Five things we learnt from Energy Spectrum | Issue 653

We present five key themes and findings from this week’s edition of Energy Spectrum issue 653

The commissioning of the 1GW NEMO link interconnector, linking the GB power market to Belgium, on 31 January marks the start of a potential wave of new development that could see total cross-border capacity rise to 20GW by 2030. Despite uncertainty surrounding Brexit, the strong business case for interconnectors, backed by policy support in the shape of cap and floor, means that deployment of the pipeline of new capacity is likely to continue. In this week’s Energy Perspective, we suggest that new links have even greater strategic importance in government thinking following the recent abandonment and suspension of several nuclear projects. We also use our own analysis to demonstrate that any policy decision based on import volumes alone is likely to create risk and that interconnectors should form the basis for bi-directional management of continental intermittency as renewables continue to grow.

A recent report published by the Parliamentary Scottish Affairs Committee calling for an ambitious sector deal to support the nation’s oil and gas industry well demonstrates the tensions that typify the decarbonisation debate. In this week’s Policy section, we consider the detail of the report, which illustrates the opposing views around choices for delivering the Clean Growth Strategy and the Industrial Strategy.

Approved changes by Ofgem to two parameters used to remove balancing actions from the electricity balance price calculation will better reflect National Grid’s costs in balancing the system. However, we find in our Regulation section that they are also set to make imbalance prices on average higher and more volatile, which will send a sharper signal for trading parties to achieve contractual balance.

A report commissioned by the Offshore Wind Industry Council outlining recommendations for the UK to capitalise on opportunities in the offshore wind supply chain is both well-timed and makes a strong argument as to why the current policy commitment to support offshore wind should be the minimum. We analyse the report in more detail in our Industry Structure section.

In Nutwood, Cornwall Insight Modelling Consultant Paul Anderson explains why 2019 – even in its early stages – already appears to be another interesting year for the Triad transmission pricing scheme. Anderson explains that changes to the Triad scheme must be managed carefully in order to not penalise those who have invested in response to the previously Ofgem-endorsed charging methodologies.

What is the Energy Spectrum service?

The Energy Spectrum service consists of two publications designed to keep you informed of key news from the energy market:

Daily Bulletin –  a concise daily summary of the key news from the last 24 hours in policy, industry and markets, and regulation
Energy Spectrum – our longer weekly publication provides a more detailed look at the events of the previous seven days. Energy Spectrum discusses the headline news and highlights key information within each brief. It also includes a markets page outlining headline trends in gas, electricity, and commodities

Sign up to a free trial

To subscribe or to request a free one-month trial of the service, email enquiries@cornwall-insight.com or call 01603 604 400.
Request a free trial of the Energy Spectrum service

Related thinking

Announcement

Energy market and net zero transition learning and development: Role-relevant career development training

We’re well over halfway through the calendar year and are now beginning to see more of the government’s thinking and policy-shaping around what needs to change to meet the 2050 net zero target. For example, the flurry of documents issued towards the end of 2020, including the Energy White Paper...

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...

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...

Regulation and policy

Calm before the storm? 2021 energy supplier compliance developments

The latest update to our Energy Supplier Compliance Portal went live on 4 May and includes changes to the compliance landscape during February to April 2021. While the previous quarter’s update reflected new principles resulting from Ofgem’s Supplier Licensing Review (SLR) and protections for prepayment meter customers facing self-disconnection, Q121...

Regulation and policy

Electricity transmission charging reform – overtaken by changing priorities?

Charging for the transmission network is never out of the development process for long. From major reviews, such as that initiated under Project Transmit in 2010, to significant reforms such as removing the triad benefit from distributed generation in 2018, and a host of smaller developments, change seems the only...

Energy storage and flexibility

How nuclear energy can help the UK reach its net zero goals

This article was originally written in Energy Spectrum on 21 March 2021. To find out more about a subscription to Energy Spectrum, please contact Nick on n.palmer@cornwall-insight.com. There are several challenges to reaching net zero, where its proponents believe nuclear could add value. Some of tomorrow’s main issues concern: How to provide low...

Commercial and market outlook

In the midst of the Australian Energy Transformation Process

Australia is in the midst of an energy supply and distribution transformation. This transition is twofold and includes not just bridging the gap from conventional fossil fuels to renewable technologies (due to their reduced carbon footprint, lower levelized cost of energy and improved reliability levels by comparation), but also requires...

Commercial and market outlook

April showers bring DUoS for every half hour

Almost two years ago, Ofgem approved DCP268 DUoS Charging Using HH Settlement Data, which will move existing non-Half Hourly (NHH) settled demand customers onto time-based Half Hourly (HH) Distribution Use of System (DUoS) unit rate charges. With the modification to be implemented in the DCUSA on 1 April, we revisit...

This site is registered on wpml.org as a development site.