Utility Week

UTILITY WEEK | 27TH SEPTEMBER - 3RD OCTOBER 2019 | 17 Finance & Investment Cheap wind power will "open up the opportunity" to produce affordable green hydrogen using electrolysis, according to the boss of ITM Power. Chief executive Graham Cooley was responding to the results of last week's contracts for difference auction, which saw multiple projects – mainly offshore and remote island windfarms – secure agreements ENERGY Cheap wind power will enable the mass production of hydrogen at a record low strike price of £39.65/MWh (2012 prices). "Low-cost offshore wind generation is a game changer for renewables," Cooley told Utility Week. "It will enable the UK to produce very large amounts of green electricity in the 2020s and create a long-term pathway for utilising the North Sea's vast renewable potential. This will place the UK in a superb posi- tion to achieve net zero by 2050. "However, it will also cause greater variability, which will require much more substan- tial grid balancing solutions. Electrolyser technology is well placed to provide such services to the system operator. "So we expect the overall effect of having large amounts of cheap offshore wind power in the fuel mix will be to substan- Octopus and mayor set up green provider London mayor signs deal with Octopus Energy to launch council-owned green energy supplier Octopus Energy has struck an agreement with London mayor Sadiq Khan to create a council- owned green energy provider. The agreement to launch London Power marks Octopus' third such "co-branding" deal – it already has a deal with Marks & Spencer and recently acquired the customers of Co-op Energy. Octopus was chosen following a "rigorous open pro- curement process" conducted by City Hall and Transport for London, a statement from the mayor's office said. It added that any profit made by City Hall would be reinvested into the city to help tackle issues such as fuel poverty and making the capital a zero-carbon city. Customers will be able to sign up with the new sup- plier from December. It will offer a 12-month fixed tariff for electricity and gas, which will "always be within the cheapest 10 per cent of comparable tariffs available on the market". Stuart Jackson, co-founder of Octopus Energy, said: "With around 12 per cent of the capital in fuel poverty, never has a vital service like energy been so desperate for a new lease of life in London. London Power has the opportunity to turn around a strained system with world- class (and local) customer service, fairer prices for all and reinvestment of profits into environmental initiatives." Nina Skorupska, CEO of the Renewable Energy Association, said: "The launch of London Power demon- strates a milestone in London's journey towards being a net zero carbon city by providing consumers with the option to become socially responsible in their energy choices whilst economically benefitting themselves and their community." AJ ENERGY Scotland opens £30m fund for low-carbon heating The Scottish government has opened a £30 million fund for low-carbon heating projects announced by first minister Nicola Sturgeon earlier this month as part of its legislative agenda for the coming year. Applicants will be able to bid for grants for half the total eligible costs of their project, to a maximum of £10 million. "It's estimated that Scot- land's homes are responsible for the emission of six million tonnes of harmful carbon diox- ide into our atmosphere every year – 15 per cent of all emis- sions," said Scotland's energy minister Paul Wheelhouse. "To meet Scotland's ambitious proposed climate change targets, we estimate that nearly every Scottish home – unless already on a renewable heat supply – will need to have a change to its heating system by 2045, if not before. "The Scottish government is already making inroads to that target, by committing to ensuring that all new homes use renewable or low-carbon heat by 2024, but we also want to create an environment where existing homes transition to renewable solutions as well. "The problem is too big for the government to tackle on its own, so we are tapping into the significant expertise and talent that exists within Scotland – giving people the means to take the initiative and effect change through deployment of innova- tive, low-carbon approaches to heating." GAS Drax gains consent for Welsh gas turbine Drax has been granted a devel- opment consent order to build a 299MW open-cycle turbine at Abergelli Farm near Felindre in South Wales. The power station will pro- vide flexible back-up generation to fill the gaps in renewable output. Drax said it is expected to run for no more than 1,500 hours a year on average. Andy Koss, chief executive of the generation arm at Drax, said: "Securing this approval from the secretary of state is a crucial step in ensuring development of the new gas generation the UK needs to provide flexible power and system support services to the electricity grid as part of the country's transition to a low- carbon economy. "Rapid-response gas power stations are agile enough to ramp up quickly and support the grid at times of peak demand, making them highly comple- mentary to intermittent renew- able sources of power, like wind and solar." The power station will cost up to £90 million to build and could begin generating power as soon as 2022, subject to it securing an appropriate capacity market agreement. Khan: any profit will be reinvested into the city tially reduce the costs of green hydrogen production and mas- sively open up the opportunity for electrolysis." UK gas networks have been developing plans to decarbonise the gas grid by converting it to run on hydrogen. They initially envision the bulk of the hydro- gen being extracted from natural gas, with the resulting CO2 emis- sions being captured and stored. This week

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