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About generation

One of the most significant reports to be published this year was the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Global Warming of 1.5 °C. This report highlights the impacts of a 1.5°C increase to global temperatures with the IPCC warning that we only have 12 years in which to avoid reaching the upper 2.0°C limit set out under the Paris Agreement. Although 0.5°C doesn’t sound like a significant difference, the impacts are extreme, with the IPCC report forecasting coral reefs decreasing by up to 99%, extreme weather events occurring more frequently and ice shelfs melting more rapidly. This report brings home the urgent need to tackle climate change: an endeavour of which the power sector is at the heart. Decarbonisation of our sector is already fully underway and will provide a route toward emissions reductions for other sectors to follow. 

2018 was kicked off by a long-anticipated announcement from the Prime Minister confirming that coal-fired power stations would not be permitted to generate after 2025. A significant milestone for the UK; a nation which not so long ago relied on coal for the majority of its power needs. Unsurprisingly, records continue to be broken for the deployment of renewable generation and batteries as well as the increased usage of Demand Side Response (DSR) with all increasing through 2018.  We’ve also had some less expected outcomes with the Capacity Market T-4 auction clearing at a record low price of £8.40kw/y.
Policy development has been particularly busy over 2018 with a significant amount of new and existing work streams demanding more time and resource from the Power Team at Energy UK. Although 2018 seems to have created more uncertainty for the sector, I’m optimistic that next year will start to set out the future direction for the industry.

Energy UK produced a very influential position paper setting out our key asks for the EMR 5 year review, which later fed into BEIS’s call for evidence. On a broader level, the future of carbon pricing is one of the biggest uncertainties facing the sector currently and Energy UK has been busy setting out our preferred options. These have been discussed extensively with BEIS, HMT and ministers to make sure they are understood including the impacts of dropping out of the EU ETS without a suitable alternative. Energy UK has also partnered with The Crown Estate and BMAPA to commission a socioeconomic study of the seabed, detailing the economic and social benefits of marine industries including coastal and offshore energy. The world of network charging is also going through a substantial transformation, with both the electricity and gas charging undergoing significant changes to how and to whom charges are applied. The reform of ancillary services is still underway, with Energy UK setting up a new working group to specifically follow this work stream and drive forward change. Finally, Ofgem have signalled that Secure and Promote will be removed with a new scheme being developed next year.

Furthermore, we’ve also been successful in being appointed to Ofgem’s Electricity System Operator Performance Panel and the governments CCUS Task Force.

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