Political News-Miliband takes action on queue to connect new power generation to the grid

New rules to revamp the way power plants get connected to the UK’s power grid are proposed today by Energy and Climate Secretary Ed Miliband.

The shake-up will help new projects waiting to get a date to feed electricity into the grid to get out of the queue, and will in particular help renewable energy projects such as wind farms.

There is currently over 60 GW of new generation capacity – around 200 projects – that are waiting to be connected to the grid, including around 17 GW from renewable sources.Ed Miliband announced as part of the Government’s Low Carbon Transition Plan in July that the Government would reform the previous system of projects getting a connection date on a first come, first served basis regardless of when the project would start generating energy. This meant some wind farms were given connection dates years after when they were due to start producing electricity. Today’s consultation offers industry a say on three options for how the new system will work.

The proposed scheme will also give investors confidence that projects will be given a connection date that fits in with their project development timeline.

Ed Miliband said:

“Access to the electricity grid has been one of the key barriers to the generation of renewable energy in this country. We are determined to resolve this issue. That is why we took powers to do so in the Energy Act and today we are setting out our proposals.

“We need these new projects to get hooked up to the grid as soon as they are ready – both to help tackle climate change and secure our future energy supplies.

“The government will do whatever is necessary to bring about the transition to a low carbon economy and to give investors the certainty they need so that new renewable energy generation is built.”

For the first time, the Government will be making the detailed reforms to grid access rules that are necessary to overcome the delays. Previously, reforms were proposed
by industry and then approved or rejected by the regulator, Ofgem.

There are three proposed models that DECC is consulting on from today that build on industry and Ofgem’s work over the last year.

The three models look at different ways to manage the queue and to share the cost of connecting more plants to the system that is to be expected from this system.

The models are:

1.Connect and Manage (Socialised): - costs will be shared between all users of the network.
2. Connect and Manage (Hybrid): A model that targets some, but not all, of the additional constraint costs on new entrant power stations.
3. Connect and Manage (Shared Cost and Commitment): A model that offers the choice to new and existing power stations to commit to the network (which is helpful to Grid in terms of long term management of system) in return for greater certainty over charges, or to opt out and be exposed to additional constraint costs.

Ofgem has already approved interim arrangements to help new power stations connect more quickly, and under these interim arrangements around 1 GW of renewable projects in Scotland have already been offered earlier connection dates. However this was only ever intended as an interim measure and Government is intervening to ensure enduring access arrangements are put in place by June next year. This will be essential for investor confidence that we have a long-term and sustainable framework in place.

Click Here to view the full consultation

Political News-Summary of UK Governments Renewable Energy Low Carbon Transition Plan

Ed Miliband has today announced its strategy for meeting carbon emissions targets and to a massive increase in renewable energy.

The announcements today are to demonstrate the government is committed to fighting climate change and reducing carbon emissions.

In a wide ranging announcement Ed Miliband covered all of the main issues including the focus on the technologies needed, infrastructure, feed in tariffs and the need to have skilled work force that can fuel the ‘green economy’.

Summary of the key points

General Notes
•Regional Development Agencies will play a crucial role in partnership with the Government to promote the development of market-led technology clusters for low carbon energy developers.

•South-West will be developed into the worlds first Low Carbon Economic Area.

•The Government and the Technology Strategy Board will work to improve collaboration and knowledge sharing within and beyond the UK through the launch of the Energy Knowledge Transfer Network as a one stop shop for investors and developers in energy generation.

•The Intellectual Property Office will consider how the Government can support small- and medium-sized businesses developing low carbon technologies to license them in developing countries.

•Renewable Energy Industry will be supported with an additional £4billion from the EU Investment Bank. In the short term the government thinks it will be able to bring forward £1 billion for small and medium sized renewable projects.

Marine
•The Government is allocating up to an additional £60 million for a suite of measures which will help accelerate the development and deployment of wave and tidal energy in the UK and will cement our current position as a global leader in the sector.

•The Government will double its financial support to Wave Hub – the development of a significant demonstration and testing facility off the Cornish coast – with up to £9.5 million of investment. The Government is also proposing to invest up to £10 million at NaREC, the New and Renewable Energy Centre, in the North East to build on and utilise existing infrastructure to provide an open access facility for marine developers to test and prove designs/components onshore.

•The Government will also provide up to £10 million to support the South West’s significant potential for wave and tidal energy deployment, research, demonstration and engineering and up to an additional £8 million from the UK Environmental Transformation Fund to expand the in-sea stage testing facilities at EMEC, the European Marine Energy Centre, in the Orkneys.

•In addition the Government will launch a Marine Renewables Proving Fund which will provide up to £22 million of grant funding for the testing and demonstration of pre-commercial wave and tidal stream devices. This will accelerate wave and tidal technologies’ move towards commercial demonstration and assist the development of successful projects under the Marine Renewable Deployment Fund. Taken together, these investments will provide the UK with unparalleled testing and demonstration facilities.

Emmissions and Trading Cap
•Emissions in the traded sector, for the purposes of accounting under the Climate Change Act, are fixed at the level of the UK’s share of the declining EU Emissions Trading System cap.

This will be equal to the level of auctioning rights the UK receives plus the number of EU allowances that are freely allocated to UK installations. Combined with the emissions reductions that measures in the non-traded sector are expected to deliver shows how the UK, on central projections, will meet the first three carbon budgets.

Wind
•The Renewable Energy Strategy recommits the Government to a massive increase in renewables generation going up from 5% today to 30% by 2020. Based on the figures in last year’s draft strategy this implies 22% of all electricity will come from offshore and onshore wind and another 2% from marine technologies.

Carbon Capture and Storage

•The Department of Energy and Climate Change will also establish an Office of Carbon Capture and Storage to support the delivery of this work. Full details will be announced in the autumn of 2009.

•In 2007 the Government launched a competition to build one of the first commercial scale projects in the world. In April 2009 the Government announced that new fossil fuel power stations would have to be designed and built so that they could fit CCS in the future.

•In a consultation launched in June 2009, the Government proposed a new financial and regulatory framework to drive the development of CCS. These proposals included plans to fund up to four CCS demonstrations in the UK and a requirement for any new coal power station to demonstrate CCS.

•The Government is considering how to encourage clusters of CCS infrastructure and expertise, in key areas, such as Yorkshire and Humber, the Thames Estuary, the Firth of Forth, Tyne/ Tees and Merseyside, bringing major employment and regeneration benefits.

Local Generation and Feed in Tariffs
•The Government working with the energy Saving Trust, energy companies, Local Authorities, the Distribution Network Operators (DNOs) and others to test the uptake in the interest of the ‘whole house’ approach. The government are going to put up to £4m to support these initiatives.

•The Government is putting in place financial rewards for small-scale low carbon electricity generation, with Feed-in Tariffs from April 2010. Payment for the electricity produced by small-scale generators, will be provided through the electricity supply companies and encourage the uptake of renewables by schools, homeowners, hospitals, businesses and communities.

Job Creation and Training
•Renewable energy also requires specialist skills. The Office for Renewable Energy Deployment is working with industry on a strategy for skills in wind, wave and tidal energy and is also establishing the National Skills Academy for Power. Full plans will be published towards the end of 2009.

Planning and enabling timely investment:
•The government is committed to delivering sufficient financial investment, and ensuring the attractiveness of the UK as a place to invest.

•Ensuring planning policies support the development and installation of low carbon technologies. The focus here is around the IPC and the statutory legislation related to planning matters.

•Taking advantage of the replacement/ refurbishment schedules of existing plants and infrastructure

Delivering the engineering challenges of building a low carbon energy system of this scale:

The government understands that meeting the physical and supply chain challenges of building new, reliable electrical generating capacity and other energy infrastructure at this scale, particularly in the face of likely international competition for these capabilities will be challenging.

The focus going forward will need to be on developing or upgrading infrastructure as it becomes necessary. As well as the electricity grid (transmission and distribution networks), this could include networks for transporting and storing captured carbon, systems for managing nuclear waste, hydrogen or electric vehicle fuelling/charging networks and community heat systems.

The Energy Mix
The government understands that the transition in matching evolving sources of demand for energy with new sources of supply in an efficient and practical mannerDeveloping technologies that will be needed to close the energy gap and meet the government commitments to reducing carbon emissions.

Future Consultations
• Government will develop a strategic roadmap to 2050 by spring 2010, working closely with industry and wider stakeholders.

•In autumn, the Committee on Climate Change will provide further analysis of the pathway through 2030 to 2050 The Government will work with the Committee, taking its analysis and recommendations into account when developing the roadmap to 2050.

•The Government is consulting on the detailed design and proposed tariff levels for ‘Feedin Tariffs’ alongside this Transition Plan.10 A household with a well-sited photovoltaic installation could receive over £800 plus bill savings of around £140 a year.


Click here to review and see all of the four documents released by the government today