Battery Storage: how can it benefit your business?

Renewable energy is key to building our sustainable future. The issue is that although solar and wind provide clean, inexpensive power, they only do so in the right conditions. A cloudy, windless day can lead to a significant drop in supply. This sort of intermittent power cannot provide the consistent energy we require, especially as our demand increases. This is why battery storage is becoming essential as we move away from fossil fuels.

Installing onsite power storage can be a simple process and technology breakthroughs have made it a viable and cost-effective option for many businesses. However, the benefits of battery storage go far beyond convenience. Developing an integrated battery solution is an effective way to fully optimise your energy capacity. It can enable businesses to become less reliant on the national grid, reduce CO2 emissions, and generate additional revenue for your business.

Reduce your electricity costs

Energy use at peak times can be expensive. Especially as it can have a huge effect on the non-commodity costs that you pay each year. Being able to purchase energy when it is at its cheapest and use it when you need it can make a huge difference to your utility bills.

Until battery technology came along, lowering your energy costs involved turning off devices or lowering usage. Battery storage is a far more flexible solution that offers opportunities outside of small-scale savings. When paired with renewable generation technology it can help you avoid non-commodity costs altogether. Or at the very least, help you avoid higher costs in times of peak demand.

Stabilise your energy supply

Having your own storage batteries guarantees a continuous source of power regardless of what is happening to the network. This reduces your reliance on the grid, protecting you from blackouts and local technical faults as well as securing a reliable energy supply.

Get paid to help balance the grid

With battery technology, energy can be stored for later use or sold back to the grid for additional revenue via potentially lucrative demand-side response (DSR) schemes. By becoming a demand-side supplier you are helping to balance the system and smooth out peaks in demand. This sort of initiative is a fundamental part of the government’s ongoing energy strategy. And further similar opportunities are likely to follow as we move towards 2050.

How EIC can help you store power

If your business could benefit from lower energy bills and a more stable supply, a battery setup could be the ideal solution. At EIC, we provide guidance on the installation of onsite generation and power storage.

While these systems can have great benefits on their own, the returns are even greater when working in tandem with other technology. We can offer energy management services that help improve your efficiency and further lower your expenses. If you would like more information on battery technology and want to explore your options, get in touch today.

Greenwashing – what is it and why should businesses avoid it?

As the world shifts towards a more sustainable future, consumers are opting for greener alternatives. And a growing pressure to ‘get green’ means that businesses are desperate to show their values align with environmental issues. This can sometimes result in ‘greenwashing’.

Without the correct knowledge, businesses risk prioritising superficially appealing demands to satisfy conscious consumerism. But as businesses around the world pledge to sustainability, indications of greenwashing can often go unnoticed.

Persistent greenwashing can undermine the importance of sustainability. As a consumer, trying to identify eco-friendly brands can be challenging enough. And with added greenwashed businesses, this task can feel overwhelming and next to impossible.

So, what is greenwashing and how can businesses avoid it?

What is greenwashing?

Coined in 1986 by environmentalist Jay Westerveld, ‘greenwashing’ refers to misinformation provided by a business to falsely present itself as environmentally friendly.

More often than not, greenwashing happens due to a lack of knowledge. While sustainability continues to become a more prominent topic of conversation, so does the pressure to comply. This means companies are increasingly keen to exhibit their sustainable credentials, even if they don’t have environmental expertise.

Greenwashing often distracts from significant environmental issues such as climate change and pollution. It can also misdirect environmentally conscious customers towards dis-ingenuine products. This is because it can be hard to differentiate between well intentioned businesses with those that are performatively green. ‘The six sins of greenwashing’, is a list of indicators that can help consumers spot a business that has been greenwashed.

The six sins of greenwashing

The six sins of greenwashing

No proof: Claims made about a lessening of a businesses environmental impact are not verified by third party certifications.

Vagueness: Broad, insubstantial or convoluted claims such as ‘all natural’, ‘made with recycled materials’ or ‘eco-friendly’, with no further information.

The hidden trade-off: Marketing a product or service as ‘green’ by a narrow definition that disregards other environmental impacts. An example of this was fast food chain McDonald’s switch to paper straws. Although consumers may have welcomed this change initially, it was soon revealed that these straws were still unrecyclable.

Irrelevance: Although the claim may be true, it is unrelated to the company or product.

Lesser of two evils: Touting one good sustainable aspect of the business while ignoring greater environmental harm.

Fibbing: The sin of outright lying, this was seen very clearly in the case of the Volkswagen scandal of 2015. The car company admitted to cheating emissions tests by fitting defeat devices to vehicles in question. This allowed the company to use proprietary software to detect emission tests and in turn reduce levels. Whilst they were knowingly greenwashing their products, in reality they were releasing 40x the permitted limit of nitrogen oxide pollutants.

How can businesses avoid greenwashing?

In the run up to the UK’s net zero commitments, it is within everyone’s interest for businesses to become truly sustainable. Switching to renewables, incorporating low carbon tech and educating staff are some of the ways that businesses can avoid accidental greenwashing.

To promote a sustainable ethos, a business must first achieve sustainability goals. Providing customers with complete transparency not only reassures them of your reliability, but also allows for a wider range of potential clients.

Delivering real change is essential in moving towards a green future. While greenwashing allows businesses to pull in revenue in the short term, it will have serious consequences further down the line.

How can EIC help?

At EIC we prioritise sustainability and transparency. Our expert team are on hand to help your business become as green as possible.

Years of experience allow us to identify the best areas of savings for your business. We believe the future is sustainable and we are dedicated to getting our clients on the right path towards it.

Get in touch to hear how we can help you begin your sustainability journey.

The EII Exemption Scheme: everything you need to know

What is the energy-intensive industries (EII) exemption scheme?

The EII exemption scheme aims to help big energy users stay competitive in a global market. Qualifying businesses can claim an exemption of up to 85% of their Contract for Differences (CfD), Renewables Obligation (RO), and Feed-in Tariff (FiT) costs. Providing firm financial footing in a post-Covid economy.

Why was the EII exemption scheme launched?

The UK has pledged to achieve net zero emissions by 2050, which will require a transformative shift towards clean energy across the economy. This has resulted in a variety of government schemes which encourage the rise of electricity generated from renewable and low carbon sources.

This initiative has seen success, with renewables accounting for 47% of the UK’s generation in the first quarter of 2020. And even as consumption dropped in Q2, wind power generated electricity continued to rise due to increased capacity. This upwards trajectory is only expected to accelerate, with promising new renewable energy projects on the horizon.

The levies and obligations funding this growth are initially covered by energy suppliers. But, these costs are passed down to domestic and non-domestic consumers in the form of higher energy bills.

This puts energy-intensive businesses at a disadvantage. Especially when competing against their EU counterparts with lower energy costs. The launch of the EII exemption scheme is a solution to this problem and aims to maintain the UK’s position in the global market.

When was the scheme rolled out?

The original solution to the issue of higher costs for EIIs was a compensation scheme launched in 2016. This allowed big energy users to apply for relief from the energy costs they had already paid.

This was then replaced by the EII exemption scheme, rolled out between autumn 2017 and spring 2018. This change of approach is meant to offer energy-intensive businesses more long time certainty and stability as well as higher cost savings.

eii

Who can apply?

To be eligible for an EII exemption, a business must meet five key requirements.

  • The business must manufacture a product in the UK within an eligible sector – the “sector level test”.
  • The business must pass a 20% electricity intensity test – the “business level test”.
  • The business must not be an Undertaking in Difficulty (UID) – the UID guidelines explain that “an undertaking is considered to be in difficulty when, without intervention by the State, it will almost certainly be condemned to going out of business in the short or medium term.”
  • The business must have at least two quarters of financial data.
  • The application must contain evidence of the proportion of electricity used to manufacture the product for a period of at least three months.

Learn more about applying for an exemption certificate.

Big energy users who do not qualify for the EII exemption scheme should still be aware of rising energy costs. They should explore schemes such as Carbon Footprinting, Energy Audits, Streamlined Energy and Carbon Reporting (SECR) and Energy Savings Opportunity Scheme (ESOS). These can provide invaluable insight into your environmental impact and routes to improve energy efficiency within your company.

Has Covid-19 had an impact on the scheme?

Covid-19 has thrown various sectors of the UK economy into a state of uncertainty and decline. The energy sector was especially impacted by the fall in energy consumption in the first six months of 2020. And resulted in a subsequent drop in electricity prices. This could make it more difficult to calculate a business’ energy intensity and whether it is “in difficulty”. Because of this, the government will be excluding the period from 31 December 2019 to 30 June 2020 from its assessment of whether a business is in financial difficulty or not.

How can EIC help?

Here at EIC, we support big energy users with the management of their energy, buildings, carbon and compliance. As a result, we’re able to uncover actionable insights that allow you to manage and control all elements of your energy bill on both sides of the meter.

Armed with a comprehensive understanding of government schemes and legislation, we can help turn your frustrating admin into rewarding opportunities. We can navigate complex applications such as that for the EII exemption certificate – saving you valuable time and resources.

Contact us to learn more about how EIC can help your business.

2021 outlook for big energy users

Covid-19 continues to give rise to uncertainty and financial volatility across the globe. And while there is a potential end in sight, there is still a long road to normality ahead.

Fortunately, the UK has set out a sustainable recovery plan focused on fighting climate change and revolutionising the energy sector. This green wave will bring with it a range of challenges and opportunities for big energy users across the private and public sectors.

Looking forward

With COP26 around the corner and a 2050 net zero target to consider, the UK’s decarbonisation efforts have increased significantly. The past year has seen announcements like plans for the issue of the UK’s first green bond, a 2030 ban on petrol cars, and mandatory TCFD recommendations for large businesses. These green initiatives culminated in the highly anticipated new energy white paper which maps out a clean energy transformation. Fuelled by the evolution of technology like AI and IoT, the energy landscape is predicted to be more flexible and transparent than ever before.

However, whilst it’s fairly clear what is on the horizon for the energy sector, there is less certainty around the energy market. Will energy prices continue to recover as demand rises post-Covid? Will the increased reliance on renewables make energy prices more volatile? How will Brexit impact the energy market if at all? And how can big energy users find opportunities in the current uncertainty?

EIC’s ‘2021 outlook for big energy users’ report

Our report outlines the upcoming trends for big energy users and how EIC’s team of energy specialists can help businesses stay ahead of the curve.

2021 energy outlook for big energy users

Download our ‘2021 energy outlook for big energy users’ report


How EIC can help

The UK’s decarbonisation mission will rely upon a changing energy mix, more flexible energy grids, innovative tech, and widespread improvement of energy efficiency. At EIC we like to offer next generation solutions that help our clients prepare for a green future.

Our sister company t-mac delivers compelling metering, monitoring and BMS controls solutions via our in-house team. This is just one of many innovative services that can revolutionise the way you run your business. Allowing you to manage and control all elements of your energy bill on both sides of the meter.

EIC’s services can transform your wider energy strategy to encompass efficiency and self-sufficiency. We can also guide you through compliance with complex carbon legislation, making sure you are working towards ambitious net zero targets.

To learn more about optimising your sustainability strategy contact us at EIC today.

Carbon Neutral: the newest Climate Change war cry

In 2019 EU leaders endorsed the European Commission’s Green Deal, a strategy through which to achieve climate neutrality by 2050. Since then there’s been a slow but steady rise in legislation around, and investment in, renewable energy, low carbon solutions and, more recently, carbon sequestration and storage. The objective has recently been embraced by other global leaders, with recent 2050 pledges from Japan and South Korea. Even China has announced a net zero commitment by 2060.

We break down what carbon neutral means, why it is crucial in the fight against climate change, and how we can achieve carbon neutrality by 2050.

 

What does carbon neutral mean?

When we hear the word carbon, we often think of something harmful that needs getting rid of, which isn’t entirely accurate. Carbon, after all, is a part of all living things, and there is a natural cycle that balances the carbon emitted with the carbon absorbed by plants and soil.

The problem is that humans have disrupted this balance by emitting more carbon than can be absorbed. Through the use of fossil fuels, the deforestation of rainforests, massive population growth, overfishing, and harmful agricultural developments, we are essentially poisoning our planet.

Carbon neutral means there’s a balance between carbon emissions and absorption, so to achieve this we have to emit less and absorb more. This can be done through the adoption of renewable energy, carbon sequestration, reforestation projects, and regenerative farming practices. This holistic approach to fighting climate change could put us on a path towards a more sustainable future.

What it means for the energy industry

Achieving carbon neutrality will require action from all sectors of the economy, the most important being the energy industry. Energy production and use is currently responsible for 75% of greenhouse gas emissions in the EU. Large-scale policy will play a large part in propelling the necessary transformation across the energy industry in order to cut and even capture carbon emissions. However, it will take action from every sector within the energy industry, from buildings being made more energy efficient to our energy sources themselves.

This will mean more commitments to renewable energy options in the UK, more efficient utility monitoring and management, as well as improved energy storage options. We will have to move towards an integrated, flexible energy system that exploits local resources and reduces our reliance on imported oil and gas. There are also recent advancements in carbon sequestration and storage that can be joined with energy generation itself which can make zero or low carbon energy options carbon negative.

As with any sector, change in the energy industry requires action on the parts of everyone who produces, invests in, or consumes energy. Every building and organisation can make a difference, and EIC can help.

 

How EIC is working towards Carbon Neutral

Major changes have to be made in every sector of the economy, from the food we grow to the way we travel. We at EIC are doing everything we can to support the changes needed within the energy industry. By helping organisations monitor and reduce their carbon footprints, navigating tricky compliance legislation, and advising on green energy procurement options, we are simplifying sustainability for businesses.

CCA Deadline Approaching: 30th November

The CCA applications deadline draws close and EIC explores the benefits of compliance and why firms should submit their application as soon as they can.

The two-minute warning

After half a year in lockdown energy professionals could be forgiven for falling out of touch with current events. Isolation has left many of us with that post-Christmas, pre-new year feeling of not knowing our days and weeks apart.

That is why EIC has taken the time to put together a small reminder of the now-imminent CCA (Climate Change Agreements) deadline and why it is worth paying attention to.

Climate Change Agreements allow energy-intensive firms to receive reductions on their Climate Change Levy (CCL) obligations, in return for abiding by set energy efficiency targets.

The government extended the CCA for a further two years back in June. Which gives eligible organisations as much as a 92% reduction – on electricity, and up to 83% on gas from payment of the CCL (Climate Change Levy).

The scheme is as potent as it is ambitious. The latest extension alone offers the entire UK business sector approximately £300m per annum in savings.

The scheme is open to new entrants for the first time since 2018 and presents an unequalled opportunity for energy-related savings. However, the time is drawing near to apply for the extension to the scheme, with some trade associations requiring submission up to 4 weeks beforehand.

In addition to this added processing period, the process of assuring compliance can often be complex and long-winded. This latest target carries several charges including an increase in both buy-out prices as well as the financial penalty price for target period 5.

A helping hand

Energy professionals who are now trying to wade against the current of recession to stay afloat may simply not have the time or capacity to undertake the CCA process – thereby risking missing out on this golden opportunity.

EIC demystifies this process, adopting a 360 degree view, assessing the benefits to your organisation and advising of scheme’s requirements. EIC can fully manage the data and reporting requirements of the CCA process, alleviating the burden on your resource, whilst receiving the benefits available. To get started on the CCA compliance process, your organisation can find EIC’s full carbon offering here.

Private investment, public gain: Green investment after lockdown

EIC discusses the Northvolt gigafactory, and how private funding is now flooding into green investment and sustainability projects.

Recharging capital

It began with grassroots environmentalism, then government mandate and finally, major financial institutions have started supporting a green future in earnest. Support in the form of loans and bonds for sustainable economic development and innovation, specifically solar storage options.

One such investment occurred last Thursday as the European Investment Bank (EIB) issued a €350 million loan to Northvolt for its lithium battery plant.

The site is based in Northern Sweden and is intended to produce the most environmentally-friendly battery storage packs to date. Using 100% renewable energy and locally-sourced materials, it will soften the characteristically high environmental cost of the Lithium-ion batteries it produces.

The cells will be used mainly in cars, which are responsible for 12% of the EU’s current carbon footprint.

Northvolt has already secured a €2bn supply contract with BMW and Volkswagen is interested in collaborating on a similar factory in Germany. The latter of these two is no surprise after VW unveiled plans to convert its Emden production plant to electric vehicle production.

birds eye view of land by the seaLofty ambitions

The gigafactory will have an initial production capacity of 16 GWh per year and be the first of its kind.

Both the investor and supplier share similarly ambitious intentions moving forward as well. Northvolt plans to scale capacity to 40GWh annually while, back in May, EIB stated its intention to increase green investment financing to over €1bn by the end of the year.

China still dominates the solar battery market, of course, producing more than five times that amount in 2019 alone. However, Northvolt and EIB have just set an important precedent and other banks are now joining the green investment fray.

“I believe that EIB financing support for Northvolt has been a textbook example of how our financial and technical due diligence can help crowd in private investors to visionary projects,”

Andrew McDowell, VP EIB

The COVID-19 lockdown has wrought chaos in several energy markets, most notably West Texas Intermediate – which went negative for the first time in April.

Projections show global growth shrinking to -3% after such dramatic losses in this market, as well as many others. Fortunately, the immediate crisis of COVID-19 has not blinkered business and political leaders to the looming threat of climate change.

Despite these losses, April saw a 272% increase of ESG (environmental, social, governance) bonds compared to April last year.

Green investment rush

Finally, investment in green infrastructure has become vogue among Europe’s financiers and firms should take notice. Last week Sadiq Khan promised £1.5bn to upgrade London’s water and gas networks and prepare for more electric vehicle use.

Beyond our shores, Danish investment bank, Saxo, is already making predictions about renewable technology taking over the global market.

“Governments will increase investments and subsidies for ‘green’ industries, starting a new mega trend in equity markets… We believe that these green stocks could, over time, become some of the world’s most valuable companies”

Peter Garnry, Saxo Bank Head of Equity Strategy

Renewable technology rewards boldness and expediency with huge ROI over time. However, the endorsement of institutions like BlackRock and EIB helps reduce risk profiles, making it more attractive to investors.

EIC have championed firms renewable interests for over 40 years, buying and managing approximately 12TWh of energy each year.

The EIC sustainability offering provides carbon compliance, utility management and procurement advice. Combining this expertise under one banner, you and your investors will have all your bases covered when outfitting your firm for a low carbon future.

Here comes the Sun

EIC explores the benefits and future of on-site solar generation for businesses, how COVID-19 has highlighted and bolstered the strengths of solar power and how EIC can help businesses engage with the technology.

The wild blue yonder

Lockdown, while effective, has been a source of ongoing financial and emotional strain for many in the UK and businesses are no exception. However, there have been a number of benefits to this economic slowing that perhaps are going overlooked.

Chiefly, air pollution, in proportion with industrial energy demand, has dropped significantly. Combined with the severe oversupply of Oil and faltering resilience of fossil fuels generally, this has given solar generation the opportunity to enjoy a moment in the sun. 

However, solar is not a recent arrival to the energy scene, existing theoretically since at least 1839 thanks to French scientist Edmund Bacquerel. Bacquerel’s work was groundbreaking because it was the first time that solid material with no moving parts had been used to convert sunlight directly into electrical energy.

A guiding light

Since 1839, we’ve come a long way and furthest perhaps in the last five years, during which time the costs of solar have halved while storage options have improved consistently with the introduction of graphene and vanadium technology.

The conditions of lockdown have demonstrated that renewable energy sources are likely to be the most resilient to the supply chain disruptions that a major crisis can create. 

In fact, EU solar generation jumped by 28% year-on-year, between March 28th and April 26th of this year compared to 2019, breaking generation records while doing so. 

Energy security is a basic necessity for the survival of any business and, as such, will be a subject of great scrutiny throughout lockdown and in its aftermath. Novel technologies like on-site generation will become more attractive, not only for their resilience but for the savings that their flexibility offers. 

The use of on-site photovoltaics can also improve a company’s carbon profile while providing a measure of protection against supply failure. 

EIC manages around 12TWH each year and with over 40 years industry experience, we are able to create bespoke energy solutions for your needs. We can help you engage with on-site generation, saving you as much as 20% on your energy usage or 40% when combined with on-site battery storage. Better still, in times of plenty, you’ll be able to sell excess energy back to the grid and further offset energy costs. 

Our solutions page contains full details of our on-site generation and storage offerings, as well as further information on the compliance service we provide that can be bolstered by such technology.

 

Ofgem publish update to Targeted Charging Review proposals

In the meantime, the regulator has released a letter detailing guidelines on residual charging proposals and renewables modelling.

Residual charging proposals

In the ‘minded-to’ consultation, published in November 2018, Ofgem proposed two leading options for reform for residual electricity network charges. The options were; a fixed charge, or an agreed capacity charge. Ofgem indicated that they preferred a fixed residual charge.

Most respondents to the consultation also expressed support for the fixed charge. However, there was some disagreement with the structure of the proposal, predominantly with user segments associated with this pricing option.

Some respondents expressed that the fixed charges should take more account of the diversity of non-domestic users, pointing out that individual bands could contain a wide range of different user sizes. It was also highlighted that Ofgem’s proposed basis for segments could be seen as arbitrary.

In light of this feedback, Ofgem’s refined proposal for non-domestic customer segmentation is that:

  • total allowed residual revenue would first be apportioned between voltage levels, on the basis of net volumes, as set out in the November 2018 minded-to consultation;
  • non-domestic segment boundaries would be set in terms of agreed capacity levels for users at higher voltages where this data is widely available, and net volume levels at Low Voltage (LV). This is in place of segmenting these users on the basis of the line-loss factor classes (as set out in the November minded-to consultation).

Ofgem has identified five national level charging bands for Low Voltage non-domestic users and five each for High Voltage (HV) / Extra High Voltage (EHV) non-domestic users. The banding is the same for HV and EHV customers, but their share of the residual charges is calculated at voltage level resulting in fifteen charges in total.

The refined band thresholds would be applied on a consistent basis across the country. Users would be allocated on a historic basis and updated in line with price controls. Incentives are expected to be reduced in a bid to change behaviour in response to residual changes.

The option for agreed capacity has been left open by Ofgem. The regulator has stated that where more users collect agreed capacity data there could be the opportunity to transition charges to an agreed capacity or more appropriate basis.

The Targeted Charging Review

EIC has a more detailed breakdown of the Targeted Charging Review that can be read here.

An update on Smart Export Guarantee

The Department of Business, Energy and Industrial Strategy (BEIS) has published a response to their consultation on the future for small-scale low-carbon generation, which sought views on policy proposals for a Smart Export Guarantee (SEG).

The SEG will require suppliers with at least 150,000 domestic customers to provide a minimum of one tariff offer to small-scale low-carbon generators. Exporters of up to 5MW capacity of anaerobic digestion, hydro, micro-combined heat and power, onshore wind, and solar photovoltaics are eligible for payment.

It is the government’s opinion that small-scale low-carbon electricity generation should be supported by competitive, market-based solutions. To this effect, the government will not specify a minimum tariff rate in order to allow the market to develop. However, a supplier must provide payment greater than zero at all times of export.

The SEG is a replacement for the Feed-in Tariff (FiT), which closed to new generators in March 2019. The Feed-in Tariff scheme was originally introduced in April 2010 in order to incentivise the development of small-scale renewable generation from decentralised energy solutions. Generators were paid a fixed rate determined by the Government, which varied by technology and scale.

How will this impact you?

All suppliers that meet the SEG criteria will be required to offer at least one tariff by an expected date of 31 December 2019, providing small-scale generators with a choice of who they want to export to.

Currently, there are very few suppliers that offer tariffs of this nature. However, as the deadline approaches it can be expected that all larger suppliers will begin to offer their own options, allowing generators to choose the best tariff for themselves.

Stay informed with EIC insights

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the most timely updates you can find us on Twitter and LinkedIn Follow us today.

Visit our webpage to find out more about EIC Market Intelligence and how we keep our clients informed at a frequency to suit them.

Energy Policy Dates for 2019

As we look ahead to 2019, we’ve outlined key energy industry changes and dates to take action by.

EU ETS – Market Stability Reserve (MSR)

1 January – MSR Implementation

The European Commission is introducing a solution to the oversupply of allowances in the carbon market, which will take effect in January.

EU carbon allowances, or European Allowances (EUAs) serve as the unit of compliance under the European Emissions Trading Scheme (EU ETS). In response to a build-up of these allowances, following the 2008 global financial crisis, the European Commission has introduced a long-term solution known as the Market Stability Reserve (MSR). With Brexit looming, there’s uncertainty as to whether these changes will affect the UK.

 

Energy Price Cap

1 January – Price Cap implementation

Price protection for 11 million customers on poor value default tariffs will come into force on 1 January 2019. Ofgem has set the final level of the price cap at £1,136 per year for a typical dual fuel customer paying by direct debit.

When the price cap comes into force suppliers will have to cut the price of their default tariffs, including standard variable tariffs, to the level of or below the cap, forcing them to scrap excess charges. The cap will save customers who use a typical amount of gas and electricity around £76 per year on average, with customers on the most expensive tariffs saving about £120. In total, it is estimated that the price cap will save consumers in Great Britain around £1 billion. Read more here.

 

Ofgem’s Targeted Charging Review (TCR) – the end of Triad season?

4 February – Consultation conclusion

Ofgem has launched a consultation, due to conclude on 4 February 2019, into how the costs of transporting electricity to homes, public organisations, and businesses are recovered. Proposed changes could remove the incentive for Triad avoidance.

Costs for transporting electricity are currently recouped through two types of charges:

  • Forward-looking charges, which send signals to how costs will change with network usage
  • Residual charges, which recover the remainder of the costs

In order to ensure that these costs are shared fairly amongst all users of the electricity network, Ofgem are undertaking a review of the residual network charges, as well as some of the remaining Embedded Benefits, through the Targeted Charging Review (TCR). Ofgem are exploring the removal of the Embedded Benefit relating to charging suppliers for balancing services on the basis of gross demand at the relevant grid supply point. This is important as it would eliminate the incentive of Triad avoidance.

 

Brexit

29 March – Scheduled date to leave the EU

Whilst not a specific energy policy announcement, the UK’s departure from the EU is a significant event that has raised a lot of questions concerning UK energy security.

We put together a Q&A on how Brexit may impact the UK energy industry and climate change targets. Read more here.

 

Closure of the Feed-in Tariff (FiT) scheme

31 March – Scheme Closes

The Government has confirmed plans to remove the export tariff for solar power, which currently provides owners of solar PV panels revenue for excess energy that they generate. This will coincide with the closure of the Feed-in Tariff (FiT) scheme.

The FiT scheme was introduced in April 2010 in order to incentivise the development of small scale renewable generation from decentralised energy solutions such as solar photovoltaics (PV), wind, hydro, anaerobic digestion and micro Combined Heat and Power (CHP). Generators were paid a fixed rate determined by the Government, which varied by technology and scale.

The scheme will close in full to new applications from 31 March 2019, subject to the time-limited extensions and grace period.

 

Streamlined Energy and Carbon Reporting (SECR)

1 April – SECR implementation

Streamlined Energy and Carbon Reporting (SECR) is on the way, due to come in to effect from 1 April 2019. The introduction of this new carbon compliance scheme aims to reduce some of the administrative burden of overlapping schemes and improve the visibility of energy and carbon emissions when the CRC scheme ends.

EIC can help you achieve compliance. Read more about Streamlined Energy and Carbon Reporting (SECR) by clicking here.

 

UK Capacity Market

Early 2019

The UK Capacity Market is currently undergoing a temporary suspension, issued by the European Court of Justice (ECJ), on the back of a legal challenge that the auction was biased towards fossil fuel generators.

The ECJ’s decision means that payments made under the Capacity Market (CM) scheme will be frozen until the UK Government can obtain permission from the European Commission to continue. In addition, the UK will not be allowed to conduct any further CM auctions for energy firms to bid on new contracts.

The UK government has since iterated that it hopes to start the Capacity Market as soon as possible and intends to run a T-1 top-up auction next summer, for delivery in winter. This is dependent on the success of a formal investigation to be undertaken by the European Commission early in the New Year.

 

Spring Statement and Autumn Budget

The UK Government’s biannual financial updates are always worth looking out for.

The Spring Statement will be delivered in March and the more substantial Autumn Budget is scheduled for October. The 2018 budget had a very heavy focus on Brexit, with very little to say concerning energy policy. It is likely this will be the case for the Spring Statement and potentially going forward.

 

Energy Savings Opportunity Scheme (ESOS)

5 December – ESOS Phase 2 compliance deadline

ESOS provides a real chance to improve the energy efficiency of your business, on a continual basis, to make significant cost savings.

In Phase 1 of ESOS we identified 2,829 individual energy efficiency opportunities, equivalent to 461GWh or £43.9m of annual savings across 1,148 individual audits. Our team also helped over 300 ESOS Phase 1 clients avoid combined maximum penalties of over £48million.

With EIC you can achieve timely compliance and make the most of any recommendations identified in your ESOS report.

 

Stay informed with EIC insights

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the most timely updates you can find us on Twitter and LinkedIn Follow us today.

Visit our website to find out more about EIC Market Intelligence and how we keep our clients informed at a frequency to suit them.

Government confirms closure of Feed-in Tariff

The Government has confirmed plans to remove the export tariff for solar power, which currently provides owners of PV panels revenue for excess energy that they generate. This will coincide with the closure of the Feed-in Tariff (FiT) scheme.

Though a large proportion of respondents to the governmental consultation disagreed with the plans, the Department for Business, Energy and Industrial Strategy (BEIS) has decided that both the Feed-in Tariff subsidy scheme and the export tariff will close to new participants after March next 2019.

 

What was the Feed-in Tariff (FiT) scheme?

The Feed-in Tariff scheme was introduced in April 2010 in order to incentivise the development of small-scale renewable generation from decentralised energy solutions such as solar photovoltaics (PV), wind, hydro, anaerobic digestion, and micro Combined Heat and Power (CHP). Generators were paid a fixed rate determined by the Government, which varied by technology and scale.

Payments to the small-scale generators were made quarterly by FiT-licensed suppliers and recovered from all consumers. A levelisation process also took place every quarter, as not all suppliers were required to offer FiTs and their exposure to the scheme varied.

 

The Government response

The response from the Government argues that the closure of the FiT scheme represents their “desire to move towards fairer, cost reflective pricing and the continued drive to minimise support costs on consumers”, adding that the current scheme does not support the vision set out in either the Industrial Strategy or the Clean Growth Strategy.

The scheme will close in full to new applications from 31 March 2019, subject to the time-limited extensions and grace period.

The Government has decided to provide a 12-month grace period for “Renewals Obligation Order Feed-In Tariff (ROO-FiT) scale” (all hydro and anaerobic digestion, solar PV, and wind with a declared net capacity over 50kW) installations that apply for preliminary accreditation on or before the cut-off date, are accepted into the cap, and then suffer grid and/or radar delay beyond their control. This means they are unable to accredit during their preliminary accreditation validity period.

It’s also been decided that projects in oversubscribed deployments caps at the close of the scheme will not be eligible for either generation or export tariff payments under the scheme, and so Ofgem will not grant them preliminary or full accreditation.

 

How will this impact you?

The results of these closures will mean that anyone that adds solar generation from April 2019 will not be paid for any excess power that is exported to the grid. These changes will not affect the circa 800,000 homes that have already solar panels fitted since the Feed-in Tariff scheme launched in 2010.

The Government is reportedly preparing to announce a market-based replacement to the export tariff early in the New Year, which would see new rules on how suppliers could purchase the excess power.

However, there will likely be a gap between the closure of the Tariff and the implementation of any new plans, meaning any new solar generators will be affected during this time.

 

We can help you realise the benefits of decentralised energy

Solutions such as Solar, Battery Storage, and Combined Heat & Power (CHP) can be an integral part of your wider energy strategy, as well as generate additional revenue through lucrative Demand Side Response (DSR) schemes.

To find out how, visit our webpage, call us on 01527 511 757, or email info@eic.co.uk.