This week’s Energy Spectrum overview | 23 April 2018

In this week’s Energy Perspective, we examine the case put forward by the Energy and Climate Intelligence Unit for repowered onshore wind projects to be allowed into the Contract for Difference (CfD) scheme, as the UK’s first windfarms near the end of their expected lifespans. We explore the generation, volume and cost advantages of the proposal and consider the pathways available for it to become a reality.

As a policy option, we argue that an auctioned repowering CfD instrument would be unique in satisfying both the UK’s carbon reduction commitments and the government’s previous manifesto commitments regarding onshore wind, whilst minimising additions to the low-carbon levy bill. We, therefore, believe that it presents an obvious option for the government if it is to stay true to its policy objectives of delivering the low-carbon transition at the lowest cost.

In this week’s Policy section, we examine a BEIS Green Paper that includes proposals to strengthen consumer protections in an effort to address the opportunities and challenges presented by rapidly changing modern consumer markets.

The department puts forward a wide range of new protections including a score-card system to “name and shame” poor performing suppliers and measures to ensure vulnerable consumers aren’t exploited. We argue that the desire for these changes reflects the ongoing internal tension for policymakers between trusting competition and using regulation to deliver the best outcomes for consumers.

The section also reviews two government consultations aimed at ensuring the future interoperability of SMETS1 meters and a Frontier Economics paper assessing potential market and regulatory models and scenarios that could support a low-carbon gas network to 2050.

In this week’s Regulation section, we discuss the news that Elexon’s initial options for the market-wide half-hourly settlement Target Operating Model (TOM) have been approved by Ofgem. We argue that the Elexon-led Design Working Group has provided a good starting point for the development of the TOM and that it is encouraging to see that the timetable set out in Ofgem’s SCR launch statement is being more or less stuck to.

The section also looks into Elexon’s White Paper that considers how the BSC central services could be adapted to support individual customers buying electricity from more than one supplier.

In our Industry Structure section this week, we present an overview of our Q118 Green Power Forecast report, which provides a forecast of values by technology for renewable projects under different routes to market. We find that renewable project values have risen over the quarter, but that the subsidy-free market is yet to gain traction as these projects struggle to find a viable route to market.

We also review the Crown Estate’s sixth Offshore Wind Operational Report, which gives an overview of the UK sector for 2017. The report finds it to be a record-breaking year that included the world’s first floating offshore windfarm, bigger individual turbine capacities that ever and the fact that the UK retains the largest operational capacity of offshore wind installed in Europe.

In this week’s Nutwood section Catherine Jones, a Senior Policy Adviser at the National Infrastructure Commission, asks how long it will be before electric vehicles become the norm. She discusses estimates from businesses and government and examines factors including delivery of a national network of charging points, pricing issues and historic public take-up of vehicles and new technologies more generally which could lead to a faster that expected uptake.

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