News Archive - Monthly Archives: April 2020

Rays of hope in pursuit of net-zero

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For the third time in just under a year, the UK has broken its record for consecutive days of coal-free power generation.

In May 2019, the UK went a fortnight without coal-fired power for the first time since the pre-industrial period, but the continued drive towards net-zero future and the rise in green energy output meant this barely lasted a month.

That record of 18 consecutive days, six hours and 12 minutes stood for seven months but was beaten today.

Currently, the UK’s energy system has not used coal for power generation for more than 440 hours, accounting for less than 1% of electricity generation in the UK.

Unseasonably warm weather and the coronavirus pandemic have both contributed to the new milestone.

Last Monday (20 April), solar energy accounted for 30% of all electricity generated, while the global lockdown has forced down demand due to a significant slowdown in production.

Sunnier times ahead?

“Solar is playing a critical role in delivering a fossil-free grid and cleaner, cheaper power to Britain. As we look towards a net-zero future, solar will become an increasingly greater part of the energy mix, tackling high power prices, climate change, and biodiversity loss,” said Solar Trade Association 9STA) CEO Chris Hewett.

“With the Government beginning to consider how best to kick-start the economy following the Covid-19 crisis, it has a golden opportunity to place renewables at the heart of its recovery package. Solar, in particular, can provide a glut of quality green jobs and growth at short notice, with your average solar park able to be built in less than six months, and home installation in less than a day. The industry is ready to help drive the revival.”

The public appetite for change

The dramatic slump in oil prices is another factor that could accelerate the U.K’s net-zero push by promoting green energy sources, according to Dr Jonathan Marshall, Head of Analysis at the Energy and Climate Intelligence Unit.

Although previous falls in fossil fuel prices have been seen to have an adverse effect on investment in renewable energy, Marshall argues that the public mood has changed and that the reverse could now be the case.

Marshall believes that an over-dependence on imported fuel, estimated to be heading towards 65% of the market share by 2035, combined with highly volatile energy prices are shaping a new way of thinking amongst an increasingly politicised public.

In so many areas of life what was once seen as normal is now being re-evaluated, and power generation is no different, he says.

“Putting a rocket under the UK’s low carbon transition, as well as pulling the plug on industries that have been on life support for years, could be one of the ways of giving the public what it wants,” claimed Dr Marshall.

Coronavirus and Globalisation: What’s next for supply chain sustainability?

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The coronavirus pandemic has left global economies at a standstill and knocked the confidence in global and connected trade.

The question has been asked: would businesses benefit from pivoting to more localised value chains, as France President Macron advocates, or do global supply chains enable a global shift towards a climate-resilient future?

While that is open to debate, the damage caused by the coronavirus is there for all to see, in hard figures. In what has been described as “an ugly” situation, the World Trade Organisation has forecast a decline in international trade and commerce of between 13% to 32% this year.

The World Trade Organisation has forecast a decline in international trade and commerce of between 13% to 32% this year

The virus is having a huge impact on transport and productivity with many supply chains being affected. Manufacturers are trying to shift the structure of their supply chains to make up for missed deliveries or inputting pivoting systems to make different products entirely.

PPE and hand sanitiser are two obvious examples where this is the case. Turning whiskey into wine was not an unfamiliar process before the outbreak, but how many distilleries would have imagined they’d end up making products that people would raise a glass to because they made them safe not happy?

The world has been turned upside down in so many respects.

Sustainability to suffer in the long run?

With this shift in supply chain structure comes concerns, that the short-term focus placed upon operational capacity and processes could unravel efforts to integrate suppliers into more sustainable practices.

As data from the Financial Times reveals, COVID-19 has unmasked an overt reliance on manufacturing suppliers located in China, with 300 of the world’s top 500 companies owning facilities in Wuhan, the city where the pandemic began.

It has become more and more apparent that, for many organisations, the globalisation of manufacturing has created a scenario where supply chains are unprepared for disruption.

This is due to either being very localised or spanning several different countries, it can even be to the point where end-user businesses won’t be aware of associated links to deforestation, human rights abuse and other environmental and ethical factors.

Coronavirus takes wind out of renewables market

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Forecasted output in the wind power market in 2020 is set to be downgraded due to the coronavirus outbreak.

The amount of energy produced by turbines was on an upward trajectory and forecast to grow by 20 per cent this year, however, the economic slowdown has led to a reduction in the number of turbine installations.

GlobalData noted that total annual installations for wind power reached 2.7GW in 2019 but estimates for 2020 were now around the 980MW mark.

“The average energy demand in the UK declined by 13% after the UK Government announced the lockdown. The output of existing wind farms could significantly decrease due to the supply chain, travel bans and deferred maintenance. In addition, a shortage of engineering staff due to the lockdown could delay critical operational and maintenance (O&M) work at project sites,” GlobalData’s senior power analyst Somik Das said.

“Under normal circumstances, fixing a broken rotor or gearbox typically takes no longer than a month but now it could see up to six months of downtime on a particular turbine, which is quite significant for the wind industry as a whole. Thus, the performance of the wind sector in the second half of the year will be of critical importance for the UK.”

The ramifications of the coronavirus has affected other areas of the green energy sector with solar capacity predicted to fall 16 per cent compared to previous estimates.

Meanwhile, the planned rollout of EV charger installations has been put on hold, contributing to a slowdown in the sales of EVs.

OPEC agreement sees oil prices rally

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energy price

OPEC Plus has finalised a deal with the world’s major oil producers that will see a 10% cut in output – the largest-ever reduction in production.

Prices for global benchmark Brent crude rose by 3.9% to $32.71 a barrel and US grade West Texas Intermediate went up 6.1% to $24.15 a barrel as a result of the end of the damaging price between Saudi Arabia and Russia.

Prior to the agreement, the market was flooded with oil even though demand was down due to the economic downturn caused by the coronavirus. Both factors combined had sent oil prices plummeting to their lowest levels for 18 years, at one stage to just $22.58 a barrel.

US President Donald Trump personally thanked the leaders of both countries, King Salman and Vladimir Putin, saying he believes will save “hundreds of thousands of energy jobs in the United States”.

A word of caution was struck by one analyst, however, who noted that the decline in oil demand is well ahead of the output cuts that have been agreed and that this will frustrate hopes of the price maintaining an upward momentum.

Further cuts may, therefore, be needed to bring supply and demand into equilibrium and make a lasting impression on the price.

OPEC consists of 13 nations, all of which have a significant chunk in the role of oil production in the world and influence on global oil prices.

According to a statement on OPEC’s website, its role is to “coordinate and unify the petroleum policies of its member countries and ensure the stabilisation of oil markets, in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry”.

 

 

EV sales hit the breaks

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We take a look at how the coronavirus is affecting the Electric Vehicle (EV) market

Until the coronavirus took hold, 2020 was shaping up to be a big year for sales of EVs and the development of EV charging infrastructure in the UK. But like a lot of best-laid plans, this is no longer the case and the number of charge points available to drivers of EVs remains at 340. These can be located via the website, Zap-Map.

In the 12 months prior to the pandemic, EV sales had jumped by 144% but they are now set to take a nosedive. Rather than move into the fast lane of the car world, sales of EVs are forecast to plummet by as much as 43% in 2020.

Nissan has taken the decision to halt production of EVs, aware that there won’t be the demand for them given the restrictions on travel and the insecure financial position many people find themselves in.

Tesla, the world’s highest-profile EV manufacturer, had targeted production of half-a-million EVs this year but due to the manufacturing slowdown and economic concerns, that looks highly ambitious.

However, there are still some EV schemes going ahead amidst the crisis, with Siemens announcing at the end of March that they had just completed the UK’s first whole street of lamp post to EV charge point conversions.

The first EV-only motorway service station is also set to be unveiled in Braintree, Essex this summer. When fully operational, the site will have 24 rapid chargers, a supermarket, and an EV education centre.

While the number of car journeys has dramatically reduced since the lockdown period was enforced, key workers still need to get to and from their place of employment and, as a result, Pod Point is reportedly continuing with home charger installations for people operating in the frontline of this crisis who rely on EVs as their mode of transport.

For more information  on how Energy Management can assist with EV infrastructure please contact one of the team on: 01225 867722 / sales@energymanagementltd.com

Brent Oil has dropped to an 18-year low

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Brent Crude Oil dropped to an 18-year low on 30th March, prompting a knock-on effect in the energy price market.

The commodity’s international benchmark fell by as much as 13% to a low of $21.65 a barrel. Meanwhile, the price of US West Texas Intermediate (WTI) fell below $20 a barrel and also closed to an 18-year low.

The global oil industry has faced a sharp drop in demand due to countries across the globe being on lockdown due to the coronavirus with prices falling by more than half in the past month.

Despite this, Saudi Arabia and Russia have agreed to flood the market with oil in April and a rise in the price of energy is expected on the back of this, certainly if you compare electricity prices and gas prices to those in March.

So, if you are looking to get a price for your gas or electricity (or both) while this window of opportunity within the market exists, then please get in touch with one of our sales team on 01225 867722 or email sales@energymanagementltd.com.

Missed the ESOS deadline?

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For qualifying companies, the deadline for phase 2 of ESOS passed on December 5, 2019.

Some companies have missed this cut-off point after finding the complexities of the compliance process more challenging than anticipated.

Faced with being hit with fines potentially running into tens of thousands of pounds, it is important for those companies to act now.

If you don’t have the time, money or dedicated resource to do this, our highly experienced team can take care of the paperwork on your behalf and help you mitigate those costs.

Here’s a reminder of which companies need to comply:

  • Those that employ at least 250 people; OR
  • has an annual turnover in excess of €50 million and a balance sheet in excess of €43 million.

ESOS assessments are carried out every four years and there are five separate UK regulators: Environment Agency, National Resources Wales, Northern Ireland Environment Agency, Scottish Environment Protection Agency and Secretary of State for Business.

For more information please contact us on: 01225 867722 /sales@energymanagement.com

Are you SECR compliant?

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As of today (April 1), the first Streamlined Energy and Carbon Reporting (SECR) reports are due.

SECR was brought in last year to encourage groups of businesses that fulfil the specified criteria to become more energy efficient and reduce their carbon footprint.

It replaced the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) with the aim of widening the net and bringing the benefits of carbon zero to more businesses.

The new regulations will require an estimated 11,900 companies incorporated in the UK to disclose their energy and carbon emissions – a far greater number than were required to act under the CRC.

Qualifying companies will need to include information on their UK energy use in line with the SECR framework in their Directors’ Report, or an equivalent Energy and Carbon Report for LLPs, for financial years beginning on or after 1 April 2019.

Where energy use and carbon emissions are considered to be of strategic importance to the organisation, the disclosure may be made in the Strategic Report instead, with a statement in the director’s report to indicate and explain this decision.

Who needs to comply?

Three groups of businesses are affected by the new regulations. Companies that fall within the following definitions must comply unless they meet certain exemption criteria:

  1. Quoted companies of any size that are already obliged to report under mandatory greenhouse gas reporting regulations.
  2. Unquoted companies incorporated in the UK that meet the definition of ‘large’ under the Companies Act 2006 will have new reporting obligations. This applies to registered and unregistered companies. Note that the criteria for ‘large’ differs from the ESOS Regulations.
  3. ‘Large’ Limited Liability Partnerships (LLPs) will be required to prepare and file a ‘Energy and Carbon Report’.

Unquoted companies or LLPs are defined as ‘large’ if they meet at least two of the following three criteria in a reporting year:

  • a turnover of £36 million or more
  • a balance sheet of £18 million or more or
  • 250 employees or more.

Certain companies that would otherwise be eligible may be exempt if their energy use is low – 40MWh or less over the reporting period.

Whilst not a requirement, external verification or assurance is recommended as best practice to ensure the accuracy, completeness and consistency of data for both internal and external stakeholders.

Energy Management has a proven track record in ensuring companies are compliant with all the latest relevant industry legislation so if you want to find out more about your SECR requirements, you can contact us on 01225-867722 or email sales@energymanagementltd.com.