Utility Week

14 | 2ND - 8TH AUGUST 2019 | UTILITY WEEK Policy & Regulation White paper special report Low carbon heat: 4m homes by 2030 Energy white paper says 40GW of low-carbon baseload generation will be required by 2050 Up to four million homes must have decarbonised heating systems by the end of 2030 and 40GW of low-carbon baseload generation will be required by 2050, according to the leaked contents of the unpublished energy white paper. Former business, energy and industrial strategy (BEIS) secretary of state Greg Clark, who was replaced by Andrea Leadsom in Boris Johnson's cabinet reshuffle last week, outlined the white paper's key points in a briefing with energy executives last Monday. A source at the briefing told Utility Week that these include decarbonising the heating systems of between two and four million houses by the end of 2030 and mak- ing energy efficiency a national infrastructure priority. It also says up to 40GW of new low-carbon base- load, or what it describes as "firm" generation, will be required to meet the net zero emissions target, compris- ing new nuclear and power stations fitted with carbon capture, usage and storage (CCUS) technology. The white paper features a "big emphasis" on CCUS, according to Utility Week's source, including a target to capture ten million tonnes of carbon by 2030, which will require more than the one plant currently planned to come on-stream in the mid-2020s. The document is divided into four sections, which focus on the home, the workplace, how energy is deliv- ered and how it is sourced. It also reaffirms the existing target of 30GW of offshore wind by 2030 and discusses extensively how to boost investment in innovation. In a speech last autumn, Clark said the white paper would be published this summer, but it did not appear before he le– the government last week. DB ENERGY Claire Perry steps down at BEIS Claire Perry has stepped down as clean growth and energy minister to oversee the UK's bid to host next year's UN climate change talks. The Devizes MP announced last week on Twitter that she had accepted prime minister Boris Johnson's invitation to become president of next year's COP26 talks, which the UK is bidding to co-host with Italy. Downing Street has announced that Spelthorne MP Kwasi Kwarteng has been appointed as a minister at the Department for Business, Energy and Industrial Strategy (BEIS), but it had yet to confirm details of his portfolio as Utility Week went to press. He was previously a junior minister in the Depart- ment for Exiting the EU. Nadhim Zahawi, who has been appointed parliamentary under secretary of state within BEIS, has tweeted the details of his portfolio, which includes responsibility for the nuclear industry. ELECTRICITY Leadsom 'must back onshore wind' Andrea Leadsom has been put under immediate pressure by the BEIS select committee to reverse the government's "ideological opposition" to onshore wind. Rachel Reeves, the commit- tee's chair, wrote last week to Leadsom following the latter's appointment as secretary of state for BEIS. In her letter, Reeves calls for the department to ease planning restrictions on onshore wind. Combined with this technology's exclusion from contracts for difference auctions, these curbs "severely limit" deployment of what the Leeds MP describes as the "cheapest form of electricity generation in the UK". The letter also calls on Leadsom to put pressure on the Treasury to ensure that it examines the benefits as well as the costs of decarbonisation when undertaking its review of the transition to net zero. ENERGY Efficiency projects 'not yet ready' for capacity auctions Energy efficiency projects are "not yet ready" to compete in the capacity market, BEIS has announced. While launching a call for evidence on the creation of new markets for energy efficiency, the department said it had reached the conclusion based on a multi- year trial simulation. BEIS has also launched a consultation on a new cap on installations participating in the capacity market. The new cap is in line with the EU's Clean Energy Package, which states that existing installations and new-build projects should emit no more than 550g of carbon dioxide per kilowatt-hour. Clark: briefed key points before he was replaced The Department for Business, Energy and Industrial Strategy (BEIS) has outlined plans for how the regulated asset base (RAB) model could be applied to help finance nuclear projects. The publication last week of a consultation paper on the RAB model for nuclear follows the recent collapse of plans by Hitachi and Toshiba to build new nuclear power plants ELECTRICITY Regulated asset base model could help nuclear plants over the line in Anglesey, Cumbria and Gloucestershire. Under the RAB model, which has most notably been used in the UK to finance the building of the Thames Tideway "super- sewer" in London, developers of infrastructure projects can recoup revenues before they are operating. On conventionally financed projects such as Hin- kley Point C, developers have to wait until they are in operation before they can get paid. In its paper, BEIS states the RAB model could reduce the cost of raising private finance for new nuclear projects. However, the document acknowledges the risk with this approach is that suppliers and ultimately their consumers may fund construction of a plant that is subsequently not completed. The paper also moots a government support package, which would be activated in certain circumstances such as costs overrunning. Sue Ferns, senior deputy general secretary of the union Prospect, said: "While the RAB model is not a perfect solution, it is an approach that could get nuclear projects over the finishing line."

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