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COP26, Net Zero Gas Pumps and an Energy Glossary

With the upcoming United Nations Climate Change Conference (COP26) taking place by the end of next week and the ongoing natural gas crisis in the UK, the topic of news over the past few days has primarily focused upon the net zero plan to become reliable on sustainable energy by 2050. Solutions to reduce reliability on fossil fuels has incentivised the promotions of green energy, highlighted in the home and building strategy and net zero plan documents published by the government this week.

The promotion of domestic decarbonising heat pumps, as an alternative to traditional gas boilers, was prominent in the home and building plan, highlighted by government backed subsidy of 5k to homeowners wanting to install these heat pumps within the next year. Additionally, plans to expand the electric vehicle (ev) network of charging ports and vehicle production, including a focus on ev public transport, became a large factor to impress foreign diplomats at COP26. The net zero electric grid plan to transition to a renewable national grid by 2035 appears to still be going ahead of the total 2040 net zero plan, with additional investment assisting in this transition. However, the discourse raised alternate voices who criticised that the increase in fossil fuel production before the net zero crossover could drastically affect the climate and that the heat pump campaign doesn’t have enough backing to effectively target a large portion of UK households.

These discussions will only grow across the COP26 conferences, and it is important to know the future of energy, however the energy discourse can often appear unattainable for those outside the energy sector, therefore beneath is an expanded list of energy terms in layman’s terms to further understand the conversation.

Energy Glossary Index

Argus-McCloskey Price Index (API) – The main index for NW European coal.

Amsterdam-Rotterdam-Antwerp (ARA) -The main coal delivery hub for NW Europe

Bacton Balgzand Line (BBL) – The gas interconnector between the UK and the Netherlands.

Balancing – A process of ensuring generation matches demand on a 24/7 basis.

Balancing Mechanism – The process of using Offers and Bids on expensive generator(s)- ensuring demand does not outstrip supply or vice versa in an electricity grid or natural gas pipeline network.

Baseload– The minimum expected customer power requirements at a given time. Baseload power is generally supplied from plants, which cannot be ramped up and down as quickly as peaking generation plants. As baseload demand is generally predictable and steady, it is less expensive than peak power. Power is often traded as baseload to denote a constant quantity of power over a period such as a day.

British Electricity Trading Transmission Arrangements (BETTA) – Sets out the rules of how participants can trade electricity.

Brent – The main global oil index, based on North Sea oil.

Capacity (Electricity) – The rated load-carrying capability of electrical equipment, such as generators or transmission lines, typically expressed in megawatts or megavoltamperes.

Capacity (Gas) – The rated transportation/storage/entry/exit volume of natural gas pipelines and caverns, typically expressed in millions of cubic feet per day.

Carbon Price Floor (CPF) – The UK government-defined minimum price for carbon

Carbon Price Support (CPS) – The UK carbon tax that is the top-up required on the market price of carbon to reach the CPF

Emissions Trading Scheme (ETS) – The EU-wide carbon market

European Union Allowances (EUA) -The units carbon is traded in the ETS – equivalent to 1t of CO2

Grid Code (GC) – Sets out the rules of how the Transmission System (TS) is used by participants/those connected to it.

Interconnector (IUK) -The gas interconnector between the UK and Belgium

Liquefied Natural Gas (LNG) – Gas that has been compressed into a liquid so it can be transported by boat.

National Balancing Point (NBP) -The UK gas hub and the name of the associated index

National Grid Transco (NGT) – Own and operate high-voltage Transmission System (TS)

Organisation of Petroleum Exporting Countries (OPEC) – A global cartel that includes the most of the world’s major oil producing nations.

Therm – The unit of volume gas is typically traded in – equivalent to 29.3KWh or 2.74m3

 

Additional article reading based on the topics of this blog.

(https://www.current-news.co.uk/news/5k-heat-pump-grants-key-heat-and-buildings-strategy-commitment , https://www.current-news.co.uk/news/government-publishes-net-zero-strategy-in-substantial-step-forward , https://www.energylivenews.com/2021/10/21/leaked-documents-show-nations-do-not-want-to-cut-fossil-fuels-ahead-of-cop26/ )

UK Energy Crisis – A Culmination of the Energy News over the Past Week.

In this week’s blog post, we’re showcasing the most relevant news regarding energy throughout the past week.

Business Affected by Energy Issues

It has been an incredibly interesting yet devastating week for the energy sector with many more UK based suppliers ceasing to trade due to the current energy climate. Up to now twelve UK energy suppliers have closed this year, with a further two in Pure Planet and Colorado energy confirming the end to their business today (14/10). This has caused disruption to over two million UK customers whose energy supply will be transferred to a new company by regulatory department Ofgem. Furthermore, the future for smaller energy suppliers is looking sombre, as it has been reported that UK gas shipper CNG has communicated to up to fifteen domestic energy suppliers that it will no longer be providing energy to themselves, increasing the pressure during this unstable climate.

Additionally, energy intensive industries have been confronted with rising energy bills and in some cases have paused production or ceased trading. The increased costs could be passed onto customers or even cause job losses in some industries. Other business utility bills are suggested to rise through this next yearly quarter, even if it’s as limited as utilising energy for restaurants, cafes or heating up offices. Therefore, proving that this energy issue is an important topic which affects more than those directly in the energy sector.

If you are a business worried about the rise in energy, feel free to get in contact to discuss the increase in utility prices and find out if there is a best deal while everything is rising.

 The Rise in Market Price

The rising market price for energy, which has increased 250% since the start of the year, has been caused by a myriad of factors. The supply and demand issue has increased the prices tenfold, as our return into a normalised post lockdown society has been halted by a limit of worldwide gas and energy supplies. Stored gas levels have been increasingly lower than normal as a direct effect of Europe’s cold winter. In addition, this summer reported a lack of windy days which has limited windfarm output and created higher reliability on traditional energy. Not to mention, a multitude of smaller issues, including flooding in Chinese coal mines and a fire at a nation grid site. All these factors have created a lower supply and a higher demand, riding up the market price, especially on natural gases. This has come to a point where even large energy supplier E.ON has updated it website to read “unfortunately, we are currently unable to offer you natural gas products”.

Resolution

Due to the current energy crisis, this discourse has been prevalent throughout the news and the government for the past few weeks with both business secretary Kwasi Kwarteng and PM Boris Johnson commenting on instant and future solutions to assist Britain’s energy issues. On Monday 11th October, Kwarteng had issued a formal proposal to the treasury to assist propping up energy intensive businesses with state backed loans. These loans would assist with energy bills through the next quarter until the market price decreases, which is appearing to be around March 2022.

Additionally, Britain’s energy supply issues may have to be supported by alternative countries, such as Russia who currently have some of the largest gas deposits in the world. The thousands of kilometres of pipelines which supply Europe could assist with the quantity of gas required for the UK.

Renewable Energy

The current energy issues the UK are experiencing have become a catalyst into the conversation of renewable energy and the net zero energy plan. At the end of last week, PM Johnson and business secretary Kwarteng pushed forward the plan for a decarbonising net zero electrical grid from 2050 to 2035. The tumultuous period in the sector has accelerated the importance of renewable energy, with plans to increase an excess in solar and wind power reliability, increasing renewable hydrogen and assisting Britain to avoid future energy issues. Furthermore, energy suppliers Octopus have been awarded large financial reward to invest in renewable projects throughout Europe. It appears that the focal point for the future of energy is renewable.

News Sources Referenced:

(https://lnkd.in/gyKPhcBn , https://lnkd.in/gbUui63T, https://www.current-news.co.uk/news/net-zero-electricity-grid-by-2035-target-announced-to-strengthen-britains-energy-security , https://lnkd.in/eJ65DcPa , https://lnkd.in/d7YWG5Xn , https://www.bbc.co.uk/news/business-58090533, https://www.bbc.co.uk/news/business-58879101 )

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Jobs4Football Partnership

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