Weekly News Review - 10th November 2023

Annual oil and gas licences planned with net zero commitment required

The UK government has announced plans to issue licenses for oil and gas projects every year although there will be a requirement to meet net zero targets. The legislation was set out in this week’s King’s Speech and will require the North Sea Transition Authority (NSTA) to invite applications for new production license on an annual basis, providing certainty and confidence to investors and industry.

Each annual licensing round will only take place if key tests are met that support the transition to net zero. The first test is that the UK must be projected to import more oil and gas from other countries than it produces at home. The second is that the carbon emissions associated with the production of UK gas are lower than the equivalent emissions from imported liquefied natural gas (LNG).

Prime Minister Rishi Sunak said: “I am proud that the UK is a world leader in reducing emissions, and of our new plan to transition to net zero without adding undue burdens on households and securing the country’s long-term interest.”

“Domestic energy will play a crucial role in the transition to net zero, supporting jobs and economic growth, while also protecting us from the volatility of international markets and diversifying our energy sources. The clarity and certainty that our new legislation will provide will help get the country on the right path for the future.”

However, the announcement has been met with criticism from opposition MPs and environmental groups who say that the new legislation will not improve energy security or reduce household bills. Energy Secretary Claire Coutinho even admitted that issuing new oil and gas licenses “wouldn’t necessarily bring energy bills down” and that investing in renewables was more likely to reduce bills.

Shadow climate secretary Ed Miliband responded by saying: “It is a stunning admission from this Government that, during the worst energy bills crisis in generations, their flagship King’s Speech energy policy won’t even take a penny off energy bills. The Conservatives are so out of touch that they have given up trying to bring down energy bills for British families.”

National Grid to accelerate up to 20GW of grid connections

National Grid has announced plans to accelerate the connection of up to 20GW of clean energy projects to its electricity transmission and distribution networks in England and Wales. 19 battery energy storage projects worth around 10GW will be offered dates to plug in to the transmission network, averaging four years earlier than their current agreement.

A further 10GW of capacity is set to be unlocked on its distribution network in the Midlands, South West of England and South Wales, bringing forward some ‘shovel ready’ schemes by up to five years. National Grid has already been in contact with more than 200 projects, with 16 expressing an interest in connecting in the next 12 months and another 180 looking to connect within two to five years.

Alice Delahunty, President of National Grid Electricity Transmission, said: “We’re committed to speeding up connections and creating a ‘fit for the future’ process for plugging projects into the grid. Bringing these battery projects forward is one of a range of actions that our electricity transmission business is delivering alongside the system operator and wider industry to unlock clean energy capacity in England and Wales.”

“We’re really encouraged by the recognition these early joint steps by our industry are receiving. They’re paving the way for the more fundamental connections reform that we’re collectively working with government and the regulator to deliver to keep Britain on track for a secure, affordable and net zero energy system.”

Cordi O’Hara, President of National Grid Electricity Distribution, said: “We’re delighted that so many customers have already expressed an interest in taking advantage of this additional capacity to accelerate the connection dates for their low carbon technologies.”

“But we’re not stopping there. Our second expression of interest will extend the offer to even more customers who will be able to benefit from our more agile approach to connections, enabling the UK to install the renewable generation needed to decarbonise the electricity system by 2035.”