The first year of capacity market has started. What does this mean for UK power supply?

The first year of capacity market has started. What does this mean for UK power supply?

This winter will be the first winter that promises the delivery of power through the Capacity Market (CM) scheme. The scheme which currently sits under the Electricity Market Reform (EMR) aims to increase UK power generation and capacity during peak hours and periods of system stress. Initially the CM scheme was to be introduced in October 2018, however due to tight supply over last winter (winter 16/17), the Government brought the delivery date forward by 1 year.

Production begins at two new gas fields off the coast of the Shetland Islands

Production begins at two new gas fields off the coast of the Shetland Islands

The first gas has been extracted from new gas fields, located just off the coast of the Shetland Islands. The two fields, named Edradour and Glenlivet are estimated to provide around 1.9 million barrels of oil and gas equivalent in 2018. This comes at a time when gas supply in the UK is below normal as the largest offshore storage site Rough is closed, leaving only cushion gas to be withdrawn over the next few years.

Energy Intensive Industries exemption scheme delayed until 2018

Energy Intensive Industries exemption scheme delayed until 2018

The department for Business Energy & Industrial Strategy has delayed the implementation of the Energy Intensive Industries (EII) exemption scheme once again, after the April 2017 expected start date was not met. The changes in Government, and discussion with the European Commission have caused the delay in enforcing the new legislation, however a new start date has been proposed for the 1st January 2018. This means that the BEIS will be required to have the new calculations, etc published and ready by the end of October, which has led many to believe the start date will be pushed back once again.

Hinkley Point C nuclear power station faces further delays

Hinkley Point C nuclear power station faces further delays

Construction on Hinkley Point C nuclear power station has only recently begun, however it has already been announced that costs will increase by around £1.5 billion, with a potential for a 15 month delay for completion at site. Hinkley Point C has caused much controversy over the last 10 years, and as such the news is quite unwelcome. Originally, the power station was to be powering the UK by this upcoming Christmas, however after recent announcements, power generation will not be taking place for another 10 years.

Centrica Storage Ltd permanently close offshore Rough facility

Centrica Storage Ltd permanently close offshore Rough facility

Centrica Storage Ltd (CSL) announced in June 2017 that their largest offshore gas storage facility ‘Rough’ would be permanently closed, after experiencing a year of issues while under repair and maintenance. The aging facility has been incapable of performing injection activity since June 2016, and as a result has not managed to store much gas, while withdrawals have been significantly low. CSL confirmed that the facility was no longer economic to run due to the extent and cost of repairs required.

Coal fired power in the UK continues to decrease, making way for renewable sources of electricity

Coal fired power in the UK continues to decrease, making way for renewable sources of electricity

Recent statistics from the department of Business Energy & Industrial Strategy have shown a rapid decline in the consumption of coal in the UK. Furthermore, on a global scale, the dependence on coal fired power has dropped over the last two years. This looks set to continue, as the UK announced plans to close all coal power stations by 2025. The new Government could change things, however for now this plan of action still remains.

What will be the future of UK gas storage?

What will be the future of UK gas storage?

The UK gas system is currently under some strain as Centrica Storage Ltd announced that their largest gas storage site, Rough, would be offline until April 2018. This was announced at the beginning of 2017, and since then, the facility has been withdrawing gas into the UK system and is now only 5% full. Injections into storage will be unavailable until April 2018, and so very little gas remains at the facility for next winter. Rough generally makes up around 70% of UK winter supply. In the absence of Rough, the UK has been heavily dependent on imported gas from Norway, as well as Liquefied Natural Gas from around the world.

UK solar levels reach record high

UK solar levels reach record high

On Friday 26th May 2017, the UK record level of solar generation was beaten as generation crept up to as high as 8.7GW at midday. The previous record high was noted only weeks before on 10th May at 8.48GW. This news shows how the UK has benefitted from its recent transition into the renewable sphere through funding into the Feed in Tariff, Renewable Obligation and Contracts for Difference schemes.

What will the general election and Brexit have in store for renewable projects in the UK?

What will the general election and Brexit have in store for renewable projects in the UK?

The upcoming UK general election is causing rifts in the energy industry. Political parties have differing agendas covering subjects from energy price plans and caps, to encouraging and discouraging renewable improvements and investments in the UK. There seems to be a lot of confusion about the latter at the minute. While Brexit is a huge concern, there is some uncertainty around whether the UK will maintain EU legislation regarding renewable, and low carbon schemes for the UK, or whether everything will be scrapped.

An end to the Renewable Obligation Scheme

An end to the Renewable Obligation Scheme

UK electricity contracts and tariffs are subjected to a lot of extra non-commodity costs. So much so that the build-up of a business electricity bill is ~45% commodity cost, and ~55% non-commodity cost. One of the largest non-commodity costs on power bills is the RO (Renewable Obligation) tax. This has been in place since 2012, and has moved the UK power network to include a mix of renewable, green energy sources. It has been announced that the RO scheme will now be closed, despite its general success.

Centrica Storage Limited announce to close the Rough gas storage facility until 2018

Centrica Storage Limited announce to close the Rough gas storage facility until 2018

Centrica Storage Ltd, owner of the UK’s largest gas storage site have announced its long term closure for further maintenance. The facility has been offline since June 2016 for gas injections into storage, and its restart has been delayed multiple times. The facility is able to supply 70% of the UK’s winter demand, however this is no longer the case.

Project Nexus - Gas Industry Changes

Project Nexus - Gas Industry Changes

Project Nexus is a huge industry change, and houses a multitude of different amendments to the current UK energy market, etc. From June 2017 there will be a huge change to the UK gas system, whereby Xoserve will be updating the central gas system for the UK. It is the biggest change since it's de-privatisation in the late 1990's. the changes are being driven by Ofgem, which means that this is a mandatory update.

Oil prices drop to four month lows as US output increases and OPEC's deal to cut production begins to falter

Oil prices drop to four month lows as US output increases and OPEC's deal to cut production begins to falter

Oil has taken a huge hit this week, with prices dropping as low as $50/bbl. This is despite OPEC’s efforts and plans to get the price of oil back up to $70/bbl by agreeing to cut production from 1st January 2017 for six months. It is now becoming apparent that this is not feasible in the time scales agreed. Plus the fact that US oil rigs are on the rise, crude stockpiles are increasing, and more and more shale oil is being drilled under Trumps Presidency. America’s production activity is totally counteracting everything OPEC have attempted to put into place. And now oils is trading at 4 month lows.