Demand for renewables growing quicker than supply in Europe

The pricing of green energy may need rebalancing if growth in demand for renewables across the European market continues to outpace the growth in supply.

According to figures published in a report from the Association of Issuing Bodies (AIB), demand for renewable energy in Europe – that is tracked and documented with guarantees of origins (GOs) – grew at a rate of 11.7% in 2019, an increase of 61TWh from 2018 levels.

ECOHZ managing director Tom Linberg said: “The growth in the supply of renewable energy tracked and documented with GOs during the same period is estimated to be only 3.5%, resulting in a significantly smaller surplus in 2019 than previous years.”

Spain has the highest growth in GO demand with 38%, followed by France (26%) and Germany (10%), the latter having been the first country to pass the 100TWh mark in 2019

UK impact  

The UK is not a member of the AIB and uses the Renewable Energy Guarantees Origin (REGOs) scheme, although the report found that the UK is still impacting the supply and demand balance across the European market.

The UK currently allows for the import of GOs to the European Energy Certificate System Standards (EECS GOs). Demand has grown year-on-year with the European markets ramping up – export volume is around 20% of the UK’s total import volume.

Due to different reporting schemes adopted, the statistics could be skewed, however, ECOHZ believes the positive trend could lead to a “healthy” price market in 2020.

There are some uncertainties which could impact pricing and surpluses going forward, such as Brexit uncertainty, clarity on the UK policy for GO imports and REGO exports and the Coronavirus pandemic.

With the UK declaring a carbon net zero target of 2050, there has never been a better time to look at renewable energy sources for your business.

Energy Management have years of industry experience with green energy procurement at the forefront of our service offering.

We can tailor bespoke green solutions for your business, meaning you can mitigate market uncertainty whilst securing the best possible contract for your business.

For more information on how we can help, contact a member of the team on 01225 867722 or email sales@energymanagementltd.com.

How will leaving the EU affect the UK energy market?

Energy Management’s Senior Energy Consultant, Malcolm Barrington, gives his verdict on what the immediate energy landscape may look like following the United Kingdom’s departure from the European Union on 31 January, 2020.

We do not expect Brexit to have a dramatic impact on the energy industry overnight. This is principally driven by the ongoing progress of change following the conclusion of the “Electricity Market Review” and the UK’s drive to renewable energy generation.

The UK has already effectively phased out coal from our generation mix, and offshore wind is currently the flagship of our decarbonisation strategy. This has resulted in the UK Green House Gas Conversion Factors for Company Reporting reducing from 0.41205 CO2e/kWh in 2016 to 0.2556 CO2e/kWh in 2019.

A Brexit deal is likely to ensure that we remain in the European carbon market, (EU Emission Trading Scheme ) until at least the end of 2020. This is a bullish driver for EU ETS allowance prices, and for the market as a whole. All the uncertainty surrounding Brexit last year led to no auctions of UK-issued carbon allowances. The allowances will now need to be traded, along with the 2020 allowances, and the flood of UK-origin ETS allowances may at least temporarily depress carbon prices in the EU.

We are closely watching the future of Hinkley Point’s new nuclear power plant build. The agreed price for electricity generated at Hinkley Point is twice the price of energy generated from offshore wind. We believe that Hinkley Point electricity should be subject to a renegotiation and failure to do this could possibly lead to the project being cancelled.

To talk to any of our team about this issue or any other matter relating to energy procurement and water management, please give us a call on 01225-867722.

Report claims UK has technology to achieve zero carbon

Eliminating greenhouse gas emissions in the UK is said to be achievable with current technology, according to a recent report.

The Centre for Alternative Technology (CAT) stated a net-zero carbon Britain is already possible without any future technology developments.

The report claimed that by making changes to buildings, transport and industry, demand for energy could be reduced by 60%. It also stated making more changes to energy, our diet and the lay of the land use could lead to renewable energy being the only source of energy, as well as cutting emissions from agriculture and industry.

The UK government has, however, described the carbon capture technology as “game-changing” when addressing climate change, with the first project set to be operational next year.

So how can we become carbon zero?

Firstly, CAT said new houses being built need to be to a standard where energy costs can be cut to just £15 a year. This would be achieved by using insulated masonry and concrete, triple-glazing, LED lighting and air-source heat pumps.

It is possible that changes could be made to existing buildings to enhance temperature control, with the potential of heating being reduced by 50%.

Meanwhile, transport demand, the report claims, could be reduced by up to 78%, by increased use of public transport, walking, cycling and using EVs. The aim is also to cut flights by two thirds.

Increasing energy supplies

Based on the UK’s energy use figures in the last decade, it appears possible to meet demand with renewable and carbon-neutral energy-based sources.

Wind power would make up half with the rest being generated from geothermal, hydro, tidal and solar. Carbon-neutral synthetic fuels are also an important alternative to electricity.

Transforming land and diets

Diets can help us to reach carbon zero by switching from meat and dairy-based diets to plant-based proteins. CAT has said we can reduce on-farm greenhouse gas emissions by 57% and cut food imports from 42% to 17%. Three-quarters of current livestock can also be used for restoring forests and peatlands.

Also, as a country, CAT insists, we are currently importing many foods which could easily be grown in the UK.

Plenty of food for thought, I’m sure you’d agree!

Renewable electricity overtakes fossil fuels in the UK for the first time

A couple of days after the famous Ferrybridge power station cooling towers were razed to the ground, it was announced that, in the third quarter of 2019, for the first time history renewable energy generated more electricity than fossil fuel power stations in the United Kingdom.

The U.K’s wind farms, solar panels, biomass and hydro plants outstripped coal, oil and gas during the months of July, August and September, producing 29.5 terawatts (TWh), compared with just 29.1TWh, according to Carbon Brief.

The new milestone confirms predictions made by the National Grid that 2019 will be the first year since the industrial revolution that zero-carbon electricity – renewables and nuclear – overtakes gas and coal-fired power. New offshore wind farms have helped to take renewables past fossil fuels in a crucial tipping point in Britain’s Energy transition.

Less than 10 years ago fossil fuels made up four-fifths of the country’s electricity, which was split between gas and coal. However, the recent analysis undertaken by Carbon Brief shows that coal-fired power made up less than 1% of all electricity generated. This has resulted in British coal plants, such as Ferrybridge, which has dominated the Yorkshire skyline for around half a century, shutting down ahead of the 2025 ban. By next spring just four coal plants will remain in the UK.

Nuclear made up less than a fifth of the UK’s electricity in the last quarter, while wind power is the UK’s strongest source of renewable energy. The opening of wind farm schemes almost doubled the 2,100MW worth of offshore capacity which began powering homes in 2018.

Luke Clark of Renewable UK, stated the industry hopes to treble the size of its offshore wind sector by 2030 to generate more than a third of the UK’s electricity.

For more information on how Energy Management can help your business secure green energy for the future, contact a member of the team now on 01225-867722 or email sales@energymanagementltd.com.

Smart Export Guarantee – What is it?

Following the closure of the Feed in Tariff (FiT) to new applicants in March 2019, the need for payment for electricity exported to the grid by small-scale renewables was recognised. Thus, BEIS introduced the Smart Export Guarantee (SEG).

The Smart Export Guarantee is a mechanism designed to ensure people/businesses who generate renewable energy and export to the grid are paid fairly. It applies to any of the following renewable energy technologies;

  • Solar PV panels, onshore wind, anaerobic digestion, hydro – up to 5MW
  • Micro Combined heat and power – with an electrical capacity of up to 50kW

The Smart Export Guarantee will come into force from 1st January 2020. Anybody who already receives FiT on installations will be unaffected by SEG.

How much will you receive?

Nothing is set in stone, however, we predict that initial SEG tariffs to be straightforward, most likely offering a fixed pence per kWh export rate.

The only requirement for SEGs is that the tariff must always be greater than zero, effectively meaning it is up to energy suppliers to decide what to offer their customers. Tariffs will differ between suppliers and some may choose to offer multiple choices.

How can we help?

Energy Management has expert industry knowledge which allows us to guide you through the whole renewable energy installation process. We arrange and manage the installation of the infrastructure right the way through to the procurement of Power Purchase Agreements (PPAs) and SEGs.

For more information give a member of the team a call on 01225 867722, or alternatively email sales@energymanagementltd.com.