within 20 working days;
  • An erroneously switched customer will receive £30 from their old supplier if they fail to re-register the customer within 21 working days; and
  • Where a switch has been completed, customers will receive a payment of £30 if suppliers fail to return a credit balance within 10 working days of issue of a final bill.
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‘Zombie firms’ a major drag on UK economy, analysis shows

A rising number of underperforming “zombie firms” are creating a major drag on the UK economy and threaten to exacerbate a future downturn, says a new analysis by KPMG.

As many as one in seven UK firms are potentially “under sustained financial strain” and had been able to “stagger on” partly thanks to low interest rates, the accountancy firm warned. These struggling firms are crowding out healthy rivals, when under more normal economic circumstances they would probably have ceased trading.

In a report issued on Monday, KPMG warned that “the rise of zombie firms in the UK could spell trouble ahead”.

The authors said there were differing views as to what constituted such a firm, but that in their view it was a company where turnover was static or falling, profitability was persistently low, margins were being squeezed, cash and working capital reserves were limited, leverage levels were high, and there was a limited ability to invest for the future.

The authors looked at 21,000 UK companies, using information from their last three sets of annual accounts, and found that 8% of UK firms were displaying “zombie-like symptoms”. However, they added that based on the latest figures and other economic data, the proportion of such companies across the UK could be as high as 14%.

The highest concentrations of zombie firms were in the energy, automotive and utilities sectors.

In the energy sector, many firms will have been hit by the 2018 oil price slump, while carmakers and utility firms were facing fierce competition from start-ups and technological developments.

KPMG argued that in previous recessions, businesses that were not productive enough would have ceased trading, thereby eventually making way for “new dynamic companies” and ensuring capital was invested in high-growth businesses.

Construction group Carillion is a high-profile example of a UK firm that is said to have been in financial difficulty for several years prior to its collapse in January 2018, but which had managed to limp on, taking on contracts that could have gone to its financially healthier competitors during those years.

On 2 May, Bank of England governor Mark Carney warned that a modest recovery over the next three years would warrant higher interest rates than financial markets were currently anticipating.

KPMG said if interest rates were to rise further, some of these businesses might soon find their loans more difficult to repay, and if the economy continued to stutter, they would be left especially vulnerable to adverse market forces or a tightening of liquidity.

Yael Selfin, KPMG’s chief economist, said: “The threat that zombie companies pose to the wider economy is very real, regardless of what the post-Brexit environment looks like. Many unproductive businesses have been able to stumble on in recent times, generating just enough profits to continue trading but without the innovation, dynamism or investment necessary to sustain bottom-line growth. This has [created], and will continue to create, a drag on UK productivity.”

Britain’s productivity has been persistently poor since the financial crisis, and is about 16% below the average for advanced G7 economies. Business investment has been falling for the past year, according to the Bank of England, which predicts muted productivity growth in the near term.

 

Of the 21,000 private companies analysed by KPMG, 60% were said to display one or more of the symptoms associated with such underperforming firms, while 8% displayed three or more.

Blair Nimmo, head of restructuring at the firm, said that in the event of a liquidity squeeze, many of these businesses would fail. If that happened, “the potential for contagion is very real, creating broader challenges for an economy already struggling to deal with a plethora of issues”.

Others define a zombie firm as one that has been around for several years but is unable to cover its debt-servicing costs with its profits – a definition that, looking at well-known companies, could arguably be applied to firms such as Tesla, which recently announced it had lost $702m (£534m) in the first three months of the year and ended the quarter with about $10bn in debts.

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‘Zombie firms’ a major drag on UK economy, analysis shows

A rising number of underperforming “zombie firms” are creating a major drag on the UK economy and threaten to exacerbate a future downturn, says a new analysis by KPMG.

As many as one in seven UK firms are potentially “under sustained financial strain” and had been able to “stagger on” partly thanks to low interest rates, the accountancy firm warned. These struggling firms are crowding out healthy rivals, when under more normal economic circumstances they would probably have ceased trading.

In a report issued on Monday, KPMG warned that “the rise of zombie firms in the UK could spell trouble ahead”.

The authors said there were differing views as to what constituted such a firm, but that in their view it was a company where turnover was static or falling, profitability was persistently low, margins were being squeezed, cash and working capital reserves were limited, leverage levels were high, and there was a limited ability to invest for the future.

The authors looked at 21,000 UK companies, using information from their last three sets of annual accounts, and found that 8% of UK firms were displaying “zombie-like symptoms”. However, they added that based on the latest figures and other economic data, the proportion of such companies across the UK could be as high as 14%.

The highest concentrations of zombie firms were in the energy, automotive and utilities sectors.

In the energy sector, many firms will have been hit by the 2018 oil price slump, while carmakers and utility firms were facing fierce competition from start-ups and technological developments.

KPMG argued that in previous recessions, businesses that were not productive enough would have ceased trading, thereby eventually making way for “new dynamic companies” and ensuring capital was invested in high-growth businesses.

Construction group Carillion is a high-profile example of a UK firm that is said to have been in financial difficulty for several years prior to its collapse in January 2018, but which had managed to limp on, taking on contracts that could have gone to its financially healthier competitors during those years.

On 2 May, Bank of England governor Mark Carney warned that a modest recovery over the next three years would warrant higher interest rates than financial markets were currently anticipating.

KPMG said if interest rates were to rise further, some of these businesses might soon find their loans more difficult to repay, and if the economy continued to stutter, they would be left especially vulnerable to adverse market forces or a tightening of liquidity.

Yael Selfin, KPMG’s chief economist, said: “The threat that zombie companies pose to the wider economy is very real, regardless of what the post-Brexit environment looks like. Many unproductive businesses have been able to stumble on in recent times, generating just enough profits to continue trading but without the innovation, dynamism or investment necessary to sustain bottom-line growth. This has [created], and will continue to create, a drag on UK productivity.”

Britain’s productivity has been persistently poor since the financial crisis, and is about 16% below the average for advanced G7 economies. Business investment has been falling for the past year, according to the Bank of England, which predicts muted productivity growth in the near term.

 

Of the 21,000 private companies analysed by KPMG, 60% were said to display one or more of the symptoms associated with such underperforming firms, while 8% displayed three or more.

Blair Nimmo, head of restructuring at the firm, said that in the event of a liquidity squeeze, many of these businesses would fail. If that happened, “the potential for contagion is very real, creating broader challenges for an economy already struggling to deal with a plethora of issues”.

Others define a zombie firm as one that has been around for several years but is unable to cover its debt-servicing costs with its profits – a definition that, looking at well-known companies, could arguably be applied to firms such as Tesla, which recently announced it had lost $702m (£534m) in the first three months of the year and ended the quarter with about $10bn in debts.

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Invest directly in new wind farms while saving on energy bills with new UK startup

Ripple Energy aims to put wind power in the hands of the people while giving them cheap, reliable energy at a stable price

Britain is home to a resource that’s enormously abundant, produces electricity much more cheaply than oil or gas, emits no carbon dioxide and – unlike fossil fuels – involves no devil’s bargain with regimes like Putin’s Russia or the kingdom of Saudi Arabia.

Wind energy produced locally could supply the majority of the UK’s electricity needs, yet there is no gold rush around this valuable energy source. Yes, wind is growing in importance as a way of powering our homes and businesses, but, worryingly, last year investment in renewable energy dropped to its lowest in a decade.

Recent headlines have pointed to Britain going “coal-free” for almost four days – the longest period since the Industrial Revolution – but much of the energy we consumed instead of coal came from gas or was imported from overseas.

These stories hide the fact that green energy subsidies have been ditched and the government has been accused of creating a “hostile environment” for new renewable generation.

Even if the future of the planet wasn’t at stake, this would be a criminal underinvestment in an area where Britain has a clear inbuilt natural advantage.

Ripple Energy gives UK consumers the chance to bypass big suppliers with their rip-off tariffs and overpaid execs. Instead of waiting for stuck-in-the-mud ministers to take the action to support the transition away from fossil fuels Ripple allows consumers to directly fund cheap, clean, renewable energy, in a simple way.

As consumers, we stand to save £85 to £175 a year on our energy bills while funding the expansion of the cleanest, cheapest, safest energy currently available produced right here on our shores.

Here’s the offer: You put in around £1,300 for a stake in a new onshore wind farm. You can invest more if you want but this is the amount Ripple reckons will give you the amount of energy needed for an average home.

For that you get electricity at a low price which will remain stable for the entire 25-year lifespan of a wind farm rather than seeing bills shoot up based on the whims of global energy markets.

It’s simple to sign up online. Enter a few details such as where you live and how big your house is. After that you agree to become a member of what’s known as a Community Benefit Society. It’s like a company but, in keeping with its name, it benefits the wider world rather than just its shareholders.

You can get involved in the society if you want but this is by no means an obligation. Ripple will run things and you’ll get a bill from one of the two suppliers the company is currently working with.

The whole idea came about because, after 18 years working in renewable energy, Ripple founder Sarah Merrick, saw a huge and unnecessary gap in the market.

“People love wind power”, says Merrick. “But it’s not that easy for them to get it.” There are green energy tariffs but these mostly serve to reallocate existing renewable supply amongst different customers. By contrast, Ripple sources new money to promote the construction of extra wind capacity.

Big firms have been pumping money into their own renewable energy projects for several years, but it’s so far been pretty much off-limits to the consumers.

“It’s great that companies like Google and Ikea can access cheap renewable energy,” says Merrick. “But we think everyone should be able to do that.”

“When you work out the numbers it’s pretty simple and even people who have worked in renewable energy for a long time are surprised.”

Ripple is currently crowdfunding to support its growth as it works towards its first project – a single wind turbine that will supply around 800 homes.

It’s been so popular that after a week Ripple is already at close to two thirds of its £750,000 target.

The crowdfunder will enable Ripple to complete the development of its clean energy ownership platform and market its first pilot project later this year. Merrick is now eyeing up a 20-megawatt farm that will provide power to around 18,000 households.

As well as cheaper bills Ripple offers something else that is extremely valuable in the face of political inaction. As thousands of protestors take to Britain’s streets to protest and demand a ‘Citizens Assembly’ on climate change, Ripple presents a way of democratising the ownership of energy, our most crucial resource.

“We don’t think that in the future people will need big utilities, or pensions funds for that matter, to own renewable energy supply,” says Merrick.

“They can do it themselves.”

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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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MPs launch inquiry into future of UK energy investment

LONDON (Reuters) – A committee of British MPs has launched an inquiry into the outlook for future investment in energy infrastructure in Britain after two nuclear projects were halted, it said on Thursday.

Last month, Japan’s Hitachi put a $28 billion (£21 billion) nuclear power project in Britain on hold, dealing a blow to the country’s plans for the replacement of ageing plants and coalplant closures.

Another Japanese firm, Toshiba Corp., scrapped its British NuGen project last year after its U.S. reactor unit Westinghouse went bankrupt and it failed to find a buyer.

The Business, Energy and Industrial Strategy Committee said it will look at whether the government needs a new approach to accelerate investment in a future low-carbon energy system.

The inquiry will also likely examine ways of financing future nuclear plant new-builds and concerns over foreign investors in the sector.

“In the wake of investment decisions over nuclear plants at sites such as Moorside and Wylfa, a giant hole has developed in UK energy policy,” said Rachel Reeves, chair of the committee.

“A bigger shift in our energy infrastructure to a low-cost, low-carbon energy system is necessary,” she added.

The committee has invited interested parties to make submissions on its website until April 3.

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