This past month has seen some key milestones in the net zero energy transition, as the UK’s final coal power plant was shut down and the UK Government acquired the National Grid’s Electricity System Operator (ESO), transferring it to public ownership. We also saw some encouraging indicators for the future, with survey results emphasising a keenness from many businesses to decarbonise and reach their sustainability goals, but also highlighting their most significant challenges.

From key energy market updates to recent renewable innovations, here’s what you need to know this month:

Wholesale electricity prices were on a downward trend over the last month and, despite some volatility in the second half of the month, fell compared to August.

Initial concerns over availability of gas in Europe, caused by a Norwegian gas field going offline for maintenance and Ukraine’s counter invasion of Russia, disappeared when neither events disrupted the availability of supply. Lower demand for gas across Europe and increased French nuclear output also helped increase availability of supply and reduce wholesale electricity prices.

In the UK, low wind generation meant that gas-fired generation had to be used to meet demand at the start of the month. Due to the typically higher costs of gas, this would normally cause an increase in wholesale electricity prices (which are still largely affected by gas prices). However, because of the reduction in gas prices, electricity prices continued to fall.

Following the steady reduction in wholesale electricity prices at the start of the September, there has been much more volatility in the second half of the month. There were several sharp spikes in prices, especially on the day-ahead markets, when gas generation supplied most of the grid’s electricity at times of high demand, due to low renewable energy output. However, once wind generation increased in the last few days of September, pricing levels returned to more stable levels.

Looking ahead, prices may climb at the start of October due to reduced availability of supply, with Heysham and Hartlepool nuclear power stations being shut for maintenance until the 7^th and 13^th October respectively.

Prices of Renewable Energy Guarantees of Origin (REGO) certificates have declined over September, with certificates from the current compliance year of 2024-2025 falling in price by the most, due to a healthy availability of REGO certificates currently.

A crucial milestone has been hit, with the UK’s final coal-fired power plant having closed on the 30^th September. The 2GW power station, located in Ratcliffe-on-Soar, Nottinghamshire, was opened in 1967¹, and at its peak supplied electricity to two million houses.

After being the first country in the world to introduce coal power 142 years ago, the UK is now the first G7 country to end coal’s use in electricity generation. As recently as 2012, coal still provided 39% of the UK’s electricity, which is testament to just how quickly our nation has committed to decarbonisation². This is largely thanks to the incredible growth of renewable energy in recent years – in 2012, renewables supplied only 11.3% of the country’s electricity, but this has grown to 50% in the first half of 2024³!

This is a significant milestone in decarbonising the electricity grid, and a step towards the Labour Government’s aim to deliver a zero carbon electricity system by 2030. It’s also encouraging to see that careful consideration has been made for those whose jobs will be affected by the shutdown. Plans have been put in place to ensure that, despite the possibility of job losses, the 170 workers affected will be supported, with many staying at the site to oversee the two-year decommissioning process⁴. A process has been coordinated with unions to provide new jobs for workers to move into, including reskilling and retraining.

In fact, there are also early-stage plans for the site to be redeveloped as a zero carbon technology and energy hub, potentially supporting the development of low carbon hydrogen and creating 7,000 highly-skilled jobs⁵. This low carbon hydrogen will be used to decarbonise other areas of industry, ensuring the site’s continued economic contribution to the area while also supporting wider decarbonisation.

To learn more about the closure of Ratcliffe-on-Soar’s coal-fired power station, you can visit Uniper’s website, here.

The UK Net Zero Business Census, led by UK Business Climate Hub and Planet Mark, have released their findings, with insight into businesses’ attitudes, actions and progress towards decarbonisation⁶.

The census revealed that 73% of businesses saw net zero as a priority in their business strategy for the next year, to differing degrees, with 43% seeing it as a high or very high priority. The participants named many benefits for reducing their carbon emissions, with the four most common answers being:

• contributing to tackling climate change (46%)
• increasing their business’ brand reputation (45%)
• displaying industry leadership through early action (42%)
• being able to comply with regulations that aim to limit carbon emissions (41%)

However, the census found that the biggest challenge in enacting the changes necessary to reach net zero targets was the high cost of starting their carbon reduction projects, with 59% of respondents naming it as a barrier. The report recommended that increased financial support mechanisms could help alleviate this challenge. Despite existing Government grants and funding, only 25% of respondents had accessed financial support, and only 31% engaged with educational resources, highlighting the need for increased awareness around available and free resources.

Positively, the census showed that 57% of businesses have a plan to reduce their carbon emissions, with 39% already reaching notable reductions, while most organisations (87%) are confident that they understand the importance of reaching net zero. It’s clear that many businesses are eager to prioritise decarbonisation – it’s important now that we work towards minimising any challenges they have in doing this.

You can access the full report, here⁷.

The UK Government has acquired the National Grid’s Electricity System Operator (ESO) and have transferred it into public ownership as of October 1^{st 8}. The newly named National Energy System Operator’s (NESO) three primary objectives are:

• assisting the Government in delivering its net zero targets
• advancing efficient, coordinated and economical systems for the electricity and gas networks
• ensuring that the supply of electricity and gas is secure for all customers⁹

NESO will be crucial in helping to connect renewable generation projects to the national electricity grid, working alongside Great British Energy to provide renewable electricity to consumers¹⁰. This is especially important, given a recent poll which highlighted that a lack of timely grid connections is the biggest challenge to 75% of energy experts¹¹.

NESO differs from previous approaches, taking a more unified, interconnected approach to the energy system and providing an integrated strategy through a singular body¹². Being independent from the Government and industry, the new National Energy System Operator’s public ownership is hoped to provide impartial expertise, which will assist in developing the most efficient energy system for the future.

To find out about NESO, you can read more here.

Renewables supplied over half of the UK’s energy mix for three consecutive quarters

A new record has been set, with over half of the UK’s energy supply being powered by renewable energy for the third consecutive quarter, including Q4 of 2023, as well as Q1 and Q2 of 2024, according to data from the Department of Energy Security and Net Zero’s (DESNZ)’s Energy Trends report¹³. Renewables supplied 51.6% of the total energy generation between April and June this year, and renewable generation increased by 19% compared to the second quarter of 2023.

Europe’s solar farms threatened by the impact of climate change

Solar farms, which are an important part of the net zero energy transition and provide zero carbon electricity at the point of generation, may be feeling the effects of climate change. A report has highlighted that increasingly extreme and erratic weather events, including hailstorms, present a significant threat to solar panels, damaging their protective glass and causing heavy repair costs¹⁴.

Over the last five years, Europe has seen a startling 267% increase in hailstorms. This presents a deterrent for prospective solar farms in hailstorm-prone areas. However, new and innovative technology, such as weather-monitoring systems and crack-resistant films for panels, are in development and will hopefully become cost-effective solutions, reducing this risk.

The rising interest in floating solar

Interest in the untapped potential of floating solar has been rising in recent years, as covered in a recent report by Solar Power Portal¹⁵. Floating solar photovoltaics (FPV) are installed on platforms anchored in bodies of water, which widens the potential of renewable energy from solar panels to areas where land is less available. Research also suggests that floating solar panels could help minimise water loss from reservoirs and lakes during times of extreme heat, shielding and keeping the water cool, while also helping to decrease the amount of harmful algal blooms that could grow.

Few floating solar projects have yet been implemented in the UK, but increased development and investment into this renewable energy source could provide a significant contribution to the UK’s energy supply. In fact, research has demonstrated that floating solar could be used in conjunction with hydropower reservoirs – covering only 2.3% of Europe’s hydro reservoirs with floating solar panels could provide 42.3TWh of power annually, and could prevent water loss, thereby keeping the hydro dams running more efficiently. Our parent company, Statkraft, has invested €2 million into a floating solar plant at a hydro power reservoir in Albania, a pilot project which was completed in 2023¹⁶.

The UK’s pipeline for onshore wind power has grown by over 4GW in the last year

In the last year, the UK’s onshore wind pipeline has progressed twice as fast as last year, according to a new report¹⁷. Across all stages of development combined, there has been an increase of 4.2GW since September 2023, growing the UK’s onshore wind pipelines from 38.5GW to 42.7GW, which is thought to be a reflection of the new Government’s lifting of the previous effective ban on onshore wind farms.

As wind is naturally abundant in the UK, it’s great to see the nation taking steps towards the stated ambition of being a global leader in this sector¹⁸. Wind energy makes up a large part of our own fuel mix, and so we are thrilled to see such significant developments in wind energy!

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

Statkraft release Green Transition Scenarios 2024

This month, Statkraft has released its annual energy report, Green Transition Scenarios 2024, with their findings emphasising that the path to a future powered by renewable energy may be difficult, but it is nonetheless achievable through collective and purposeful action. In this report, Statkraft explore the rate at which the energy transition is progressing, the vital drivers and challenges in the transition, and how renewable energy and low carbon technology is expected to progress in the future.

To read Statkraft’s summary of their key findings, or to access the full report, visit here.

Two Statkraft solar projects receive UK Government contracts through CfD auction

Statkraft has been doubly successful in being awarded two contracts in Allocation Round 6 (AR6) of the UK Government’s Contracts for Difference (CfD)¹⁹. These contracts are supporting the development of Stargoose Solar Farm in Cambridgeshire and Sheepwash Solar Farm in Kent, and will generate enough renewable electricity to power the equivalent of nearly 30,000 homes.

CfDs are one of the UK Government’s regulatory methods of supporting investment in new renewable energy generation. They are 15-year-long agreements with the Government, which secure a fixed price for the power the renewable energy generator produces. This means that if prices are low, the Government will supply the difference, and if prices are high, the generator will pay the excess. This provides financial certainty for investors and developers, and is designed to control costs for consumers²⁰.

This year’s CfD auction was the most successful yet, with 131 renewable generator projects achieving contracts, especially for wind, solar and tidal assets, including 9 offshore wind contracts²¹. After last year’s auction resulted in no offshore wind agreements, these results are a great step towards a grid powered by renewables.

You can learn more about Statkraft’s new projects, here.

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.