Announcement from Dept Energy Security and Net Zero; 12th March 2024.

What follows is based on the DESNZ Official Press Release, and the quotations below it from Energy Sector leaders.
I have not yet gone through the actual 'REMA Consultation Document'.

Overview: During the past 8 years Britain has made significant progress towards a new energy strategy:

• Adoption of Future Energy Scenarios with goals defined for 2035 and delivering Net Zero (CO2 emissions) by 2050
• Setting constraints on DNO's revenue streams (RIIO-ED2 Agreements) unless they hit targets
• Incentives to migrate to domestic heating using heat-pumps via the Boiler Upgrade Scheme
• Incentives to adopt electric vehicles, a mandate for domestic Smart Chargers, and the roll-out of public charging points
• Establishing the new Independent System Operator and Planner (ISOP) to manage all British energy networks
• Significant increase in the proportion of electricity generated from renewable sources
• Scotland and South West England now export more renewable electricity than they import from the national grid

Having placed all the ducks in a row, this Announcement reads as if the government has given up, and thrown in the towel.

1: New gas-powered electricity generation is to be promoted:

The Regulations are to be changed (broadened) such that new gas-powered generation need not capture carbon emissions or implement other net-zero measures when initially constructed:

2: There is (finally) recognition that energy from renewable sources is generated on the extremities of the main national grid network. That requires a change in pricing structure so that those closest to the sources can buy that electricity at lower rates:

The proposal has been to shift to a Nodal Pricing model, whereby consumers closer to the generation source will be charged at a lower rate per Kwh, based on the half-hour tariff blocks inbuilt within Smart Meters. However:

The strategy is being changed such that the Locational Pricing system will be applied only to the wholesale market, thereby allowing Energy Suppliers to directly benefit from lower Zonal Pricing, rather than their customers. The quote suggests that these financial benefits will still bring benefits to consumers and 'innovators'. We need to read the actual Consultation document to see whether that observation is valid, and can be delivered.

3. There is also a comment from National Grid Electricity Systems Operator (ESO).
I'm slightly puzzled by this. ESO's role is being taken over by the new ISOP during 2024, and National Grid ESO will no longer have a role to implement anything in the national consultation being announced.

That quotation suggests that the 'innovators' being considered are working within very large-scale (expensive) technologies.

Such a strategy ignores all the consumer-led steps towards Net Zero, which will not require massive incoming investment (from overseas?).
It's the consumer-led initiatives which are presently lacking in the Future Energy Scenarios. Today's Announcement indicates DESNZ doesn't think that ISOP can (securely) deliver Net Zero by 2050 by continuing the System-led Scenario, it nevertheless wants to persist in shoring up that particular transformation strategy.

@transparent I’ll keep my investment with Ripple Energy with digits overlapping…. Regards, Toodles

I’ve been educating myself on electricity supply issues and the above research briefing is a balanced summary. Newspapers and statements from companies involved are rarely balanced. One point I hadn’t previously appreciated was that the biomass power stations (useful for intermittent demand) weren’t running because the market price was above their strike price and they would have to pay back. Presumably the price of wood pellets had gone up inline with other consumables. 

This comment was also useful since I recalled reading some comments about government subsidies previously. https://www.camecon.com/blog/details-matter-what-you-need-to-understand-about-yesterdays-offshore-wind-stories/ Although old this point is still valid.

thanks to @transparent for prompting this interest

Or is refusal to burn wood when the market price is above the strike price (and the system needs power presumably) simply gaming the system to maximise profits (loop hole there!)

It has been a while since we have spoken about the direction of electricity tariffs. Do we think they will still decrease slightly and then increase heading into autumn and winter?

I am also still surprised that while electricity tariffs continue to be burdened with environmental levies, fossil fuels, which remain the predominant heating source in UK homes, are still exempt from these extra charges. Is this likely to change in 2025?

@editor Not to beat about the PV panel, YES, I think they will continue to lay levies on electricity and the overall price will modulate seasonally. Toodles.

@editor risks of "black swans" remains tricky. Lots of unknown unknowns! e.g.

gas prices have risen sharply and may stay elevated - or go even higher?
Ukraine?
China/Taiwan?
Middle East?
Hard winter?

Miliband clearly on a zealot mission to kill fossil fuels with little care for a transition so it must be likely that gas will get an environmental levy. But I have no faith that will lead to lower levies on elec!

Personally if I was on standard tariffs I would seriously consider other options for fixed tariffs. However with PV, batteries and ashp i'm happy enough with Agile import and fixed (15p) export.

But will be watching prices in case risks makes it necessary to switch from Agile to Fixed.

Previously I was on Tracker import and will need to see if I can timeshift sufficiently in winter to keep my average Agile cost below Tracker. So far over the last 5 months since switching the average import on Agile is under 11p (+vat) vs previous 3 months on Tracker was ave just under 17p.

5 months imports over 2000 kwh as it includes car and also charging batteries at cheap rates for usage by myself or even exporting at 15p when worthwhile. i tend to only force discharge/export batteries when opportunities to charge them at 5p or less. Occasionally we've seen negative rates even.

During the winter i may have to make sure I boost heating at cheaper periods and use batteries during peaks etc. I don't think I can automate fully as I have an LG ashp with older controller. Hopefully manual interventions can be done without taking up tooooo much of my life!

Posted by: @tim441

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Miliband clearly on a zealot mission to kill fossil fuels with little care for a transition so it must be likely that gas will get an environmental levy. But I have no faith that will lead to lower levies on elec!

You've raised a point that had crossed my mind a few months ago while pondering tariffs, and I didn't see why the government would remove the environmental levy from electricity when they could level out the heating field by slapping the environmental levy onto fossil fuels used for heating (gas and kerosene).

@editor I can’t believe that any government would try to level the playing field by INcreasing the price of gas by adding a levy - I mean … that wouldn’t be cricket would it ol’ chap? (Even if you have started the term with a £22bn deficit! that you knew not what of)😉 Toodles.

There is plenty of analysis (universities and consultants) which showed the UK may have a target of 2035 to be net zero on electricity production (and that them enables everything else) BUT with present rate of progress 2050 is when it will be reached. And since we really do have to be net zero on all sectors by 2050 and sooner would be better for our health and environment. So a bit of zealotry from anyone in government would be good whatever their party.

It probably needs a lot of government levers pulling to change the rate of progress, one of which should be carbon tax (and other levies) on gas too. Probably done in the first budget so we’ve time to forget before the next election. I suspect there will be social levies too so that the fuel poor can heat their homes paid for by those who can afford it on their bills.

If the result is a change of electricity/gas price ratio then that will help heat pump take up, but the age of cheap fuel is over for the foreseeable future as far as I can guess.

Scotland is almost always providing mostly renewable energy. Our current mix is 96% wind the rest hydro. Plenty more wind especially offshore coming on stream. Big subsea Giga Watt interconnect between Scotland and England past all the permissions hurdles. Next major hurdle is the transmission lines between west coast and east coast all the NIMBYs are out complaining.

Levi on gas vs electricity 

6% levi on gas, 16% on electric

I don't think all the components should solely fall onto gas. For example the warm home discount is split evenly across gas and electricity, so heat pump owners already pay less than dual fuel households. Even this feels a bit strange,why should a heat pump owners contribute less to helping poor households generally with their heating costs over winter? I suspect heat pump owners generally are altruistic vs the general population regarding supporting vulnerable households.