Weekend press round-up: Utilities brace for coronavirus impact

As workers are kept home by the Coronavirus pandemic, EDF is considering offering those affected a reprieve from payments, whilst the energy industry grapples with the effects on electricity demand. Meanwhile, planning applications for renewable energy projects hit a new high – all in the latest round-up of the weekend’s papers.

Pause on energy bills for those forced to work from home

Millions of households could be given a break from energy bills as a growing number of companies send employees home because of the coronavirus crisis, the Sunday Telegraph can reveal.

EDF Energy, which has five million customers and is one of the biggest utility firms in the country, said it would consider offering delayed payments to anyone who is affected by the outbreak.

The news comes after the government warned that up to a fifth of employees could be off work at the same time, disrupting regular travel plans and increasing power usage…

The Telegraph understands that energy bosses are in regular communication with the government and regulators to determine how best to support customers who may run into financial difficulty.

A spokesman for EDF said: “We recognise that over the coming weeks Covid-19 may have an impact on our customers, and we are prepared to offer these customers additional support and flexibility.

“Each case would be looked at on an individual basis, but additional support we could offer may include repayments made over a longer period of time, delay payment for a short period or offer alternative payment arrangements.”

The Sunday Telegraph

Planning applications for UK clean energy projects hit new high

The number of new renewable energy projects applying for planning permission reached a four-year high in the UK last year as energy companies raced to meet the rising demand for clean electricity.

There were 269 planning applications for new wind, solar and bioenergy projects in 2019, up from 204 the year before, according to an analysis of government data by energy consultancy PX Group.

The jump in applications last year was the biggest annual increase in recent years and 75 per cent higher than the number of annual planning submissions made three years ago. There were just 154 submissions in 2016, rising to 185 in 2017.

The consultancy said there was a growing appetite among energy companies for new renewable projects to help cut carbon emissions and reach the UK’s climate goals.

Clean energy developers are also able to roll out more projects due to falling technology costs and greater support from financiers, who view renewable energy as a lucrative investment.

Geoff Holmes, the chief executive of PX Group, said: “It goes without saying that as more of these projects get off the ground, the faster the UK can get to a point where clean, green sources provide an even greater share of the UK’s energy.

“Of course, there is a lag time between submitting plans to councils and projects becoming fully operational, so more projects being in the pipeline is not a quick fix.”

Planning submissions for clean energy projects are expected to rise in the years ahead due to the government’s decision earlier this month to lift a block against subsidising onshore wind projects that was put in place almost five years ago.

From next year, onshore wind developers will be allowed to compete for subsidies at auction alongside solar power developments and floating offshore wind projects, the government said last month.

There has been a sharp decline in the number of new onshore windfarms since the block was put in place by David Cameron in 2016. The rollout of new onshore wind capacity fell to its lowest level since 2015 last year, prompting warnings that the UK risked missing its climate targets.

Under the new plans, windfarm developers will need to comply with tough new proposals on community consent to qualify for the auction process, and projects planned for England will also need the consent of the local community through existing planning codes.

Some renewable energy developers, including Scottish Power, began plans for a big expansion of onshore windfarm projects in anticipation of a government U-turn on support for wind power projects.

The chief executive of Scottish Power, Keith Anderson, said the decision to back onshore wind was “one of the first clear signs that the government really means business” on reaching its climate targets.

The Guardian

The energy industry is on war footing as it prepares to fuel the Coronavirus battle

When the commercial breaks during Coronation Street start, the UK’s electricity networks are braced for the spike in demand triggered by millions of households putting on the kettle.

That’s because the industry thrives on predictability – knowing where to direct electricity and at what times. All that is being turned on its head by Covid-19. As millions of people gear up to start working from home, energy suppliers are furiously modelling what these unprecedented patterns of demand could look like.

In Italy, where the country has been completely locked down since last week, electricity use has dropped. The centre of the outbreak, Wuhan in China, also saw a stark drop in energy consumption. But much of those falls came from the shuttering of heavy industry such as steel plants that have voracious appetites for energy.

More broadly, power and heat demand in the UK has been steadily declining for several months now as the result of an historically mild winter.

From October until the end of February, the country recorded a 2.5 per cent drop in power demand – the biggest fall in a decade, according to S&P Global Platts data.

Energy companies now have a new challenge. As the coronavirus escalates and scorches the global economy along the way, the networks and supplies responsible for ensuring the orderly transmission of power and heating are steeling themselves.

“They are well used to dealing with short-term disruptions and spikes, and to be honest I think they’ll be fine,” says Glenn Rickson, head of European power analysis at S&P Global Platts. “Whatever patterns of demand we see they’ll be war gaming and planning around, there won’t be a sudden spike for half an hour – it’ll be trends that are emerging over time.”

The way people consume energy at weekends may bear the closest resemblance to how electricity demand will change in the coming weeks and months, as more people stay at home.

Typically, weekend behaviours around this time of year lead to a 10 per cent drop in the average power demand compared to weekdays. But that is because people are more active on weekends. With many British people already choosing to not go out as they practice a form of social distancing, this may not hold true.

Also, as more and more workers base their professional lives from their homes, the demand for electricity will go up because they’ll be on their computers all day.

Residential demand for power accounts for about a third of the UK’s overall consumption. Industrial operations such as factories and plants account for another third, while commercial units such as schools and shops make up the rest.

Residential consumption is normally heaviest at night, when most people are at home, while the bulk of commercial and industrial demand comes during the day. As long as heavy industry in the UK remains open for business, Rickson says, energy companies are likely to see a lift in daytime demand as more people are at home instead of at work.

Offices are not likely to turn their lights and heating off completely, which would offset and be a boon for the energy suppliers from higher residential demand.

Another positive for the utilities is that the margins on residential energy are slightly higher than on the supply of commercial power, meaning for a time there will be more money coming in after a tough winter.

However, Rickson says that as soon as heavy industry begins to grind to a halt, as it did in Italy and in China, any gains from increased domestic demand will be completely wiped out.

After modelling the anticipated effects on electricity supply and demand of long-term mass self-isolation of the UK’s workforce, National Grid expects demand across the country to fall, company sources say. That is largely due to a significant reduction in industrial and commercial demand, which would likely be greater than the increase in domestic demand as people stay at home.

The Telegraph

UK coal-free fortnight claim ‘misleading’

The government’s claim that Britain went coal free for a fortnight last year was grossly misleading because power was being imported from countries burning large amounts of coal, according to a think tank.

A carbon border tax should be imposed to address these “hidden emissions”, according to the Centre for Policy Studies (CPS).

Ministers and the National Grid announced last year that the UK had gone two weeks without burning any coal to generate electricity. Chris Skidmore, who was energy and clean growth minister at the time, said in June: “Just last week we saw an 18-day run of coal-free days – something we haven’t seen since the dawning of the first industrial revolution.”

Tony Lodge, CPS research fellow and author of a new paper entitled The Great Carbon Swindle, said that the claim was false because during that fortnight the UK imported 40.4 gigawatt hours of coal-fired power from the Netherlands via an undersea interconnector. “It was not true and was grossly misleading,” he said.

Coal accounted for only 2 per cent of UK-generated power last year but 15 per cent in the Netherlands and 38 per cent in Germany. The UK imports 10 per cent of its electricity from Europe, primarily through interconnectors with France, the Netherlands and Belgium.

Mr Lodge said that UK generators and energy intensive companies had to pay carbon levies which were not imposed on imports. This undermined investment in UK generation and production and made it harder to finance new gas-fired power plants which would be much cleaner than imported coal, he added.

Emissions from imported goods and raw materials, including coal, steel and electricity, were not included in the UK’s official statistics used to judge progress towards its climate targets. “This hides the real picture in terms of emissions,” he said.

“Even as British pits have closed, we are still importing millions of tonnes from overseas for industrial use, in particular in the steel industry. This carries with it additional emissions costs, for example in terms of transportation.”

His paper calls for the introduction of a carbon border tax on carbon-intensive imports which would reduce global emissions and better support domestic industries. The tax would be based on the electricity mix of the exporting country, which would incentivise other countries to invest in nuclear or renewable energy.

The Times

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