The Head of the United Nations Environment Programme (UNEP) recently warned that it’s ‘crunch time’ for tackling climate change – we have no more time for delays¹. In November’s Bryt Insight, we explore some ways in which this crucial period for climate action is being progressed by policymakers. These include the UK Government’s extension of the Climate Change Agreements (CCA) scheme, as well as promising developments in the UK’s floating wind and renewable energy storage sectors. 

In the lead up to COP29, we also discuss the International Energy Agency’s outlook on upcoming energy trends and implications for the future of renewables. 

Here’s what you need to know this month: 

As mentioned in last month’s Bryt Insight, there was a reduced availability of supply as we moved into October. The planned outages at Heysham and Hartlepool nuclear power stations were accompanied by unplanned outages from other nuclear fleets across the UK and France, resulting in reduced capacity through the interconnectors. This was coupled with increased demand in the UK, with shorter days leading to higher energy usage. This caused the short-term wholesale electricity prices to be elevated at the start of the month and the first ‘system warning’ of a lack of capacity from the National Energy System Operator (NESO) in two years, although this was cancelled a few hours later.  

As we moved through to the middle of the month, prices were tempered by higher wind generation and increased flows through the interconnectors from Belgium and the Netherlands, both contributing to a better availability of supply.  

The second half of the month saw wind and nuclear generation in the UK and across Europe drop due to unplanned outages, as did the interconnector imports into the UK. This meant that gas-fired power stations had to generate energy for the grid. With gas generation more expensive than other sources, this therefore increased prices once more. 

Long-term wholesale electricity prices have been volatile in October, with a number of peaks and troughs caused by the tensions in the Middle East, as well as increases in carbon, coal and gas prices. Energy prices can be impacted by the unpredictability of geopolitical conflict, which can cause disruptions to oil production and transport. This ripples outwards to gas and energy prices due to the possibility of supply reductions or restrictions. 

However, the last week of October saw electricity prices fall, as the market removed some of the risk premium in the prices as energy supplies weren’t impacted as anticipated. 

The overall price for the month of October is higher compared to what was seen in September. Delays announced to the start-up of Dogger Bank Offshore wind farm (delayed from the first half of 2025 to the second half of 2025) will also have affected longer-term prices, due to deferred energy generation from the wind farm. 

Looking forwards 

Moving into November, a drier and less windy start to the month in the UK is giving rise to the possibility of short-term volatility, but it is unlikely that this will impact the stability of longer-term prices. 

Looking forward into the rest of the winter, gas storage levels across Europe are above the 90% capacity target that specific countries agreed for the 1st November, and the UK has over 80% in its storage facilities, with two more cargos of liquefied natural gas (LNG) arriving in early November. Also, the UK is thought to have a 5.2GW power supply buffer this winter – the highest margin in five years – according to NESO. This forecast assumes peak demand during a cold spell averaging nearly 60GW. 

The recent US election campaign is also having a dampening effect on the world economy and oil prices in particular, with uncertainty around the elected party’s future policies creating delayed decisions regarding investments in certain countries, due to hesitancy over future relations. Wider issues in the Middle East will also continue to contribute to market volatility in the long term. 

Renewable Energy Guarantees of Origin (REGO) certificate prices continued to fall this month. Following on from last month’s reductions, they are now down to the lowest level seen since April 2022, due to the healthy availability of these certificates. 

The International Energy Agency (IEA) has published the newest editions of two of their annual energy reports, the World Energy Outlook and Renewables reports. 

The World Energy Outlook 2024 

The World Energy Outlook 2024 report identifies and analyses trends in energy demand and supply and explores the implications for carbon emissions and global economies². This year’s report predicts that solar power electricity generation will quadruple globally by 2030, overtaking all other sources of electricity by 2033 and causing coal-power to plummet. In terms of demand, incredibly, due to increasing electrification and the growth of AI, global energy demand will increase annually by the equivalent of Japan’s total electricity demand.

The report also warns that, by 2030, the world is only on track to decrease emissions to 4% less than in 2023, which will lead to warming that is 2.4^◦C above pre-industrial levels. This exceeds the 1.5^◦C threshold that experts believe would limit the more extreme impacts of climate change. 

Renewables 2024 

The IEA’s Renewables 2024 report focuses specifically on the deployment of renewable energy in electricity, heat and transport, and outlines the barriers and challenges they face³. Here are some of the report’s key findings and forecasts: 

• Global energy-related carbon emissions are predicted to peak by 2030 before beginning to decrease, and, by the same year, renewable capacity will grow 2.7-fold from 2022. However, this is just short of the COP28 goal to triple renewables. 
• Between 2024-2030, more than 5,500GW of renewable power capacity is predicted to be added globally. 
• China will be adding the greatest share of renewables globally, providing almost 60% of global capacity between 2024-2030. 
• Impressively, solar energy will account for 80% of the growth in renewable energy capacity, whilst the rate of expansion of wind energy capacity will also double between 2024-2030. 
• By 2030, the report predicts that 70 countries will reach or surpass their renewable energy goals. 

As the Renewables 2024 report asserts, for almost every country, wind and solar are already the cheapest choices for new electricity generation. The statistics about the future growth of renewables is promising, but it’s clear we also have a lot of work to do to meet the trebling target for renewables set at COP28. 

You can read the IEA’s World Energy Outlook 2024 report, here, and the Renewables 2024 report, here. 

It has been confirmed that the Climate Change Agreements (CCA) scheme will be extended by six years, according to the Department for Energy Security and Net Zero (DESNZ)⁴. Launched in 2001, the CCA scheme reduces the rate of Climate Change Levy (CCL) paid by businesses in energy-intensive sectors if they meet customised decarbonisation and energy efficiency targets. More than 2,600 companies in over 50 industries currently participate in the scheme, and the expected savings for these participating businesses is approximately £310 million annually. In addition to saving money through reduced CCLs, the businesses also have lower bills from becoming more energy efficient. 

This extension was announced following a consultation, with the aim of incentivising longer-term decarbonisation measures, rather than quick solutions. It’s encouraging to see that energy-intensive industries will continue to be supported financially as they work to minimise their carbon emissions. 

To read more about the updates to the CCA scheme, visit here. 

A new scheme has been announced by the UK Government’s Department for Net Zero and Energy Security (DESNZ), with the aim of encouraging investment in technologies for renewable energy storage. Through the new Long Duration Energy Storage (LDES) investment support scheme, the Government has committed to remove long-established barriers that have previously hindered the construction of new storage capacity. It is hoped that the increased investment will lead to more jobs, greater UK energy independence, and create billions of pounds in savings⁵. 

LDES technologies are energy storage mechanisms which are designed to store and release renewable electricity over a time of at least six hours. These include technologies such as pumped hydro storage, which generates renewable electricity by releasing stored water through a hydro turbine, and solar battery storage, which stores and releases electricity produced from solar panels. 

Previously, the production of LDES technology has suffered due to heavy upfront costs and a lack of revenue guarantees to encourage long-term investments. The new scheme, starting in 2025, will use cap-and-floor mechanisms to tackle this issue. This will guarantee revenues above a minimum price (i.e. the ‘floor), creating a level of security for investors, while also limiting costs from rising above a certain amount (the ‘cap’), which will also protect consumers.  

Renewable energy storage is necessary to provide stability to a grid powered by renewables, so it’s promising to see measures like these that will attract investment into this sector. 

To learn more about the Government’s new scheme, visit here. 

UK businesses invited to have their say on the Government’s new industrial strategy 

In October, the UK Government revealed a first look at plans for a ten-year industrial strategy to help shape the future of the UK’s business landscape, focusing on renewable energy industries amongst other ‘growth-driving’ sectors⁶. The industrial strategy will outline a plan to deliver certainty and security for businesses, tackle barriers to growth, and in turn drive investment in high growth sectors. 

The Government are now asking for businesses to lend their experience and evidence by providing feedback, helping to shape an industrial strategy that creates an environment that prioritises businesses and workers. Businesses can have their say ahead of the final strategy publication in early 2025 and are being encouraged to respond to the drafted plans by November 25th, 2024. 

You can provide your feedback on the Government’s plans, here. 

New report suggests UK MPs are supportive of net zero measures, but misinformation persists  

MP enthusiasm has grown in regard to the importance of reaching the target of net zero by 2050, according to recent polling by YouGov in collaboration with Climate Barometer⁷. The research shows that 94% of MPs support the UK Government’s target, compared to 76% of those who supported it in April of this year, just before the last general election. Additionally, the last poll saw only 43% of MPs answer that renewable energy was the best opportunity for growth, but this has now extended hugely to 78%. 

This shift in attitude is positive, but YouGov’s polling also shows that many MPs hold inaccurate views about low-carbon technologies. For example, 16% of MPs thought that electric vehicles (EVs) were more likely to set fire than petrol cars, when the opposite is in fact true⁸. Nevertheless, the good news is that there are resources to combat this misinformation – the recent Parliamentarians’ Guide to Climate Change, published by Peers for the Planet and the University of Exeter, provides explanations and knowledge for MPs around climate change and nature emergencies⁹. 

Just as MPs are generally supportive of net zero measures, according to UK100’s report Local Net Zero 2.0: The Moment to Deliver, the UK’s local authorities are also enthusiastic to tackle climate change¹⁰. 88% of participants said that they would welcome obligatory duties to prioritise climate action, as long as it came with the necessary funding and power to accomplish their goals. 

UK’s floating wind is ranked second globally 

A recent report from RenewableUK reveals that the UK ranks second for floating wind energy capacity across the globe¹¹. Norway was ranked first, with 94MW of installed floating offshore wind capacity, and the UK was not far behind, at 78MW from two offshore projects.  

The report relays that as many as 97,000 people could be employed in the UK’s floating wind industry by 2050, and that floating wind could provide up to a third of the UK’s offshore wind capacity by this year, providing £47 billion to the UK economy. In addition, the cost of creating floating wind farms could decrease to under £100 per MWh by 2030. 

With the report highlighting that floating wind could be the UK’s ‘industrial opportunity of the century’, we’re glad to see the UK embracing the full potential of floating wind energy. 

UK Contracts for Difference (CfD) auction is to be revised to support ‘repowering’ projects 

It has been announced that ‘repowering’ projects will now be now eligible to be included in the UK Government’s Contracts for Difference (CfD) auction, a scheme which provides funding to renewable energy generator projects¹². ‘Repowering’ projects refers to projects that aim to modernise and renovate wind farms that are reaching the end of their initial working life. 

The Department for Energy Security and Net Zero (DESNZ) has detailed that the change will come into effect in the next round of CfD funding, allowing the opportunity for funding to support the replacement of older turbines in order to keep the wind farms operational. Assets applying for ‘repowering’ funding must be at the end of their initial operational life and will not be required to retain their current capacity. 

The first space-based solar power plant to deliver energy to Iceland by 2030 

UK firm Space Solar, alongside Transition Labs, have announced plans to provide Icelandic energy and utility company Reykjavik Energy with solar energy from space by 2030¹³. This first ever solar plant based in space is set to be operational by 2030 and will provide 30MW of power, orbiting Earth and transmitting energy wirelessly to the ground. With 24/7 energy unaffected by weather or time of day and costs similar to ground-based renewable electricity, innovation in space energy could overcome barriers seen on the ground. 

As part of the Statkraft Group, this month we are sharing a few of their key updates: 

Statkraft to prioritise investments to sharpen strategy 

Statkraft have recently announced plans to focus their investments on Norway, wider Europe, and South America, in order to strengthen the scale of projects in these regions, build competitiveness and prioritise creating new renewable projects¹⁴. This includes prioritising: 

• Norwegian hydropower. 
• Solar, wind and battery storage growth in the Nordic region, Europe and South America (increasing the delivery rate to 2-2.5GW annually from 2026). 
• Building and developing offshore wind farms in Northern Europe. 
• Pursuing a leading position as a developer of green hydrogen. 

Alongside this, Statkraft have announced an updated organisation and corporate management, which will be effective from 1st January 2025. This includes a new business area, Technology and Project Delivery, which will develop best-practice safety, support operations and maintenance standards, and will be responsible for delivering cost-effective services and products. 

Statkraft’s wind farm community fund supports local projects 

Statkraft’s Alltwalis Wind Farm community benefit fund provided £107,000 of community funding in 2023, supporting local projects such as social enterprises, schools, sports clubs and voluntary organisations¹⁵. The wind farm, situated in Carmarthenshire, South Wales, became operational in 2009 and provides renewable energy to the equivalent of 16,500 homes. The fund is managed by representatives from the local community, who assess applications quarterly from organisations and groups in the Llanfihangel-ar-Arth area. 

Statkraft nominated for ‘Best Engagement’ at Scottish Green Energy Awards 

Statkraft’s work on the Loch na Cathrach Pumped Storage Hydro project, which is located near Loch Ness, has been recognised through a short-listed nomination for ‘Best Engagement’ at the Scottish Green Energy Awards¹⁶. Statkraft acquired the 450MW project in late 2023. Since then, Statkraft have worked to fund a local Community Action Plan and commission a Supply Chain Research report to highlight opportunities for local businesses to work with the Loch na Cathrach project. They also have plans to deliver community benefit funds in the future. The nomination for ‘Best Engagement’ is recognition of this hard work and care. 

Winners of the Scottish Green Energy Awards will be announced on 5th December 2024. 

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.