In the wake of the 29^th Conference of the Parties (COP29), December’s edition of Bryt Insight covers some of the climate talk’s key outcomes and the UK’s announcements, as well as news about the repurposing of the National Grid Energy System Operator’s (NESO) Demand Flexibility Service (DFS).

We also look at some exciting updates in the UK’s decarbonisation journey, such as the potential for electrification in industrial sectors, growth in the share of renewable energy on the UK’s electricity grid, and a milestone in innovative wind turbine recycling.

Here’s what you need to know this month:

Over the last quarter, there has been a number of peaks and troughs in wholesale electricity prices, but overall costs have increased. The conflicts between Russia and Ukraine, and in the Middle East, have been the main driver for this, but rising gas costs are also playing a significant role, especially in the last few weeks.

UK wholesale electricity prices climbed as we entered November, with lower temperatures increasing demand for heat, whilst lower wind generation and multiple outages reduced availability of supply. Wind generation fell by 50% in the first two weeks of November, compared to the last two weeks of October. In addition, multiple outages on the European interconnectors restricted imports, meaning that gas had to be used to generate electricity. With gas generation being more expensive than other sources, this had a significant impact on overall prices.

Prices in the second half of the month were slightly more volatile, with wind generation increasing and Storm Bert helping to triple wind generation at the end of the month. As a result, the 24^th and 25^th November saw some very low prices during the day, and even negative day-ahead prices overnight, thanks to the increased wind output. However, the UK’s nuclear generation was reduced due to being offline for maintenance, with six out of ten reactors down, which meant that the increased wind hasn’t been able to fully temper the rising prices.

This use of gas for electricity generation, and the lack of Liquified Natural Gas (LNG) cargo imports, has led to the early use of gas from the storage facilities across all of Europe. The month started with gas storage at 95% across Europe. This has now fallen to 85%, which is 10% lower than this time last year. The UK’s limited storage looks more depleted, with sites less than half full. LNG imports into the UK are currently low due to competition with the Asian Markets, specifically Japan and Korea, for the cargoes. This competition is reducing the availability of gas, forcing gas prices up and, in turn, increasing electricity prices.

The long-term prices for wholesale electricity in the UK have followed the short-term prices up through November, with sharp rises at the start of the month and more volatility towards the end. This is being driven by higher gas prices, the lack of LNG cargoes reaching Europe, and the cold weather across Europe, which led to more energy demand for heating and, as a result, higher prices.

Wholesale electricity prices are looking as if they will continue to rise in the short term, with any long-term electricity price reductions appearing unlikely. This is due to:

• gas supply issues, such as competing demand for LNG cargoes, the early use of stored gas, and the reduction of gas coming into Europe by means of the pipeline through Ukraine
• a colder, earlier winter, caused by La Niña – the wetter half of the major ocean cycle in the world’s climate system located in the Pacific
• strikes from French nuclear power workers, reducing electricity available for importing into the UK
• the number of outages from nuclear power plants and European interconnectors

Political instability and escalating conflicts have been having an effect on prices throughout the year and, with these ongoing, future reverberations are hard to predict.

For the current 2024/2025 compliance year, REGO prices have finished in November at almost the same price as they started this month. However, future years have all continued the reduction that we have seen in the last few months, albeit at a slower pace than seen previously.

This year’s climate talks – the 29^th Conference of the Parties (COP29) – concluded in Baku, Azerbaijan, with many feeling there was a mix of progress and disappointment¹.

The agreement on a ‘new collective quantified goal’ on climate finance is a key outcome of this year’s COP. Developed countries committed to ‘taking the lead’ on mobilising at least $300 billion per year by 2035 to support developing countries in their climate mitigation and adaptation efforts. Although this total represents a tripling of the climate finance agreement from 2009 (not adjusted for inflation however), developing countries had previously suggested a total of $1.3 trillion would be needed to decarbonise. Without an agreement to raise the necessary funds, developing countries left Baku disappointed.

COP29 also delivered progress on Article 6 of the Paris Agreement, which establishes the rules for international carbon markets. Specifically, this included talks on the environmental integrity of carbon credits – a way to measure and trade carbon removals or avoidance – to make sure that carbon is stored permanently and ensuring transparency around disclosing the traded emissions. Whilst this is a step forward in enabling another form of climate mitigation finance, many argue that not enough time was given to adequately discuss the details, weakening the overall outcome.

Finally, many have deemed that one of the major failings of COP29 was the lack of clear consensus on how to achieve the phasing out of fossil fuels that was agreed last year at COP28. Instead, this decision was pushed back to appear on the agenda at next year’s COP30, which will be held in Brazil.

UK announcements

Despite the general sense of disappointment around the outcomes of COP29 at an international level, the UK had multiple positive announcements at COP29 and the G20 summit:

• The UK announced its updated Nationally Determined Contribution (NDC), which follows the guidance from Government advisors; the Climate Change Committee. NDC’s are climate targets and mitigation actions each country submits every five years as part of the Paris Agreement. The UK’s updated NDC now aims to cut its emissions to 81% below 1990 levels by 2035.
• The UK became new members of a new coalition alongside 16 member countries, which aims to phase out fossil fuel subsidies².
• Launched at the G20 summit, the Global Clean Power Alliance was set up by the UK, and aims to ensure countries meet the commitments to triple renewable energy capacity and double the global rate of energy efficiency improvements. Twelve countries have joined the UK on this initiative³.

Despite the challenges seen at COP29, the UK is pushing forward with its decarbonisation targets and inviting others to follow suit. At Bryt Energy, we believe climate change has no border, and therefore, it will be crucial to continue collaborating at all levels to increase the scale of action, with COP30 being another opportunity to build on progress and address the challenges yet to be agreed.

You can find out more about the outcomes of COP29, here.

A new, year-round Demand Flexibility Service (DFS)* has been launched by the National Grid Energy System Operator (NESO). The service has been repurposed from its original establishment as a winter contingency service during the energy crisis, which functioned to balance the grid during times of high demand. Through the DFS, suppliers can incentivise customers to reduce demand on the grid by shifting their electricity usage to off-peak times, when electricity costs are generally lower and the grid is less carbon-intensive. This helps to reduce prices for customers whilst balancing the electricity grid.

The DFS has previously been successful during its winter operational periods – in winter 2022/2023, 1.6 million households and businesses saved more than 3,300MWh, and last winter, this grew to 2.6 million participants, saving more than 3,700MWh. The changes NESO will make to the DFS will mean that it will be interacting with other markets, such as the Capacity Market and regional services offered by Distribution Network Operators, working together to increase customer flexibility. These changes mean that it will be able to compete with power generators, such as wind farms and gas power stations.

NESO have now announced that the DFS will be available throughout the year. Greater demand flexibility will be crucial in supporting the integration of more renewable electricity into the UK’s grid mix, and it’s encouraging to see services like DFS continue to support businesses in contributing towards a net zero system.

The new DFS went live on November 27^th. To find out more about the changes to the service, visit here⁴.

UK Government identifies opportunities for electrification in UK industry

The Department for Energy Security and Net Zero’s (DESNZ) new study, titled Future Opportunities for Electrification to Decarbonise UK Industry⁵, focuses on identifying how the Government can help hard-to-abate, emission-heavy sectors in UK industry decarbonise through electrification. This includes recognising the barriers to electrification, exploring solutions, and explaining opportunities for electrification in industries such as cement, glass, paper, food and drinks.

After concluding that the emissions in these sectors were primarily produced for heat generation purposes, the study explores the electrification potential of seven major industrial heating processes, including electric boilers, high temperature heat pumps, and microwave technology. However, the report highlights that a lack of knowledge, the cost of electricity, upfront costs and the existing grid infrastructure were all barriers to electrification, which must be addressed if the electrification of UK industry is to unlock its potential.

The potential of recycling critical minerals

The International Energy Agency (IEA) has released a report on the potential of recycling to significantly reduce the mining of critical minerals, such as copper, lithium, nickel, cobalt and rare earths. The report, titled Recycling of Critical Minerals: strategies to scale up recycling and urban mining⁶, is targeted towards policymakers across the globe, as well as investors and recyclers.

Its findings highlight that developing new policies and facilities to support critical mineral recycling would help reduce strains on supply and ensure sustainability, through maintaining a secondary supply source that would limit reliance on new mines. Increased recycling of minerals would, by 2050, reduce the need for new mines by 40% for copper and cobalt, and by 25% for lithium and nickel. Notably, the report finds that if all existing and announced policies regarding recycling were put into effect, critical mineral recycling’s market value would climb to $200 billion globally by 2050.

As the net zero energy transition requires these materials, such as for batteries and energy storage, better recycling is critical to ensuring we can use these minerals in a more ethical, potentially profitable and secure way. Recycling critical minerals can have a plethora of positive effects – from reducing reliance on foreign imports, thereby increasing energy security by lessening our vulnerability to fluctuations in prices, to limiting the social and environmental impacts of mining.

NESO confirms that a decarbonised grid is achievable by 2030

In the National Energy System Operator’s (NESO) Clean Power 2030 report⁷, NESO affirms to the UK Government that it is feasible to reach a completely decarbonised energy system by 2030, and outlines a framework for achieving this.

In order to support the Government’s 2030 decarbonisation targets the report highlights that renewable energy capacity must expand. Offshore and onshore wind capacity must increase from the current capacity of 15 gigawatts (GW) to between 28-35GW and 13GW to 27GW, respectively. Additionally, solar power capacity must triple from 15GW to 47GW. The report also stressed the importance of technologies like carbon capture and storage (CCS) and low-carbon hydrogen generation, in decarbonising hard-to-abate industries. In order to maintain system stability and ensure cost efficiency during this process, new network infrastructure must be upgraded and constructed at a rate that is four times as quick as the past decade.

It’s motivating to see the details of how the UK can indeed achieve a decarbonised energy system by 2030 – and the pathway to get there.

UK renewable energy industry’s share in electricity mix rises to 47%

The annual ‘REview’ report has been published by the Association for Renewable Energy and Clean Technology (REA), focusing on the current position of the UK’s renewable energy and low-carbon technology sectors. The report reveals that:

• Renewable energy’s share in the UK’s electricity mix has dramatically increased from 15% ten years ago, to 47% now.
• Across the UK, renewable energy now meets ~10% of demand for UK’s heating and cooling, and 6% for transport demands, which is a sign of progression towards the electrification of the UK’s heat and transport industries.
• The renewable energy sector now provides employment for 143,000 people, with solar photovoltaic making up 25% of these jobs.

In its findings, the report also declares that, in 2022/2023, the sector grew 6% in just one year, to result in a value of £24.38 billion. If the industry’s growth follows as projected, this should lead to a sector worth more than £41 billion by 2035.

To read more from the report, visit here⁸.

Myth-busting renewable energy guide for MPs

Regen – a non-profit organisation which promotes renewable energy and energy efficiency across the UK – has developed and released a myth-busting guide. The guide aims to assist MPs in responding to the public’s concerns and questions about renewable energy, reducing misinformation and helping to push forward the energy transition.

The publication of Onshore renewable energy: common myths⁹ follows the findings of last month’s poll from YouGov, which highlighted that UK MPs were supportive about net zero, but also misinformed about some kinds of low-carbon technologies. The guide addresses these concerns, tackling myths such as:

• the idea that solar energy only works in the summer – the guide highlights that solar produces power year-round.
• the belief that the public are opposed to onshore wind, while the reality is that 77% of the UK public supports onshore wind.
• the idea that hydrogen can replace gas heating, which the guide points out that hydrogen is not the best option for home heating.

The information the guide presents aims to demystify renewable energy for policymakers, ensuring that they can communicate the benefits of renewable energy to the public in a way that best resonates.

Wind turbine blade is given new life through recycling

A 44-metre long damaged turbine blade from Kentish Flats Offshore Wind Farm has been recycled by Plaswire, enabling it to be further used in manufacturing and construction¹⁰. While 90% of a wind turbine is recyclable, turbine blades are made up of glass-fibre reinforced composite materials, meaning that recycling them can be more difficult. The innovative technology used in the recycling of this turbine blade represents a milestone in improving end-of-life recycling for wind turbines, and having the process here in the UK also reduces the transport-related emissions of relying on recycling infrastructure elsewhere.

To find out more about the recycling of wind turbine blades, along with the benefits and considerations of wind power, you can read our Fuel Mix blog, here.

As part of the Statkraft Group, this month we are sharing some of their recent updates:

Statkraft win ‘Best Engagement’ award at the Scottish Green Energy Awards

Following on from last month’s edition of Bryt Insight about their nomination, Statkraft have announced that they have been awarded the ‘Best Engagement’ award at the Scottish Green Energy Awards, for their involvement with the Loch na Cathrach Pumped Storage Hydro project! This is the result of their hard work in funding a local Community Action Plan, commissioning a Supply Chain Research report to highlight opportunities for local businesses to work with the project, and their future plans to deliver community benefit funds.

To read more about Statkraft’s nomination, you can visit Statkraft’s website, here¹¹.

Statkraft hosted their annual Energy Transition and Trading Conference

With over 200 attendees from across the industry, last month, Statkraft hosted their annual Energy Transition and Trading Conference in London, to discuss the issues and opportunities the energy transition presents.

Chaired by Statkraft team experts alongside contributions from key industry players, the conference saw debate about various topics, such as:

• the opportunities and challenges facing green hydrogen
• the future progression of energy storage and flexibility
• the role of Corporate Power Purchase Agreements (CPPAs) in the British market
• the major obstacles facing the energy industry

Communication and collaboration are vital in tackling these key issues in the UK’s journey to net zero, and it is conferences like these that allow for important voices in the industry to come together.

To read more about the Energy Transition and Trading Conference, visit Statkraft’s website, here¹².

Major milestone hit in Statkraft’s largest battery scheme

Statkraft’s Thornton Greener Grid Park has seen the arrival of the first of 620 battery units to be installed on site, marking a major milestone in Statkraft’s 200MW two-hour Battery Energy Storage System (BESS) scheme. Thornton’s Greener Grid Park, located in East Yorkshire, is one part of the wider scheme, which also includes Soay Solar Farm. The scheme will substantially contribute towards the UK’s renewable infrastructure and has received £150 million investment.

Greener Grid Parks (GGPs) are essential to the creation of a stable electricity grid powered by renewables. Once operational, Thornton Greener Grid Park will enable energy from renewable sources to be stored during times of low demand and dispatched at times of peak electricity demand. GGPs like Thornton Greener Grid Park will thereby help us create a grid which is powered by renewables.

Thornton Greener Grid Park will be operational in autumn of 2025. To find out more, visit here¹³.

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.