Do we need an independent system operator?

Calls are growing for the UK electricity system to be managed by an independent system operator (“ISO”) whose activities are separate from the ownership of the wires themselves. Such a change would require nationalisation of the system operation activities of National Grid, and the creation of a new regulatory framework for the electricity system. This would…

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Subsidies central: electricity markets need fundamental reform to remove distortions

Subsidies and extra-market support now underpin every part of the UK electricity market, and as a result, some technologies benefit from double payments and others double charging, and since the double payments are going to diesel generators and the double charging to battery storage, the system is creating perverse incentives that conflict with core government policy. Attention…

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Energy market innovation: timing is everything

The past few days have seen Tempus Energy surrendering its supply licence in order to focus purely on wholesale market trading, and Tidal Energy, the Welsh tidal stream technology company go into administration. Analysis by the Financial Times indicates that even in mature segments of the energy sector, in particular end-user supply, new entrants struggle…

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Solar + Storage: the other side of the story

In this second post on the viability of solar + storage (first post here) I examine the conclusions of the Aurora Energy report, which presents a rather more optimistic view of the prospects of the combined technologies, claiming that the cost of backing up solar generation and integrating it into the energy system was negligible,…

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Shining a light on solar + storage

Solar + storage, the combination of solar power and electricity storage, is seen by many as the Holy Grail of the energy markets and the key to a secure, low carbon future. However two recent reports provide conflicting views on whether this is a realistic prospect or simply another myth. In its analysis, the Adam Smith Institute…

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Decarbonising with hydrogen: more hot air?

Hydrogen gas has been mooted as a possible solution to the challenge of decarbonising heating, one of the major sources along with electricity generation and transport, of carbon emissions. Notably, the city of Leeds in the UK is investigating converting its entire gas network from natural gas (which is mostly methane) to hydrogen. The question is…

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Should the Carbon Price Floor be scrapped?

The Carbon Price Floor (“CPF”) is a UK government mechanism designed to support decarbonisation by making it more expensive to generate electricity with carbon-intensive fuels. The doubling in the CPF in 2015 from £9 / tonne to £18 / tonne means the CPF now represents about 34% of the marginal cost of a coal-fired generator and…

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EFR: what we learned from the first auction

The first auction for enhanced frequency response (“EFR”) in the UK closed at the end of August, with just over 200 MW being secured by National Grid under 4-year contracts, at unexpectedly low prices. All of the winning sites were as yet un-built battery storage projects, and there were a significant number of similar projects…

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Transmission matters: it’s not just about capacity

Transmission systems are key to delivering security of supply and yet tend to be treated as an afterthought – note for example Germany’s massive deployment of renewables in the north of the country without a corresponding investment in the necessary transmission capacity to deliver it to the demand centres in the south. As noted in my…

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