Weekend press round-up: UK to tell homeowners to ditch gas boilers in green plan

In our latest review of sector coverage across the national newspapers, the government is said to be considering proposals to fine homeowners who refuse low-carbon heating options. Meanwhile, wind power has reached a new milestone and a former Centrica boss is considering a £7 billion stock market float.

UK to tell homeowners to ditch gas boilers in green plan

British homeowners will have to replace their conventional gas boilers with potentially more expensive and greener alternatives under a radical plan being drawn up by Prime Minister Boris Johnson’s officials.

When owner-occupiers sell their homes, or carry out significant renovations, they would need to make sure their heating systems comply with tougher new environmental standards, people familiar with the proposals said. That’s likely to involve replacing a gas boiler with a heat pump, which can typically cost more than 10,000 pounds ($14,154).

Ministers are preparing to launch a consultation on how to regulate the proposed new rules. Options could include the threat of financial penalties for non-compliance, according to one of the people who declined to be identified because the policy has not been finalized.

Under separate regulations due to be put to a public consultation, boiler manufacturers would also be required to sell a minimum number of heat pumps alongside their gas boilers, one person said. That is likely to increase the price of standard gas boilers if companies add a surcharge to bills to cover their costs.

The proposals are a core part of Johnson’s drive to cut greenhouse gas emissions to “net zero” by 2050, as he seeks to turn the U.K. into a world leader on tackling climate change.

“Our heat and buildings strategy will be published in due course,” a spokesperson for the Department for Business, Energy and Industrial Strategy said. “While we do not comment on speculation around the content of forthcoming publications, we are clear that this and our wider efforts to tackle climate change will go with the grain of consumer behavior, and ensure measures are fair and affordable.”

Bloomberg

May gales help Britain set record for wind power generation

Powerful gusts of wind sweeping across Britain have helped the country reach a new all-time high for electricity generated from wind turbines.

A new record was set in the early hours of Friday for the share of wind power in the generation mix, with wind providing nearly two-thirds of Britain’s electricity, according to provisional data from National Grid.

Between 2am and 3am, wind was contributing 62.5% to Britain’s electricity mix, beating the previous record of 59.9% from August last year, when gale-force winds brought by storms Ellen and Francis hit the country.

As the blustery weather buffeted the UK, there were several periods between 10pm on Thursday night and early Friday morning when wind was contributing more than 60% for the first time.

The amount of electricity generated from wind in the UK hovered around 16.3 gigawatts on Friday, after hitting a record 17.6GW on the bank holiday in early May. So far this month, wind makes up 18% of the electricity mix, below the 20% recorded in May last year, but much higher than the levels seen in May in previous years.

The Met Office issued a yellow warning for wind for Wales and southern England through Friday, with the strongest winds expected in the south-west with gusts between 50-60mph in coastal areas and 45-50mph inland. BBC Weather warned of gusts of up to 78mph.

New milestones for wind power generation have been hit several times in the past year. On Boxing Day, when Storm Bella brought gusts of up to 100mph, wind provided 50.7% of Britain’s electricity, sustaining high levels for 24 hours.

2020 was the greenest year on record for Britain’s electricity system, when average carbon intensity – the measure of carbon dioxide emissions per unit of electricity consumed – reached a new low, according to National Grid.

The Guardian

Electric car drivers offered incentive to charge off-peak

Up to 25,000 electric vehicle drivers will be offered financial incentives to charge at off-peak times under plans to reduce the need for power grid upgrades.

UK Power Networks, which operates electricity distribution lines across London, the southeast and the east of England, is preparing for an influx of up to 4.5 million electric vehicles charging on its network by the end of the decade, up from about 150,000 at the moment.

Sotiris Georgiopoulos, its head of smart grid development, said that people tended to put their cars on charge from about 5.30pm until around 9pm. The company needed to ensure that this did not result in demand overwhelming the network, he said. “The network may need some additional capacity,” Georgiopoulos said. “Our traditional solution would be to say, ‘OK, let’s upgrade the local infrastructure’.” Instead, UK Power Networks hopes to get consumers to use power at different times. It has awarded £30 million of contracts to 17 companies that can help it by providing extra power or by working with households to reduce demand when needed.

It said that two thirds of the contracts by capacity had gone to companies that would encourage electric vehicle drivers to be flexible about when they charge.

The Times

UK businesses can unlock growth with green exports, says CBI

British businesses have the opportunity to create 240,000 low-carbon jobs and boost green exports by billions of pounds to radically transform the UK economy over the next decade, the CBI has said.

The UK’s foremost business lobby group said businesses across the country stood to gain from an “early mover advantage” by leading a campaign to decarbonise the global economy to avoid a climate meltdown.

Calling on companies to “seize the moment” amid demands for radical economic reforms after the Covid-19 pandemic, it said decarbonisation, innovation, growing trade and levelling-up Britain’s lopsided regional economy could unlock commercial growth opportunities worth £700bn by 2030.

Publishing a report into how businesses could help transform the economy over the next decade, it said the UK was at a turning point. Failure to adapt would lead to exacerbating the pre-pandemic trends of low productivity and heightened social divisions that plagued Britain after the 2008 financial crisis, it said.

According to the study, UK firms could boost low-carbon exports to the EU, including opportunities to grow electric vehicle and battery sales by £18bn over the next decade. It said a net 240,000 jobs could be created, including in cities and towns outside London and the south-east to help “level up” regional economies across the country.

Tony Danker, director general of the CBI, said businesses needed to work with trade unions, civil society and the government to cut carbon emissions to unlock the UK’s growth potential.

“We may disagree on detail but not on the need to align around this vision and these principles,” he said. “Decarbonising our economy is a planetary imperative, we can use our transition to net zero to create green jobs, to find sustainable solutions and sell them to the rest of the world.”

The intervention from the CBI comes as a report by academics from Imperial College London for the energy firm Drax issued a “weather warning” for Britain’s electricity grid, saying further investment was required to improve the mix of renewable energy production in case of periods of little wind.

The report said the UK experienced its longest spell of low wind output in more than a decade during the first three months of this year. The authors said output from the country’s 24.4GW fleet of wind turbines fell to as low as 0.6GW on 3 March – in contrast with the 18.1GW delivered later that month.

Between 26 February and 8 March – a total of 11 days – the capacity of the national wind turbine fleet did not go above 20%.

Grid operators had to call on gas-fired units to generate power to plug the gap, with every gigawatt of falling wind output being replaced by 0.84GW of gas, thereby harming Britain’s carbon-cutting ambitions, said the report.

“Britain’s ever-changing weather could put its landmark net-zero climate target at risk and become a threat to the power grid’s security unless policymakers take action,” it claimed.

The Guardian

Ex-Centrica chief Sam Laidlaw readies gas giant Neptune for £7bn float

The former boss of Centrica is considering a £7 billion stock market float of his oil and gas empire that would create a new FTSE 100 company — but would test investors’ appetite for another big energy stock amid pressure over carbon emissions.

Neptune Energy, chaired by Sam Laidlaw, is close to appointing the Wall Street bank JP Morgan to explore a listing or sale to a rival.

Neptune, founded in 2015 by Laidlaw, 65, with backing from the private equity giants Carlyle and CVC, has grown by buying assets such as North Sea gas fields from bigger operators, and now produces 12 per cent of the UK’s gas supply. State-owned China Investment Corporation owns 49 per cent of Neptune.

It is expected to be valued at between £5.5 billion and £7 billion. That would qualify it for entry to the FTSE 100 index and would make it the biggest company to float in London since March when Deliveroo, the takeaway app, was valued at £7.6 billion.

However, although three- quarters of its output is gas rather than oil, Neptune is likely to face tough questions from fund managers over climate change, given the UK’s goal of cutting carbon emissions to net zero by 2050. This season of annual meetings has seen a renewed push by activists seeking to speed up energy giants’ efforts to cut emissions.

On Tuesday, almost a third of Shell shareholders supported a resolution by the Dutch campaign group Follow This urging the board to adopt “inspirational” targets for tackling climate change. The same day, the International Energy Agency said that investors should stop funding all new oil, gas and coal supply projects if they wanted to reach net zero by 2050.

Neptune is based in the UK and about 13 per cent of its output comes from here, including from the huge Cygnus gas field in the North Sea. It is considering a London float but is also looking at Amsterdam, where Shell has a dual listing. The prospect of a multibillion-pound British company going to the Netherlands, which has already eclipsed London as the hub for euro-denominated share trading, could cause tension between the Treasury and the business department. Rishi Sunak, the chancellor, wants to attract more big floats to London after Brexit, while the business secretary, Kwasi Kwarteng, previously energy minister, has put tackling climate change at the heart of his agenda.

Neptune argues that it produces gas with much lower carbon emissions than bigger players. It is also investigating the use of technologies such as carbon capture and storage, which traps greenhouse gases underground.

A source close to Neptune said its shareholders, having received $800 million (£562 million) in dividends since it was set up, were in no rush to list the business and might sell or recapitalise it instead. Neptune, whose board is being advised by Rothschild, declined to comment.

The Times

Expense and range anxiety means one in three unlikely to buy an electric car within five years

More than a third of households are unlikely to buy an electric car in the next five years because they are too expensive, an Ofgem survey has found.

Research by the energy regulator found that 38 per cent of consumers were concerned about price, availability of chargers or the range of the battery.

One in four of those surveyed said they planned to buy an electric vehicle or plug-in hybrid in the next five years.

New petrol and diesel cars are to be removed from sale in the UK from 2030, though consumer groups have raised concerns over the feasibility of this given the patchy provision of chargers.

The survey also found that electric car owners were more likely to be on a “time of use” tariff, offering less expensive electricity at times of low demand, allowing cars to be charged more cheaply overnight.

Such tariffs require a smart meter and are designed to “balance” the grid, a particularly important issue as the UK becomes increasingly reliant on renewable energy.

Michael Briggs, head of sustainability at consumer rights company Which?, said:  “Millions of people are expected to switch to electric cars, however the UK’s fractured public charging infrastructure can be confusing, expensive and could present a major barrier to ownership, particularly for those who do not have access to a private charger.

“To ensure electric vehicles are an option for all consumers, the public charging infrastructure must be overhauled to offer universal access to all networks, making it much simpler and inviting than it is today.”

The Climate Change Committee anticipates that about 18 million battery and plug-in hybrid electric vehicles will be on the road by the time the ban on the sale of new internal combustion vehicles is introduced in 2030.

But a report this week by the Public Accounts Committee said the 2030 target would be missed without urgent action to improve infrastructure.

Only 13 electric car models on sale in the UK currently cost less than £30,000, the committee of MPs found.

Its report said MPs were “not convinced that the government has sufficiently thought through how the charging infrastructure will expand at the pace required to meet the ambitious timetable to phase out petrol and diesel vehicles.”

On Wednesday green lobby group Transport & Environment warned of a  “postcode lottery” in access to chargers, with some areas having less than five per cent of the levels needed to serve the number of electric cars predicted to be on the roads in 2025.

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.