Five things we learnt from Energy Spectrum | 672

Our Energy Perspective this week considers how an increasingly competitive market is bringing forward new opportunities and new risks for generators, suppliers and consumers alike, as each tries to secure the best value.

This was a landmark week for UK climate policy, with Parliament passing the government’s 2050 net zero legislation, Climate Change Act 2008 (2050 Target Amendment) Order 2019. In our Policy section, we consider how each House debated it and what issues were raised, concluding that this government and future governments will need to set out how this momentous target will be achieved.

BEIS statistics reveal that, in 2017, the number of English households in fuel poverty totalled 2.53mn, representing approximately 10.9% of all English households, a decline from 2.55mn the year previously. Alongside this, we consider National Energy Action’s reaction to the figures and conclude that wider economic factors – lower than average bill increases and greater than average income increases – rather than sector specific activity were the main drivers for this slight fall.

In our Regulation section, we look at Ofgem’s consultation on proposed changes to the generation licence to make it fit for storage facilities. We find that, although this clarification is welcome, the market is already moving on and a generation licence has become the accepted way for storage developers to avoid final consumption levies. However, we welcome the regulator seeking to provide flexibility as well as promoting information sharing.

Ofgem’s Consumer Perceptions of the Energy Market Report for Q1 2019 shows that cost factors remain the main drivers of consumer switching. In our Industry Structures section, we look at the results and conclude that market events can continue to influence consumer perceptions for some months after taking place, including supplier failure, price rises and comparisons of tariffs.

Related thinking

Net zero corporates and ESG

Data critical for sustainable investments

On 24 June, attendees to our 'Financing net zero forum' tuned in to hear the expert panel discussions on the role of data in sustainable investment. Joining the meeting chairs, Cornwall Insight's Daniel Atzori and Emma Bill were our guest panellists from Mercatus and Victory Hill Capital Group LLP. For investors to make...

Low carbon generation

Our Renewables Pipeline Tracker: In with the new – scoping projects and progression through planning stages

Our latest Renewables Pipeline Tracker was published on 11 June, and this blog provides a summary of some of the recent developments in our coverage of the pipeline for new build and repowering renewables assets in GB. What’s new? Seabed leasing rounds, scoping projects and CfD announcements Since our previous...

Heat networks

Reallocating electricity policy costs to incentivise low carbon heating technologies

Funding the cost of decarbonising the power system has mainly been through the consumers' electricity bills. In fact, in 2020-21 these costs amounted to a whopping £10bn. But is this method of raising revenue for decarbonisation still fit for purpose when faced with the need to decarbonise the nation's heat?...

Regulation and policy

How will consumers take to Market-wide Half Hourly Settlement?

Ofgem published its decision to implement the move to Market-wide Half Hourly Settlement (MHHS) on 20 April. This confirms plans to move to new settlement arrangements over a four and a half year time period, with the Elexon-led Design Working Group’s Target Operating Model to be used as the blueprint. Meters...

Net zero corporates and ESG

Financing net zero panel advises policymakers for a long-term view of net zero to boost merchant renewable confidence

Last Thursday's 'Financing net zero forum' brought together 580 registered attendees across the renewables sector to listen to the expert panel discuss managing renewable merchant risk. Joining the chair of the meeting were experts from across the industry, with Shoosmiths sponsoring the afternoon discussions. Merchant renewables – the development of...

Regulation and policy

Ofgem raises modifications ahead of RCC and new switching arrangements

The latest edition of our Faster Switching Service Report due to be issued this week includes the latest developments in Ofgem’s Switching Programme and the associated Retail Energy Code (REC). Launched in November 2019, the Retail Code Consolidation (RCC) Significant Code Review (SCR) set out Ofgem’s intention to amalgamate the...

Net zero corporates and ESG

Get ready for climate risk reporting?

On 30 April we released the latest copy of our Energy net zero. The publication takes an in-depth look at the UK's transition to a low carbon economy. The below is an extract from our Energy Perspective on Task Force on Climate-related Financial Disclosure (TCFD). The article was originally published in the...

Commercial and market outlook

Data centres predicted to become prosumers of electricity

In combination with Cornwall Insight and Bit Power, Host in Ireland published its Biannual report of Ireland’s Data Hosting Industry. The report highlights the importance of sustainability in Ireland’s digital transformation. The report confirmed the number of operational data centres in Ireland increased by 25 per cent over the past...

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