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Professional Energy Services publishes weekly UK energy industry news. We keep you up to date on the latest energy market analysis, focusing on the gas, power, and oil markets, changes to legalisation, and industry updates such as noticeable company activities, and green news.

PES Energy News – 24 April 2023

| Alex Dovey |

Table of contents:

01 – Will the UK business energy bill scheme cost a third of Treasury estimate? – By the middle of March, energy suppliers received £5.9 billion from the Energy Bills Relief Scheme, significantly lower than the £18.4 billion forecasted cost

02 – “Your reputation is at stake”: Ofgem issues warning to energy suppliers – The Chief Executive of Ofgem has warned that the regulator will take strong action against companies that fail to follow the rules on PPM installations

03 – UK looks to shock energy sector with major reform – The government considers rewarding green energy projects for “non-price factors” to drive investment and improve energy security

04 – ENA’s new action plan speeds up UK’s green grid connections – The Energy Networks Association has released a three- step plan as 69GW of new connection requests were made in the year up to October

05 – Gravity’s pull in the energy market – Scottish firm Gravitricity has partnered with a US construction group to seek funds jointly for renewable energy schemes, including those at disused mines




01 – Will the UK business energy bill scheme cost a third of Treasury estimate?

The UK Government’s winter energy support scheme for businesses cost only a third of what the Treasury estimated.

Government data shows that until mid-March, UK energy suppliers received a total of £5.9 billion from the Energy Bill Relief Scheme (EBRS), significantly lower than the £18.4 billion forecasted cost.

In November 2022, the EBRS was estimated to cost £18 billion by the Office for Budget Responsibility (OBR), but the OBR revised the figure down to £7.3 billion in March 2023 due to lower-than-expected wholesale prices during the covered period.


Your_reputation_at_stake_Ofgem_issues_warning_to_energy_suppliers02 – “Your reputation is at stake”: Ofgem issues warning to energy suppliers

Jonathan Brearley, the Chief Executive Officer of Ofgem, has warned energy suppliers that they must follow the rules around prepayment meter installations or face the risk of damaging their reputation.

In an interview with BBC Radio 4, Mr Brearley said: “I do have a message today for the suppliers themselves. Your reputation is on the line. There has been deep concern raised about the practices that have been seen over the past few months, and indeed going back into history.”

Brearly added that the regulator is closely monitoring the situation and will take action against any company that does not comply with the regulations.

The boss of Ofgem said: “And if you do not improve what you do, quite frankly, there will be further rules and regulations, which will be against your commercial interest, but on top of that, Ofgem will have close monitoring of what’s happening, and that’s why it’s really critical we have the video camera evidence so we can see what people are doing and we can call that in and have a look at it if we need to.

“But equally, we have smart meters installed so we can see that if you have installed a prepayment meter, particularly for that second group of customers who need that deep welfare check and they consistently coming off the supply, then you have not done your job properly and we will respond to that.”



03 – UK looks to shock energy sector with major reform

The UK Government is considering reforms to the Contracts for Difference (CfD) scheme, which provides support for low carbon electricity projects, such as offshore wind and solar.

The proposed changes would reward applicants for including “non-price factors”, such as supply chain sustainability, skills gaps and innovation, in their bids.

The aim is to encourage investment in the renewable energy sector and improve the country’s energy security.

The reforms are part of the government’s plans to create a more secure energy future and support green industries and high-quality jobs.

The government will launch a consultation on more detailed proposals if the changes are deemed effective.

The Minister of State for Energy Security and Net Zero, Graham Stuart, has lauded the success of the CfD scheme in supporting low carbon electricity generation in Britain while simultaneously driving down costs for consumers.

In a bid to further enhance the scheme’s efficacy and maximise its potential, Stuart has suggested introducing non-price factors, which will boost energy security and encourage renewable energy developers to invest in supply chains and innovation, leading to a stronger sector and bolstering the country’s economy.

Stuart believes this reform will facilitate the growth of the renewable energy supply chain, thereby accelerating the energy transition plans to power more of Britain from within.



04 – ENA’s new action plan speeds up UK’s green grid connections

he Energy Networks Association (ENA) has unveiled a three-step plan to expedite grid connections, in response to an unprecedented number of new applications for connection, as the UK races towards net zero.

Since 1992, almost 50GW of renewable electricity projects have been connected to Britain’s electricity networks.

Looking ahead, network operators plan to mobilise over £22 billion of investment into the UK’s electricity distribution infrastructure in the next few years to help support everyone’s net zero transition.

However, the existing connections model was designed for an older generation of technology when far fewer projects with greater certainty sought to connect.

Today, many of the projects seeking connection are not yet “connection ready” or do not have final investment decisions in place.

ENA’s three immediate priority areas include promoting mature projects that are closer to delivery, improving interaction between transmission and distribution networks, and offering greater flexibility for storage customers through new contractual options.

These steps complement National Grid ESO’s Five Point Plan and ongoing work with transmission network operators on Connections Reform.



05 – Gravity’s pull in the energy market

Energy storage company Gravitricity is set to expand into the US market by partnering with IEA Infrastructure Construction, a major American construction group.

The move follows the US Government’s allocation of millions of dollars in funding for energy projects at former mines.

The partners have signed an agreement to jointly seek funds for renewable energy schemes, including those at disused mines.

The Biden Administration recently made $450 million (£363m) available for clean energy projects at the site of current or former coal mines, as part of efforts to combat climate change.



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