Business-utilities-UK -with-background

EDF Energy bids to shift gear in EV infrastructure with NEoT Capital deal

EDF Energy has signed a partnership with investment firm NEoT Capital to accelerate its deployment of EV charging infrastructure in the UK.

The deal will see EDF become NEoT’s preferred partner for EV charging infrastructure, providing engineering, procurement, construction and management services, while NEoT will take on the mantle of becoming EDF’s preferred provider of financing for EVs, batteries and related infrastructure.

The duo pointed towards a “limited” investment by businesses into electric fleets, with few businesses able to finance the kind of energy systems necessary to support EVs, including battery storage and vehicle-to-grid systems.

EDF recently launched a nationwide advertising zeroing in on its proposition in electric vehicles, and the two companies said they intend to trigger “more meaningful” investment into EVs by providing their business customers with an end-to-end solution.

Energy suppliers in the UK are racing into the EV space in their droves, with end-to-end packages incorporating financing, vehicle ownership, charging infrastructure and clean power supply proving popular.

The likes of ScottishPowerDrax and Centrica have launched special purpose, end-to-end EV product offerings in recent times, while Volkswagen launched its own clean energy supplier – Elli – in Germany earlier this year to secure its position in the EV power supply market.

Beatrice Bigois, managing director for customers at EDF Energy, said: “To accelerate the adoption of electric vehicles, we need to find innovative ways to finance the required investments. This strategic partnership with NEoT Capital will help us make electric mobility a reality for our customers.”

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UK becomes first major economy to pass net zero emissions law

The UK today became the first major economy in the world to pass laws to end its contribution to global warming by 2050.

The target will require the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least 80% reduction from 1990 levels.

The UK has already reduced emissions by 42% while growing the economy by 72% and has put clean growth at the heart of our modern Industrial Strategy. This could see the number of “green collar jobs” grow to 2 million and the value of exports from the low carbon economy grow to £170 billion a year by 2030.

Energy and Clean Growth Minister Chris Skidmore said:

The UK kick-started the Industrial Revolution, which was responsible for economic growth across the globe but also for increasing emissions.

Today we’re leading the world yet again in becoming the first major economy to pass new laws to reduce emissions to net zero by 2050 while remaining committed to growing the economy – putting clean growth at the heart of our modern Industrial Strategy.

We’re pioneering the way for other countries to follow in our footsteps driving prosperity by seizing the economic opportunities of becoming a greener economy.

The UK’s 2050 net zero target — one of the most ambitious in the world — was recommended by the Committee on Climate Change, the UK’s independent climate advisory body. Net zero means any emissions would be balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage

The government is hosting Green GB Week on 4 November to encourage all corners of the country and sectors of society to play their part in meeting these ambitious targets.

For more information about what the government is doing to tackle climate change, please visit the Green GB Week website.

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Lords debates reduction in UK’s greenhouse gas emissions

Members of the Lords discussed regulations on reducing the UK’s greenhouse gas emissions to net zero by 2050, on Wednesday 26 June.

This Statutory Instrument (SI) is made under the draft affirmative procedure, meaning it needs to be approved by both Houses of Parliament before it can be made (signed into law) and brought into effect as law. Draft affirmative SIs can be stopped if either House votes against the government’s motion calling for the SI to be approved.

Motion to regret

Lord Grantchester (Labour), proposed a regret motion to the regulations on the grounds that:

  • the government have given little detail of how the emissions target will be met
  • they have made a substantial change in policy without the full and proper scrutiny that such a change deserves and;
  • they have not introduced regulations under section 30 of Climate Change Act 2008, to include greenhouse gases from (a) international aviation, or (b) international shipping, as part of the emissions target.

Following the debate on the floor of the House, the regret motion was put to a vote. 155 members were in favour, with 116 against, and so the regret motion was agreed to.

This regret motion cannot stop the regulations, but provides the opportunity for the House to put its concerns on record.

Lords scrutiny

The House of Lords Secondary Legislation Scrutiny Committee(SLSC) examines every SI and publishes reports, drawing members’ attention to any areas of concern.

The SLSC reported on the Climate Change Act 2008 (2050 Target Amendment) Order 2019 in their 53rd Report.

Further information

 

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New York Approves Its Own Green Deal as Trump Turns ‘Blind Eye’

New York State’s version of the Green New Deal is heading to the desk of Gov. Andrew Cuomo, who is expected to sign it into law.

The legislation, approved early Thursday by the state Assembly and Wednesday by the Senate, will set the most aggressive clean-energy targets in the country, calling for huge additions of solar power and massive wind farms off the coast.

“As Washington turns a blind eye and rolls back decades of environmental protections, New York turns to a future of net zero emissions,” Cuomo said in a statement heralding the bill’s passage.

The measure codifies New York’s goal of getting all of its electricity from emission-free sources by 2040, putting the state ahead of all others that have set clean-energy standards — even progressive California, which has targeted 100% clean power by 2045. It also calls for an 85% reduction in economy-wide emissions from 1990 levels by 2050. In promoting the plan during a recent radio program, Cuomo called it “the most aggressive in the country.”

“It’s definitely the most progressive bill that we’ve seen anywhere,’’ Miles Farmer, a senior attorney at the Natural Resources Defense Council, said in an interview.

Exactly how New York will pull off such an ambitious plan remains to be seen. Utility executives across the U.S. have warned that a 100% green grid is impossible using current technologies.

The bill would boost the amount of solar power in New York to 6 gigawatts by 2025 from about 1.7 gigawatts currently. It also calls for 9 gigawatts of offshore wind power by 2035. None of the state’s electricity currently comes from offshore wind.

Comparing New York’s plan to those of other states “is beside the point,” said Ethan Zindler, head of Americas research for BloombergNEF. “The question is can it be done and will there be follow through?”

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Renewables offer UK ‘nuclear gap’ insurance

Increasing renewable energy capacity would provide an insurance policy against a possible ‘nuclear gap’ in the UK’s low-carbon power pipeline caused by early closure of ageing reactors, according to a new report by the Energy and Climate Intelligence Unit.

The report – ‘Cracks in the System’ – examines the effects of the UK’s existing nuclear power stations closing earlier than government expects.

It concluded that expanding renewable energy capacity would fill the gap more cheaply than expanding gas generation.

Expansion could either be through increasing the development of offshore wind or via a combination of on- and offshore wind and solar, the report said.

Accelerating renewables rollout in this way alongside enhanced power system flexibility such as storage would be a ‘no-regrets’ option,” ECIU said.

ECIU head of analysis and the report author Jonathan Marshall said: “Although government has reduced forecasts for the amount of nuclear capacity Britain needs in recent years, no assessment has yet considered the potential impact of the early closure of the country’s ageing fleet of reactors.

“If this happens it is unlikely that the lights will go out, but it could make hitting our carbon targets more challenging.

“Ministers need to decide how to prepare for this potential clean power gap therefore, and soon; accelerating renewables deployment is probably the best no-regrets short-term option, with consideration given to how to support new nuclear projects over the longer term.”

ECIU added that recent decisions by Hitachi and Toshiba to halt new nuclear projects at Wylfa in Wales and Moorside in Cumbria, respectively, have created a shortfall between official projections of nuclear generating capacity and what the market appears set to deliver.

The ECIU analysis considers this alongside the prospect of further shortfalls – prospects raised by the discovery of cracking in the graphite bricks around the core of nuclear reactors such as that which has closed Hunterston B Power Station in Ayrshire.

If cracks affect Britain’s other advanced gas-cooled reactors, these plants may be forced into decommissioning early, the report said.

The impact of such early closures could have important implications for the UK’s carbon targets, said ECIU director Richard Black.

“Britain is already off-track on meeting the Fourth and Fifth Carbon Budgets, covering the periods 2023-27 and 2028-32 respectively, and the loss of another chunk of low-carbon power would make meeting these targets even more difficult,” Black said.

He added: “Cleaning up the power sector has done the bulk of the heavy lifting in Britain’s recent decarbonisation and, if the government does sign a target for net zero emissions by 2050 into law, it will have to do more.

“With that in mind, it would be economically pragmatic to accelerate decarbonisation in the near-term by building up capacity in low-cost renewables and flexibility mechanisms.

“If it turns out they’re not needed, all ministers will have done is to accelerate decarbonisation which they say they need to do anyway; so this really is a no-regrets pathway. But it’s one where decisions are needed soon.”

Business-utilities-UK -with-background

Thames Water chief Steve Robertson steps down after regulator criticises leak record

Thames Water’s chief executive has stepped down amid harsh criticism over its failure to tackle leaks.

The country’s biggest water supplier announced Steve Robertson was being replaced in the top job by chairman Ian Marchant while a permanent successor was found.

Mr Robertson, who had been in the role less than three years, will leave the company at the end of June, Thames Water said.

In the last six months, the firm has been criticised by the industry regulator over leaks, its response to the Beast from the East and its business plans.

Mr Marchant said Thames Water had seen “significant change” and Mr Robertson had put “building blocks” in place for the company’s long-term success.

“We need to continue to ensure that Thames Water is an organisation that both customers and staff feel proud of,” he said.

“We remain fully committed to our proposed business plan focused on providing industry-leading customer service through a substantial investment programme which we are determined to deliver.”

Mr Marchant said Thames Water’s executive team had to meet its “vital” responsibilities to its millions of users “each day”.

Mr Robertson said he was “proud of what we have achieved over the last two and a half years” but admitted “challenges remain”.

Thames Water is the UK’s biggest water and wastewater services provider, with more than 15 million customers across London, the Thames Valley and surrounding areas.

Earlier this year, it was among 14 firms to fail a business review by industry regulator Ofwat, which ordered Thames Water to “substantially rework and resubmit” its five-year plan.

The watchdog placed the firm under “significant scrutiny” and said it had the most to do in order to deliver lower bills and better service for customers.

Thames Water submitted new plans, which included aims to reduce combined bills by 1.3% and set more ambitious targets on reducing pollution, supply interruptions and flooding.

In January, water companies were criticised for their response to winter weather in early 2018 that caused supply interruptions to more than 200,000 customers across England and Wales.

 

Business-utilities-UK -with-background

Biomass can help deliver much-needed UK heat decarbonisation

Biomass could play a pivotal role in heat decarbonisation and help the UK meet its renewable heat targets, AMP Clean Energy said today.

Around 6% of heat in the UK currently comes from renewable sources, but EU targets require it to double to 12% by 2020.

The Renewable Energy Association (REA) report ‘Bioenergy in the UK – vision to 2032 and beyond’ has found that the UK could almost triple the use of bioenergy as a source of heat – from 6% to 16% by 2032 – with biomass a major contributor.

The report found that wood fuels could make a substantially larger contribution to meeting heating needs for buildings and industry, playing a particular role in providing low carbon heating in off gas-grid properties and those where heating via heat pumps is more challenging.

It concluded that bioenergy, which uses sustainable biomass and biofuels produced from wood, crops and food wastes, is the lowest cost route to heat decarbonisation, while also providing a pathway to the development and commercial deployment of future technologies.

Richard Burrell, CEO of AMP Clean Energy, said: “Biomass is a proven, world -renowned technology which can continue to make a significant contribution to the decarbonisation of heat in the UK.

Under the RHI, 87% of renewable heat to date has come from biomass, which has been particularly successful in decarbonising community buildings, schools, hotels and agricultural processes. We now need off-gas grid industrial processes to convert from fossil fuels to biomass and we can help with the financing, fuel and operation and maintenance.

“With the Renewable Heat Incentive (RHI) coming to an end in 2021, there is an opportunity to install new systems before that date as well as to look at new and innovative ways of financing the decarbonisation of heat. We need to find a way to deliver the much-needed transition to renewable heat generation to build on some of the positive steps that have already been taken and to avoid a cliff-edge for new renewable heat installations after 2021. At AMP Clean Energy we are considering what mechanisms could be deployed to achieve this and look forward to discussing our thoughts with Government.”

In January 2019 the REA launched an industry-led review of bioenergy ‘s potential and the policies needed to maximise this to 2032. AMP Clean Energy is one of the industry partners contributing to the review.

You can read the REA report here.

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Britain’s energy bosses back UK bid to host key 2020 climate talks

Bosses at the UK’s leading energy firms are urging the Government to ensure the UK is picked as the venue for key international climate talks in 2020.

Britain is bidding to host the UN climate change conference next year, the biggest since the Paris agreement was signed in 2015

Under UN rules the COP (Conference of the Parties) next year should be hosted by a European nation and take place in the first year the Paris agreement would come into full effect.

The conference will mark a crucial deadline for countries to comply with their commitments in Paris on reducing greenhouse gas emissions and move on to tougher targets for the decade to 2030.

If successful, the move would be a strong signal of the UK government’s determination to retain its role on the world stage after Brexit.

‘Strong record of leadership’

In a letter to ministers and opposition leaders, the bosses of companies including Centrica, ScottishPower, National Grid, Drax, BP and Shell said hosting the UN meeting would give the UK an opportunity to be seen as a green leader.

In addition 162 MPs have signed a letter to Prime Minister Theresa May, saying the country’s “strong record of leadership and ongoing commitment on climate change” makes it the ideal place to hold them.

Energy and Clean Growth Minister Claire Perry revealed last December that she had officially written to express the UK Government’s interest in hosting the talks in 2020.

A decision on where in Europe to hold the “Cop26” talks at the end of next year is expected in June.

‘Maximise the opportunities’

The UN awards the hosting of the COP usually by alternating among developed and developing countries, and different continents, though the rules can be flexible

In the letter from the energy giants – which also include Affinity Water, Anglian Water, Capita, GKN Automotive, Heathrow Airport and Innogy Renewables UK, business bosses back the British bid to host the talks.

“Hosting Cop26 would provide the UK with a platform to further develop and maximise the opportunities of the global shift to clean growth and showcase to the world the best of the UK economy.

“It would be the country’s moment to build further support for an ambitious clean growth trajectory, underscore ambitions for a net-zero economy in line with the Paris Agreement, and set out the opportunity of economic renewal and enhancement through climate action.”

One of the signatories, John Pettigrew, chief executive of National Grid, said hosting the talks would let the UK send a message to the world that “we are proud to take the lead in the fight against climate change”.

“Our progress on clean energy has seen this country make international headlines; for example, when we recently went over a week without any coal generation for the first time since the 19th century. But we all need to do much more.

“This summit represents an opportunity to get the world to unite behind one of the most important challenges we all face and we look forward to working with the Government to bring COP to our shores,” he said.

Lead signatory of the letter from MPs, Labour and Co-operative MP Alex Sobel said: “Having just announced a climate emergency, MPs from across all parties in the UK Parliament are keen to see bold action taken on climate change.

“Cop26 is a key moment when the countries of the world will also be looking to cross divides to come together and build on their climate change pledges.

“With its diplomatic weight and having passed the World’s first Climate Change Act over 10 years ago, the UK is ideally placed to play this role, guiding even those less ambitious countries towards strong commitments.”

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Developing a framework for assessing whether conditions are in place for effective competition in domestic supply contracts

We are seeking views from stakeholders on our proposed framework for assessing whether conditions are in place for effective competition in the domestic energy retail market. This is for the purpose of recommending to the Secretary of State whether or not the cap on default and standard variable tariffs should remain in place, as required under the Domestic Gas and Electricity (Tariff Cap) Act 2018.

The cap was introduced because the retail energy market was not working well for all consumers. Consumers on default and standard variable tariffs were paying substantially more than those who shopped around for fixed tariff deals. To protect these consumers, the government passed legislation in 2018 for a temporary cap on default and standard variable tariffs. This cap was introduced by Ofgem in January 2019. Alongside this, the government and Ofgem are working towards structural reforms to improve the competitive process in the domestic retail market and outcomes for energy consumers.

With the cap on default tariffs now in place, the Domestic Gas and Electricity (Tariff Cap) Act 2018 requires Ofgem to review whether conditions are in place for effective competition for domestic supply contracts. This review must be published by 31 August 2020 and include a recommendation on whether the cap should remain in place for 2021 or be removed. The Secretary of State will consider this review and make a decision by 31 October 2020. If the default tariff cap is extended into 2021, the process will be repeated in 2021; if the cap is extended into 2022 the exercise will be repeated for a final time in 2022 as the cap will cease to have effect at the end of 2023.

This paper proposes a framework for making that assessment. We would welcome your views on it.

We plan to hold a workshop while the consultation is open, and details will be made available here shortly.

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EON confident in assets swap with RWE as Q1 profit drops

German energy giant EON expressed confidence in its planned massive assets swap with RWE’s renewable energy subsidiary, despite weaker first quarter results released Monday.

Essen-based group EON, which suffered terrible losses from 2014 until 2016 due to restructuring and Germany’s abandoning of nuclear power, has since got back in the black, but its figures were down for the first quarter of 2019.

Between January and March, its adjusted net profit — which strips out discontinued operations in the renewables segment, as well as other non-operating effects — declined 11 percent year-on-year to 650 million euros ($730 million).

Its adjusted operating profit also fell eight percent to 1.17 billion euros.

The figures roughly tally with the expectations of analysts from financial services provider Factset, which expected adjusted net income of 626 million euros and adjusted operating income of 1.15 billion euros.

“Aside from the special case of the United Kingdom,” where capped prices and keen competition saw a sharp decline in the group’s profits, “our core businesses delivered a solid performance,” said chief financial officer Marc Spieker.

The German energy giant has confirmed its target for adjusted operating income for 2019 is between 2.9 and 3.1 billion euros.

The adjusted net income is expected to be in the range of 1.4 to 1.6 billion euros.

Last year EON announced plans to take over German rival RWE’s renewables unit Innogy as part of a complex asset swap deal set to shake up the energy sector.

“The planned transaction with RWE is right on schedule,” EON said of the deal that is expected to impact the two energy giants’ financials.

EON added that as expected, the European Commission in March opened an in-depth probe into the deal but that the company was “confident that it will obtain the necessary approvals in the second half of 2019”.

The redistribution of assets allows the two former rivals to specialise in energy distribution and production respectively.