As the year draws to a close, we’ve seen a number of energy announcements made by the UK Government. Further afield, the 27th annual climate change summit – COP27 – recently took place in Sharm el-Sheikh. We have plenty to update you on, so here’s what you need to know:

The main announcement from COP27 was the agreement of a ‘loss and damage’ fund to support the most vulnerable countries harmed by the impacts of the climate crisis¹. The details of this are still yet to be decided but a committee is to make recommendations at COP28 in Dubai next year. In relation to this, the UN also launched a new action plan to create an early warning system to protect the global population from extreme weather events, which have increased in frequency, in part due to human-induced climate change.

Despite the positive focus on adaptation, there were key concerns that language around the phasing out of fossil fuels was weakened, with some arguing that the goal of limiting warming to 1.5°C is a goal that’s no longer alive. This has led businesses to try and step in, with hundreds of firms delivering a joint declaration of action to meeting 1.5°C, calling on nations to decide where they stand on raising ambitions in order to meet the target.

Meanwhile, UK Prime Minister Rishi Sunak, speaking in Sharm el-Sheikh, announced a new package of climate finance measures³. These included:

• tripling the climate adaptation fund to £1.5bn
• investing £90 million into supporting conservation projects in the Congo Basin – the world’s second-largest tropical forest
• committing £65 million to support indigenous and local forest communities.
• providing £65.5 million to the Department for Business, Energy and Industrial Strategy (BEIS)’s ‘Clean Energy Innovation Facility’, which backs low-carbon technologies in developing nations.

The annual climate conference comes after the recently published UN Environment Programme (UNEP) annual report, which highlighted the emissions gap between promised and needed emission reductions, finding the international community was falling “far short” of the Paris Agreement’s goal to limit global warming to 1.5°C above pre-industrial levels⁴.

Other key announcements included:

• US Climate representative John Kerry announced a new Energy Transition Accelerator (ETA) to finance low carbon energy deployment in developing countries whilst also decommissioning coal⁵.
• New recommendations to help businesses avoid greenwashing have been launched by a UN body⁶.
• The UN announced it is set to launch a new satellite system to detect methane hotspots – the Methane Alert and Response System (MARS)⁷.
• The Global Renewables Alliance was also launched, which combines industry bodies and organisations to accelerate the uptake of renewables. The Alliance will “act as a unified voice that represents renewables industries and technologies” such as solar, wind, hydropower, green hydrogen, geothermal and energy storage⁹.

Georgina from the Sustainability Team at Bryt Energy said “We’re pleased to see the various commitments made at COP27 to support global adaptation to the climate crisis, as well as the ground-breaking loss and damage fund that will go a long way to address the inequities of climate-related disasters. Although pledges to phase out fossil fuels were noticeably lacking, it is encouraging to see businesses still committed to limiting warming to 1.5°C, and at Bryt Energy we echo this, determined to do everything we can to mitigate further climate change.”

Back in the UK, National Grid ESO has awarded new grid stability contracts which could deliver nearly £15 billion in savings over 10 years from 2025¹⁰.

These new contracts have been allocated to six companies across England and Wales as part of a third phase of stability pathfinders to redefine how the network operates. Statkraft, our parent company and Europe’s largest generator of renewable energy, was awarded contracts to develop three further Greener Grid Parks. These will provide inertia to the grid and help replace coal or gas-powered turbines which are traditionally used to provide stability to the electricity system¹¹.

For more information on this exciting new project, click here.

Meanwhile, the UK Government has extended its windfall tax to include low carbon and renewable electricity generators, as well as oil and gas companies¹². The announcement in Chancellor Jeremy Hunt’s Autumn Statement introduced the tax of 45% which will be levied on “extraordinary returns” from low-carbon UK electricity generation. The Energy Generator Levy will come into force on January 1st 2023 and comes alongside an expansion and extension to the Energy Profits Levy – the oil and gas windfall tax announced in May; This will be increased from 25% to 35% from January 1st 2023, and will now end in 2028, three years later than originally planned.

As expected, there has been criticism of this new tax, with trade body Renewable UK highlighting that “Unlike in oil and gas (Energy Profits Levy), companies which are making significant investments in renewables will get no tax relief and will be hit by a higher windfall rate”¹³, whilst Solar Energy UK argue that the levy could slow investment in renewable energy¹⁴.

In other news, the UK’s ‘renewable energy and clean tech sector’ is projected to more than double in size by 2035. That’s according to The Association For Renewable Energy and Clean Technology (REA)’s annual Review22 report¹⁶. It projects the UK sector will increase from £22 billion to £46 billion in that time and employ more than 210,000 people, up from 140,000 currently. The report explains the renewable sector showed “great resilience and ingenuity” following the Covid-19 pandemic, with the forecasts showing promising signs for the future.

UK businesses have received a first look at what corporate net zero transition plans should include in order for them to be considered the “gold standard”¹⁵. The UK’s Transition Plan Taskforce published its first proposals for the guidelines, which will include advice on when, where and how to transition to net zero and avoid greenwashing. Market participants and other stakeholders have been asked to provide comments which will inform the final version of the guidelines. The consultation survey will close on the 28^th of February 2023 and you can have your say here.

• The Greater London Assembly has announced it will go ahead with plans to expand the Ultra-Low Emissions Zone (ULEZ) to cover all Greater London. The move is part of plans to reach net zero carbon emissions by 2030¹⁷. The ULEZ expansion will come into place from August 2023.
• Europe’s largest battery energy storage facility has come online¹⁸. The 98MW/196MWh storage project “Pillswood”, just outside of Hull, is located at the connection point for the first two phases of the Dogger Bank wind farm – which, when completed, will be the world’s largest offshore wind farm. When the wind farm produces more electricity than the grid needs, batteries can store the excess energy and export it back to the grid during times of high demand. This project highlights the important relationship between renewables and storage technologies as the UK transitions to a net zero grid.
• The UK Government has announced that £32.9 million in funding has been awarded to projects across the country to develop new long duration energy storage technologies¹⁹. The competition aims to support innovative new energy storage technologies that will increase the UK’s energy independence capabilities and play a key role in supporting a low carbon energy system.

If you have any questions on how any of the updates might affect your business, our team of experts is on hand to answer them. You can get in touch with us on 0330 053 8620 or at heretohelp@brytenergy.co.uk.