Renewable & Green Energy Round-up: June

Our team: Sam Tye

Fladgate’s Renewable & Green Energy Group highlight recent developments and topics of discussion affecting the renewable energy, electric vehicle and battery storage sectors.

  • Following completion of the Liberty Charge joint venture between the Charging Infrastructure Investment Fund, managed by Zouk Capital LLP (advised by Fladgate) & Liberty Global, Sam Tye, the Head of the Green Energy Group at Fladgate considers some of the issues facing the roll out of electric vehicle charging infrastructure and the UK government’s recent approach to these issues. Read more here.
  • With the increasing focus on a “green recovery” from the current Covid-19 induced lockdown the International Energy Agency has, in its Sustainable Recovery Plan, offered up a roadmap for the energy sector to “spur economic growth, create millions of jobs and put global emissions into structural decline”. There is significant progress to be made in decarbonising global economies if the Paris Agreement 2050 targets are to be met and the Sustainable Recovery Plan sets out a way forward to making that progress. This is an opportunity to make 2019 the year in which global emissions of greenhouse gasses peaked. Read more here.
  • 67 days without electricity being generated from coal in Great Britain! A huge, unprecedented, milestone. This should be a taste of things to come as the 2020s progress. At the same time there was significant wasted generation during that time and dramatically increased grid balancing costs. National Grid forecasts that there will be additional costs for balancing the grid of around £500 million for the period between May and August. There are huge efficiencies to be tapped into to reduce these costs and utilise renewable energy which is currently being wasted.
  • “The case for new and much of the existing coal power generation, is both environmentally and economically unjustifiable”. The cost of deploying new renewable generation has tumbled in the last ten years. And yet there is, according to the International Agency’s Energy Report 2020, more coal being added to global energy generation than is being retired from it. Read more here.
  • Low electricity demand and the sunniest month on record (for the UK) has resulted in the greenest month ever for Great Britain’s electricity grid.  May 2020 saw the lowest ever carbon intensity for the grid on Sunday 24 May and no coal on the grid for the entire month of May. During May renewable energy reached a peak share of 67.47% of the electricity grid
  • Western Power Distribution (the electricity distribution network operator for a significant part of England and Wales) has made public its interactive illustration of the distribution of growth of different renewable and low carbon technologies across its licence areas. This will likely be of significant interest to developers of low carbon and renewable projects. Read more here.
  • Whilst the record breaking contribution of green energy to the energy mix is, rightly, being celebrated it masks a worrying (if unsurprising) downward turn in energy investment in 2020. According to the International Energy Agency’s World Energy Investment 2020 report released in May, this year is expected to see the largest drop in global energy investment in history. Investment in new renewable generation, rooftop solar in particular, whilst not the most affected by the downturn has been set back. The Agency’s expectation is that global investment in renewables in 2020 will be 10% lower than in 2019. It was expected at the outset of this year that this would be the year in which post-subsidy development of renewable generation would accelerate in the UK. This seems unlikely now. Hopefully the UK Government will consider additional measures to incentivise increased investment in the renewable energy sector as part of its post Covid-19 stimulus package.
  • Some good news for existing and planned battery storage projects. Ofgem have announced their decision that electricity storage facilities will, with effect from April 2021, cease to pay two sets of Balancing Service Use of System (BSUoS) charges. Currently electricity storage providers pay BSUoS charges in relation to electricity that they import and export to the network. From April 2021 such providers will only pay the export charge. This change will remove one of the significant impediments to the financial viability of electricity storage projects.
  • In May the UK Government released a policy paper setting out the ambitions it intends to support using the electric vehicle (EV) Rapid Charging Fund. The Fund will assist in meeting electrical connection costs for EV charging sites which are not currently commercially viable but which are expected to be required to meet future demand. The three ambitions set out in the policy paper:
    1) 2023: at least 6 high powered, open access charge points at motorway service areas in England.
    2) 2030: 2,500 high powered charge points across England’s motorways and A roads.
    3) 2035: 6,000 high powered charge points across England’s motorways and A roads.
  • UK green energy records were set in April and May:
    – 67 days without energy generated by coal (10 April to 16 June 2020)
    – record solar generation on 20 April with a high of 9.68GW
    – record solar generation over a week long period in the week commencing 20 April.

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