Weekend press: More cash for wind farms near towns as net zero shift stretches grid

In our latest review of sector coverage across the national media, the government is poised to give its backing to a form of locational power pricing. Meanwhile, concerns are growing over the impacts of the grid connection backlog, the decision on where the first mini-nuclear reactors will be built has been delayed and there are warnings that water consumption targets are over reliant on metering.

More cash for wind farms near towns as net zero shift stretches grid

Developers are to be handed more cash to erect wind turbines and solar farms near towns and cities in a bid to get more power generation near to where it is needed.

Renewable energy companies will be allowed to charge customers more for their power if they generate it close to where it is needed, rather than in sparsely populated parts of the country.

The scheme, to be formally announced on Tuesday by Claire Coutinho, the Energy Secretary, is designed to trigger a rush to build wind and solar infrastructure on farmland around cities.

However, the policy is also likely to prove highly controversial with environment groups because of the likely impact on treasured landscapes.

The Government will introduce zonal pricing, with generators paid different rates according to the distance between their assets and consumers.

The UK will be divided into about half a dozen generating zones so that onshore wind and solar farms in the Home Counties could be paid more for their power than those in Scotland, for example.

Research by Ofgem suggests that making electricity prices higher in the South East, where demand is strongest and supply weakest, would incentivise solar developers.

They would be encouraged to buy up swathes of farmland in a region stretching from London to Bristol and up to Norwich and Cambridge for solar parks and wind farms.

A key aim is to halt an increase in ‘constraint payments’ – where wind and solar farms are paid to turn off their generators to stop them overloading the grid at peak times.

This is particularly a problem when energy companies build wind farms in remote northern locations with insufficient grid connections to carry their power south. This can cause infrastructure to be overloaded at times of high wind.

Operators can claim compensation payments for switching off in order to prevent power surges. Last year this added more than £300m to consumers’ bills.

A government source said the change would cut consumer bills by an average £45 per year.

They said: “These proposed changes will pass on the benefits of cheaper power to people across the UK and help reduce bills.”

Ofgem has calculated that zonal pricing could help cut overall consumer bills by £51bn over 15 years.

Under the proposed zonal system, the price of electricity in each region would be based on local supply and demand, as well as how close power stations are to consumers.

However, the plan to encourage development of more onshore wind and solar farms is likely to face opposition.

Ten years ago a backlash against onshore wind farms over their impact on landscapes forced David Cameron, the then prime minister, to impose a de facto ban on new developments that has persisted to this day.

Ms Coutinho is understood to be determined to reverse this. She will set out the plans in a speech on Tuesday.

See Utility Week’s latest reporting on the issue here

Daily Telegraph

Capacity crunch on National Grid is delaying new homes in UK by years

Housing projects are being delayed for years because of an “infra­structure crisis” caused by lack of capacity in the National Grid, council leaders have warned.

Building schemes for thousands of homes are on hold, while new ­projects face delays of up to four years in some parts of the UK because of a ­lengthening queue of developers waiting to be connected.

Those hoping to build new wind turbines, solar farms or micro-hydroelectric schemes face even longer waits after a deluge of new connection requests, many of them from speculative schemes.

Ministers have asked the National Infrastructure Commission (NIC) to investigate, but senior members of the District Councils’ Network (DCN), part of the Local Government Association, say the delays are slowing down the UK economy. Bridget Smith, the DCN’s vice-chair and leader of South Cambridgeshire district council, said: “Nationally, we’ve got an absolute ­crisis in all infrastructure.”

Plans by Michael Gove, the housing secretary, to build 150,000 homes in Cambridge to create a British Silicon Valley were already being hampered by lack of water, she said. “And where’s the power coming from? Something fundamental has to change.”

Susan Brown, the leader of Oxford city council, who is also a DCN vice-chair, said that 90 new homes in the Littlemore district had been meant to have heat pumps. “The National Grid basically said ‘we won’t have enough power to connect them’ so half the houses are going to have to have gas boilers instead – it’s so frustrating.”

Brown, who is also chair of the Future Oxfordshire Partnership, said plans to expand the town of Bicester with 7,000 new homes and a commercial zone had ground to a halt.

All of that has been paused, awaiting grid reinforcement,” she said.

Under the current first-come, first-served system, developers can pay to jump up the queue, but the Bicester project has a further twist of red tape because there are two developers – one for the housing and another for the commercial buildings.

“Competition rules mean they’re not allowed to broker a solution together,” Brown said. “That’s particularly mad because it means they are dancing around, hoping the other one is going to take the full cost of providing grid reinforcement. There are so many daft things in our system.”

Brown said that leaders in other areas such as Milton Keynes, Swindon, Cambridge and Peterborough – with whom she works as part of the Fast Growth Cities group – were ­reporting similar problems. “It’s really beginning to constrain our ability to grow our local economy, which is significant for UK plc because the Oxford-Cambridge wider area is a significant net contributor to GDP, and not many bits of the country are.

“It’s possible that we’re a little bit ahead of the curve across the ­country. If they’re not already experiencing [these problems], people elsewhere will be experiencing them very soon.”

Although demand for electricity from builders is not being met, plans to expand the electricity supply are also causing problems, as the National Grid has been swamped with applications to build solar and wind farms – far more than the country would ever need.

Two weeks ago, the National Grid’s electricity systems operator (ESO), which manages power distribution, said that the connections queue had “grown at unprecedented pace”.

Great Britain’s power stations together generate 75 gigawatts of electricity, and the mainland is expected to need about twice as much by 2050 as people switch to ­electric vehicles and heat pumps.

But in January alone, developers submitted projects that would add 49GW, and the ESO said the queue could reach the equivalent of 800GW by the end of the year – more than four times as much as the country would ever need.

Being swamped with applications has made delays even longer, and Ofgem has had to approve a three-month delay until developers even find out when they can get connected. David Wildash, the ESO’s interim director of engineering, said in a blogpost that “we recognise that the outcome of this process is not what was envisaged at the outset. The outcome will be hugely disappointing to our customers.”

The delays come after Ofgem had already taken action last year to remove so-called “zombie” projects – those that had been approved but had stopped being developed – from the connections queue.

The Observer

Water crisis plan for UK puts ‘too much reliance’ on metering, says ex-minister

Plans to cut radically household water usage in England are based on unrealistic projections that installing water meters will substantially drive down demand, former environment secretary George Eustice has warned.

Ministers have set legally binding targets to cut household water consumption per head by 20 per cent by 2038 in an effort to reduce shortages, which are holding up business and housing development.

However Eustice, who spent nearly a decade as a minister in the Department for Environment, Food and Rural Affairs, including two years as secretary of state, said a fundamentally different approach was needed to reach the targets.

“Current plans place far too much reliance on metering and behaviour change to meet that challenge,” Eustice told the Financial Times. “When you see some water companies suggesting that ‘gamification’ might help drive behaviour change, you know you have a problem,” he added.

The comments came as the government unveiled plans to test a new water trading market, which would enable housebuilders to offset their water usage through the purchase and sale of “water credits” to ensure they have a neutral impact.

The scheme is being trialled in Cambridgeshire, where water shortages are holding up government plans to expand the city as a life sciences hub.

The Environment Agency watchdog has already blocked the construction of more than 9,000 homes and 300,000 square feet of lab space because of a lack of sustainable water supply.

The £9mn credit trading scheme, which was announced in the Budget, requires the establishment of a new market framework and operator, which would match buyers and sellers of water credits.

Water usage would be monitored by water companies through their meters, which are installed in properties, with the data checked by the Environment Agency and the new operator.

Eustice welcomed the Cambridge pilot scheme, which the government said had been primed with £4.5mn for retrofitting commercial and public buildings with water-saving devices, but said it reflected a wider failure of water companies to make good on their promises to deliver savings.

He added that a fundamentally different approach was needed to reach conservation targets in other regions or they too would face stricter controls on development, such as the “water neutrality” rules imposed on North Sussex where all planning applications must show they do not increase water consumption.

“Unless other policy levers get used in a timely way, you end up with water neutrality and water credits as a last resort,” he said.

Read the full article (subscription required) here

See Utility Week’s analysis of the Cambridge scheme here

The Financial Times

Decision over first mini-nuke sites delayed amid legal action fears

Great British Nuclear (GBN) has delayed a decision on where the first mini-nuclear reactors will be built until after the next election, following concerns that losers of a design contest may otherwise threaten to sue.

The public body, which is tasked with preparing the ground for a ‘nuclear renaissance’, previously said it would select small modular reactor (SMR) designs for public support by the spring and award contracts for development by the summer.

But in last week’s Budget, it emerged the selection has now been pushed back to June at the very earliest.

It means there is almost no chance contracts will be awarded before the next general election, expected to be held either as soon as May or some other time in the second half of this year, officials believe.

The decision to slow the pace of GBN’s design competition was taken amid fears that rushing the process would leave the outcome exposed to legal challenge, via judicial review, the Daily Telegraph understands.

It is also thought more time was requested by some of the bidders. Six companies have been shortlisted, including Rolls-Royce, EDF, GE-Hitachi, Holtec, NuScale and Westinghouse.

The setback is the latest delay to the SMR design competition, which was first announced by former chancellor George Osborne in 2015.

In recent weeks, Tufan Erginbilgiç, chief executive of Rolls, which is seen as the frontrunner, warned that his company could build its first mini-reactor in Europe if ministers failed to speed up decision-making.

It comes after GBN also announced it had agreed terms to buy the nuclear sites Wylfa, on Anglesey, and Oldbury, near the River Severn, for £160m.

There were still questions on Friday about whether the Government would acquire Horizon’s intellectual property as part of the land purchase, including valuable environmental and geological surveys carried out. It has not done so yet but GBN remains in talks about the issue.

Nuclear companies that have visited Wylfa believe that having the information could shave as much as 12 months off development timelines if plans for a large nuclear power station there are eventually agreed.

The Daily Telegraph

Artificial intelligence helps reduce water leaks

A Surrey water company is one of the first in the UK to use artificial intelligence (AI) across its whole network to reduce leaks.

Sutton and East Surrey (SES) Water has installed 1000 sensors underground that monitor flow and pressure, then send data back to base.

The technology also provides a prediction of what levels should be, so if a leak happens, an alarm is raised within minutes and engineers are deployed.

Innovation manager Jeremy Heath said: “In many cases we are repairing that pipe before customers even notice a slight drop in their pressure.”

“It allows us to react, get the crews out really quickly and get the repairs done,” he added.

According to the regulator Ofwat, about a fifth of all water put into the network in England and Wales is lost due to leakage.

SES Water said it is on schedule to cut leakage by 15% over the five years to the end of next year and believes the project is the first of its kind in the water industry.

Liam Ahearne, Head of Asset Strategy said: “Our smart network has enabled us to reduce our leakage run rate times by up to 40%.”

BBC News

Hydrogen start-up can expand thanks to Northern Powerhouse fund

Suiso, a South Yorkshire-based company developing a hydrogen generator, has raised £3 million from the Northern Powerhouse Investment Fund (NPIF).

The company plans to create generators as big as shipping containers that could power factories, hospitals and warehouses or be used at filling stations to fuel hydrogen-powered vehicles.

The new funds come from the asset manager Mercia’s equity finance fund, which is part of the NPIF, and Mercia’s enterprise investment scheme.

Suiso uses novel microwave technology to extract hydrogen from natural gas or biogas, capturing the carbon in the form of carbon black, which can be used to make tyres, batteries and inks. In 2023 the company was one of the winners of a government competition to provide technology to supply hydrogen energy.

Stuart McKnight, chief executive of Suiso, said: “Hydrogen is rapidly emerging as a sustainable way to decarbonise the economy, but cost, availability and other practical issues have held back its use. Our technology offers a way to overcome these and provide clean, low-cost power on-site.”

A study by the Department for Business, Energy and Industrial Strategy found that Suiso’s process used around 80 per cent less energy than electrolysis and produced 97 per cent less emissions than steam methane reforming — another common method for hydrogen extraction.

Suiso was founded by McKnight, an engineer and financier, and SB Cha, the former chief executive of Acal Energy, a failed clean energy start-up.

The latest investment will enable the company to begin a pilot project and hire seven staff, in addition to the five it already employs. It plans to eventually produce generators that can produce 1,000kg of hydrogen a day, enough to fuel fifty 20-tonne trucks.

The Times

British battery plants given cheap power to break dependence on China

British battery metal refiners and electric car gigafactories are being handed cheap power deals by the Government as part of a battle to cut the West’s dependence on China.

Companies will get the energy relief from next month with the aim being to boost domestic production of key minerals needed for wind turbines, electric cars and defence technologies, officials and executives say.

China has an iron grip on global refining, handling about 70pc of the world’s cobalt, 70pc of nickel, 60pc of battery-grade lithium and as much as 90pc for some rare earth elements.

But ministers want at least some of this production to be “onshored” in the UK in future, amid broader western fears that Beijing could threaten supplies during a geopolitical crisis.

With high electricity costs seen as a major barrier, however, insiders said the new measures are designed to make Britain more competitive internationally. Officials also want to deter so-called carbon leakage, where goods are made abroad using more polluting processes and then simply imported here.

It is understood that critical mineral refiners and battery factories are among those set to benefit from the relief, with the promise of the subsidies helping to seal significant investments.

One source familiar with the schemes said: “Helping to level the playing field on energy costs, and the added advantage of supplying green power for these new industries, really does start to shift the balance.”

The Daily Telegraph

Climate chief told staff to ‘kill’ negative net zero story

The head of the Government’s climate watchdog told officials to “kill” a negative news story with “technical language”, The Telegraph can disclose.

Chris Stark, chief executive of the Climate Change Committee (CCC), drafted the response when asked for clarity over claims of a “mistake” made by the body.

“How’s this – kill it with some technical language,” he told his team.

The exchange was revealed in a Freedom of Information request submitted by The Telegraph after apparent obfuscation by the climate watchdog over a story published by The Telegraph in January.

Mr Stark’s comments were made in private emails exchanged within the CCC after The Telegraph contacted the body for a response to a planned article in January.

The article reported a claim by Sir Chris Llewellyn Smith, who led a recent Royal Society study on future energy supply, that the CCC had privately admitted that it made a “mistake” when it only “looked at a single year” of data showing the number of windy days in a year when it made pronouncements on the extent to which the UK could rely on wind and solar farms to meet net zero targets.

Referring to The Telegraph’s initial query about Sir Chris’s comments on Thursday, Jan 18, Mr Stark told staff: “I’m happy with a short response. If you need more, here’s what I suggest. But it may just feed the beast – so less may be more here.”

He added that the Royal Society would be “very embarrassed about this”, and one of his officials contacted the body to alert them.

An unnamed individual – apparently a representative of the Royal Society – stated that Sir Chris “says the comments about privately conceding a mistake were made to him by Chris Stark”.

In the internal emails, Mr Stark insisted to staff that “we absolutely have not conceded that there’s a ‘mistake’ in our work”.

But, despite repeated questions from The Telegraph about whether he did make the comments described by Sir Chris, Mr Stark removed suggested on-the-record denials from the body’s response, telling staff: “No need to fuel a fight.”

In emails to The Telegraph, the CCC said Sir Chris’s comments, in a presentation given in a personal capacity in October, following the publication of his review, related solely to a particular report it published last year on how to deliver “a reliable decarbonised power system”.

But The Telegraph pointed out that its original recommendations in 2019 about the feasibility of meeting the 2050 net zero target were also based on just one year’s worth of weather data. The recommendations were heavily relied on by ministers when Theresa May enshrined the 2050 target into law.

The Telegraph put several questions to the CCC, including asking to what extent the 2019 recommendations – and the predicted cost of the 2050 target – would have been different had they relied on a greater amount of weather data.

In response, an official suggested to Mr Stark that the CCC simply reply stating that “we stand by the analysis” of its 2019 recommendations, adding of Sir Chris’s comments: “We welcome Sir Chris’s work, which considers other aspects of the energy challenge in 2050, under different assumptions about the future energy mix.”

But Mr Stark replied: “How’s this – kill it with some technical language.”

He suggested an extra sentence, which was then issued as the CCC’s official response to The Telegraph, stating: “Our recent report modelled Britain’s power system in 2035 using hourly energy demand across that year and real weather data from a low-wind year, stress-tested with a 30-day wind drought.”

A CCC spokeswoman said: “The CCC regularly receives a large number of media requests. Given the nature and remit of the organisation, we provide technical and accessible responses to as many as we can.

“In this specific situation, this was informal language between colleagues, written for internal purposes only.”

The Daily Telegraph

Water firm which killed thousands of fish with raw sewage is hoping to sell Lego models for cash

A water firm guilty of some of the worst sewage pollution in UK rivers has turned its hand to Lego.

Southern Water — fined £330,000 for killing 2,000 fish by dumping raw sewage — wants to educate kids with its Sewer Heroes: Fighting the Fatberg model creation.

Bosses have appealed to customers to vote for the kit on the Lego Ideas website in the hope it will one day be sold in shops.

It features a sewer team working with pumping equipment in tunnels below a burger shop trying to clear a fatberg blockage.

The firm’s Network Protection and Enforcement Team are promoting the model amid fury over the region’s filthy rivers.

A Southern Water spokesman said: “If it can reach its 10,000 target, it will be reviewed by Lego’s master builders, and potentially become an actual commercial set.

“We’re asking our customers to add their votes to the project, by clicking on the link and helping us reach the target.”

The Sun

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.