Weekend press round-up: Switch from oil and gas top of Trevelyan’s to-do-list

In our latest review of sector coverage across the national newspapers, the new energy minister discusses her priorities. There is also speculation about a ban on UK suppliers buying REGO certificates from the EU, as well as profiles of new projects exploring the potential of hydropower and isotope batteries.

Switch away from oil and gas is top of my to-do-list, says Anne-Marie Trevelyan

Anne-Marie Trevelyan’s constituency of Berwick-upon-Tweed, Northumberland, has tasted its fair share of battles over energy policy.

Plans by Durham-based miners, The Banks Group, to produce coal near the picturesque Druridge Bay on the North Sea coast were approved by Northumberland County Council before being kicked out twice by Conservative ministers.

Ms Trevelyan, 51, sided with local opponents to the mine, celebrating their victory in September 2020 after a “long fought battle to protect our communities”.

Years earlier, in 2011, she spoke out against onshore wind developers wanting to “trash our landscape”.

The experiences have perhaps given her a particular perspective as she takes on her new job as energy minister at a time of an unprecedented push towards renewable energy.

Her boss, Boris Johnson, once dismissed wind power as too weak to “pull the skin off a rice pudding,” but has now put it at the heart of his strategy to cut carbon emissions to net zero by 2050.

Tensions are inevitable as businesses and individuals are asked to change their ways as the energy system is overhauled, creating opportunity but also huge upheaval.

It emerged last week that the government is exploring new carbon taxes meaning that all sectors, not just the most polluting, will be charged for their emissions, with costs likely to be passed onto consumers.

One of Ms Trevelyan’s first tasks is to negotiate with North Sea oil and gas drillers on a “transition deal” to help them cut their emissions and embrace newer technologies such as low carbon hydrogen and carbon capture.

Her predecessor, Kwasi Kwarteng, indicated that North Sea drillers will not get licences unless they commit to slashing their emissions, amid a government licensing review.

“It’s on my list of things the PM wants me to get out of the door – one of the early ones, it is a long list,” she says, in her first interview since taking on the role. “I have had some really good discussions with a number of key businesses. As we build our alternative energy supply, we need to keep our houses going and our lights on and the North Sea supply line is a critical part of that. We can’t do without them on the way through.”

Today, the government is also unlocking more funding to help heavy polluters to decarbonise, opening a second round of its £289m Industrial Energy Transformation Fund.

Fresh in the energy post, (Trevelyan) demonstrates an early willingness to push back on advice to the government from its climate advisers, staunchly defending Cumbria County Council’s plan to approve a new mine to produce coking coal to make steel.

The climate change committee has warned that the project will increase emissions while 85pc of the coal will be exported. Ms Trevelyan argues that its production of coking coal for the UK steel industries, which currently cannot run on anything else, gives it special status.

“We can either get it here from that mine, which has the support of the local community and the local council, or we can import it,” she says. “We want to have a steel industry in order to be able to build our turbines, power stations, nuclear ships, our cars. So we can either offshore the carbon cost on this coking coal that we need and not take responsibility for it, or we can say, as part of our energy security, we consider it to be part of the cost.”

She adds: “This is coal for the steel industry which we need and for national security reasons we want to be able to maintain that supply.” A similar argument of national self sufficiency has been made by supporters of onshore fracking. Ms Trevelyan says any review of the government’s moratorium on the practice, introduced in 2019 due to safety concerns, is a “non-starter”.

Cumbria, where the coal mine is being dug, has also been eyed by nuclear power station developers, although plans for a potential new plant in Moorside were abandoned by Toshiba and have yet to be restarted by anyone else.

It leaves any hopes of replacing the UK’s ageing nuclear fleet on shaky ground, with France’s EDF and its Chinese partner, CGN, the only developers currently building. Their Hinkley Point C plant in Somerset is well advanced while the government is in talks with EDF about a second plant, Sizewell C, in Suffolk, as part of plans to invest in at least one nuclear power station by the end of this parliament.

Ms Trevelyan says nuclear is an “important part of our future”, voicing support both for emerging advanced and small modular reactors alongside established technology. “An important part of what we do is to kick-start all those components in the wider nuclear space along with making sure we deliver Hinkley and Sizewell and one other in the short term – relatively speaking – to make sure that nuclear baseload is embedded in our power supply,” she says.

Sunday Telegraph

Green energy tariffs: how Brexit puts yours at risk

Green energy tariffs from leading suppliers such as British Gas could be at risk because of Brexit.

Many companies that sell “green energy” in the UK do not actually produce all of it themselves but instead buy certificates from renewable energy sources, which allow them to market their tariffs as green.

These certificates, known as Guarantees of Origin (GoOs) in the EU and Regos in the UK, are awarded to show that a certain proportion of the energy generated was from renewable sources.

Energy suppliers are allowed to buy these certificates by investing in the green energy source. It’s a good deal for the supplier because they are cheap, costing about €1.24 (£1.09) a year for every “green” customer that signs up to the supplier’s green tariff.

British Gas is by far the biggest UK buyer of certificates from the EU, paying for more than 20 million in the 2019-20 financial year with sources including a wood-burning power station in Sweden, a solar farm in Spain and biomass plants in Finland.

But the trade in certificates is not covered by the Brexit agreement and European energy suppliers have been banned from buying Regos from British companies since January 1. The government is now considering a reciprocal ban on UK suppliers buying certificates from the UK (sic).

This could force British Gas to either spend millions investing in green energy at home or to stop marketing some of its domestic tariffs as environmentally friendly.

A spokeswoman said the government would be reviewing “the UK position in relation to recognising EU guarantees of origin to ensure that UK recognition of Regos issued in EU countries will take place only on a reciprocal basis. Further details will be announced in due course.”

The Times

Queen’s property manager banks huge windfarm bonanza

The Queen and the Treasury are in line for a multibillion-pound bonanza from renewable energy, after a major auction of seabed plots for windfarms off the coasts of England and Wales attracted runaway bids.

The crown estate, which manages the monarch’s property portfolio, holds exclusive rights to lease the seabed around the British Isles. With its first auction of windfarm licences in a decade understood to have reached record highs, the Queen’s income is expected to leap by at least £100m a year, while the takings will generate over £300m a year for the Treasury.

Two windfarm sites within the Irish Sea have reportedly attracted the most frenzied bidding, with energy firms offering to pay as much as £200m for each – a total revenue of £400m a year. Awards for another three areas have yet to be decided. The licences are for 10 years, meaning the auction will raise at least £4bn over a decade.

The vast sums involved have prompted calls for the revenues from Britain’s renewable resources to be kept by the public in a “green sovereign wealth fund” that could be used to invest in tackling the climate crisis.

“Rather than being squirrelled away in Treasury coffers, how much better would it be to use this renewable windfall as initial capital for a sovereign wealth fund that could then be invested for future generations, similar to what we’ve seen the likes of Alaska and Norway do in the past with their oil wealth,” said the Green party co-leader, Jonathan Bartley.

The crown estate declined to comment on the confidential process which requires all participants to sign ironclad non-disclosure contracts to prevent leaking commercially sensitive details about the process before it has concluded.

The crown estate’s profits from the multibillion-pound windfall would more than double the property manager’s £345m earnings in the last financial year. The money is handed to the Treasury before 25% is returned to the royal household in the form of the sovereign grant.

The sovereign grant was increased in 2017, from its previous level of 15%, to pay for extensive renovations at Buckingham Palace. It will stay at 25% at least until the next five-year review in 2021-2022, meaning the royal household should benefit directly from the money raised from the new windfarm leases.

The Crown Estate was given the renewable energy exploitation rights to the seabeds around Britain in 2004, under an Energy Act passed while Tony Blair was prime minister. MPs voting through the legislation at the time are unlikely to have predicted the sea change in energy provision now leading forecasters to predict wind will become the dominant energy source in the UK.

The Guardian

Wales bids for Hitachi nuclear site

The Welsh administration has made a last-ditch attempt to salvage a nuclear power project on Anglesey by trying to take it over from Japanese industrial giant Hitachi.

The Labour-led government is understood to have approached Hitachi about acquiring the Horizon project and its staff, to keep it alive in a caretaker role until a developer can be found.

Hitachi killed off plans to build nuclear power plants in the UK in September, after writing off £2 billion in 2018. The firm, whose interests range from trains to power grids, will shut down the project at the end of next month. It had planned to build a £20 billion nuclear plant at Wylfa on Anglesey.

Pro-nuclear MPs and peers last week wrote to Boris Johnson warning of “grave concern” and asking for his help to revive the project. The all-party parliamentary group on nuclear energy said Horizon was “at the heart of the levelling up agenda” and that “only the UK government can facilitate a way to save the project”.

A stumbling block is understood to be the value of the land, with Hitachi demanding a significant sum.

Sunday Times

Powering up: UK hills could be used as energy ‘batteries’

Hundreds of hills across the UK could be transformed into renewable energy “batteries” through a pioneering hydropower system embedded underground.

A team of engineers have developed a system that adapts one of the oldest forms of energy storage, hydropower, to store and release electricity from gentle slopes rather than requiring steep dam walls and mountains.

This could unlock hundreds of potential hydropower sites across the UK, which would be quicker and cheaper to build than traditional hydropower dams and also lead to fewer negative environmental impacts.

The hillside projects would mimic the UK’s traditional hydropower plants by using surplus electricity to pump water uphill, and later releasing the water back down the hill through turbines to generate electricity when needed.

But the “high-intensity” hydro projects use a mineral-rich fluid, which has more than two and a half times the density of water, to create the same amount of electricity from slopes which are less than half as high.

The company behind the plans, RheEnergise, said the project would pump the dense fluid up a hill with a height of 200 metres, at times of low electricity demand. It would be held in an underground storage tank larger than an Olympic-size swimming pool.

Then when extra electricity is required, the fluid would be allowed to flow back down the hill, over generating turbines, to effectively return the electricity used by its pumps earlier in the day back to the grid.

RheEnergise claims that this breakthrough could allow around 700 sites across the country to play host to their high-intensity hydro projects, which in theory could create a total of 7GW of energy storage to help the UK use more renewable electricity.

The UK is expected to need around 13GW of flexible clean energy generation and storage to help balance the electricity grid by the end of the decade, according to a report by Aurora Energy Research.

Other companies, such as Edinburgh-based Gravitricity, plan to create “gravity energy” to create electricity – by dropping weights down disused mine shafts – at half the cost of lithium-ion batteries. These innovative storage projects are unlikely to replace the UK’s need for batteries, but they could help the UK meet its targets at a lower cost.

The Guardian

Why Britain’s energy future lies in a little box of tricks

Imagine a nuclear battery in a little box that uses decaying isotopes to generate cheap and clean electricity around the clock for decades with no combustion, fission, or noise. It just sits silently and emits constant power.

This far-fetched idea is becoming real. Vaulting advances in materials sciences are unlocking technologies that radically change the cost calculus of radioisotopes. Companies are springing to life with prototypes that could be on the market before the next general election.

As it happens, the UK is the world leader in the rarified field of isotope batteries. A British-Australian start-up with research operations in Cumbria has found a way to harness gamma rays from the radioactive decay of cobalt-60. Infinite Power thinks it can cut costs to levels that take your breath away. “It is the cheapest source of electricity on the planet,” says Robert McLeod, the chief executive.

The batteries can be used for anything from charging posts for electric vehicles to full-sized power plants for cities, generating cheap baseload electricity. This power can be used to balance the grid as intermittent wind and solar become the backbone of the system, but also switch to the production of “green” hydrogen from electrolysis at off peak-times.

Infinite Power is working with the UK National Institute for Advanced Materials, a hub of leading universities known as the Royce Institute. These are part of a flourishing British ecosystem in radioisotope technology. In 2019 the National Nuclear Laboratory launched an Americium battery on behalf of Nasa that can generate power for hundreds of years in deep space, the first of its kind in the world.

Scientists at the Culham Centre of Fusion Energy are working on tritium (hydrogen-3) and carbon-14 to make ‘diamond batteries’ from spent nuclear fuel. They have linked up with the University of Bristol on a man-made diamond that harvests the energy from carbon-14 isotopes and promises to generate power on a “near infinite basis”.

A spin-off company called Arkenlight is working on the first commercial prototypes for microbatteries. “Ultimately we want to be producing millions of devices annually. It’s an extremely exciting project,” said Prof Tom Scott, the leader of the project.

Infinite Power is eyeing different segments of the market, convinced it can outcompete fossil-fuel plants for electricity on a gigawatt scale. The technology works in much the same way as a solar panel except that the energy does not come from the sun. It comes from the decaying isotope.

The normal vibration process in solar cells instead converts beta, X-ray, and above all gamma waves from cobalt-60 into electricity. “There is much more energy in a gamma ray,” said Mr McLeod.

Mr McLeod estimates the “levelised cost” of electricity at $7-17 per megawatt hour, cheaper than thin-film solar ($36-44), gas combined cycle ($44-68), or nuclear ($118-192), once scale is achieved. The capital cost is under $300,000 per megawatt, a tiny fraction of the $6,500 average cost for the latest nuclear reactors.

If the company can deliver anything close to this cost the technology offers tantalising possibilities for the UK’s net-zero drive, and for wider global use. There has been a surge of interest from American investors since the Biden administration swept into Washington on an electrification mission.

The UK government has jumped on Infinite Power’s cobalt-60 battery to help solve an immediate conundrum: how to switch from combustion engines to EVs without breaking the grid, already under transition stress as it goes from being a 20th Century fossil-based system to a 21st Century flexible system of distributed green power.

The UK would in theory have to double its total generation to decarbonise just half of all road transport traffic, although a static analysis exaggerates the apparent difficulty: EV car batteries would themselves be part of the solution by charging at night and releasing power back to the grid at peak times for an arbitrage profit. Nevertheless, cobalt-60 is the answer to immediate prayers at the Department of Business, Energy, and Industrial Strategy.

Once the technology takes off, demand creates its own supply. It becomes commercially worthwhile to build small industrial reactors just to make the cobalt-60 round-the-clock. That at least is the idea.

Mr McLeod said the radioisotope technology has lain dormant because the world was not ready. He compared it to gasoline in the late 19th Century before the combustion engine. It was deemed useless by early oil drillers and tipped into rivers in Pennsylvania. A single twist in technology turned waste into liquid gold.

What is clear is that there are countless technologies emerging across the world that are changing the calculus on CO2 abatement faster than governments, economists, and commentators can keep up.

Britain is the crucible where so many breakthroughs are happening, perhaps because the country never succumbed to the technology luddism of the precautionary principle, and perhaps because the grip of vested interests is relatively weak (the same thing).

The UK may achieve net-zero much sooner than widely-supposed, and at a nice profit.

Daily Telegraph

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.