Utility Week

UTILITY WEEK | 31ST JANUARY - 6TH FEBRUARY 2020 | 21 Policy & Regulation the government will provide for the few new nuclear projects still in the pipeline. As well as replicating the design, EDF plans to minimise the costs of Sizewell C by transferring workers and equipment over from Hinkley Point C. The company says if a decision is not made in 2020 then the transition will be less smooth and costs will start to increase. Last year, the government consulted on proposals to introduce a regulatory asset model for ‚ nancing that would see consum- ers take on a share of the construction risks by starting payments to generators before the plants have been completed. BEIS o† cials recently reiterated that the clean, dispatchable power nuclear can pro- vide will be necessary to meet the net zero target, but how much ministers are willing to pay for it remains to be seen. Johnson has backed calls for a "nuclear renaissance" in the UK, although he seems more excited by the possibility of developing small modular reactors and achieving the "holy grail" of nuclear fusion than building conventional ‚ ssion power stations. Network charging regime One topic that will be of interest to all gen- erators will be Ofgem's continuing work to reform the network charging regime. Despite ‚ erce opposition from some quarters, the regulator con‚ rmed plans in November to " atten residual charges by applying them as ‚ xed charges on consumers. It is also reviewing forward-looking charges and network access arrangements and plans to issue its minded-to decision and dra" impact assessment in mid-2020. Those adversely a• ected by the changes to residual charges will be hoping this review will o• set some of the losses they are cur- rently anticipating. Technology co-location While certainly not new, Utility Week expects the trends towards "hybridisation", aggregation and revenue stacking to gather pace in 2020. Many companies are now shaping their business models around the co-location of multiple technologies, allowing them to share grid connections and minimise costs. Most notably, Scottish Power announced plans in December to install solar arrays and battery storage systems at its existing wind farms and carry this model forward to future projects. Firms such as Gridserve, Anesco and Pivot Power are also seeking to harness the synergies of hybrid projects. A growing number of smaller assets are also being combined into so-called virtual power plants. Several companies are active in this segment – Limejump and Flexitricity are already operating them in the balancing mechanism, worth hundreds of millions of pounds each year. However, since Decem- ber they have been able to do this without Utilities 2020 – exclusive to Utility Week members This feature article is drawn from Utilities 2020, a premium report examining what's going to be top of the agenda for energy and water rms in the year ahead, available exclusively to Utility Week members as a pdf download. This major report is an authoritative, in-the- know resource for members previewing the talking points, challenges, and to-do lists of senior utility managers. Contents include: The Big Picture; Energy; Water; and the Business Agenda. Find this report and all premium con- tent on our website: www.utilityweek.co.uk P ) 2 5 P P P 2 5 P 2 5 P ) 2 5 P 2 5 P 2 5 P 2 5 P ) 2 5 ELECTRICITY GENERATION MIX BY QUARTER AND FUEL SOURCE (GB) TWh per quarter Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019 becoming the supplier for the assets they are aggregating by registering as a virtual lead party. None have yet completed the process, but the ‚ rst are expected shortly. And the number of potential revenue streams they are able to stack is steadily rising. Flexibility auctions by distribution network operators are becoming larger and more frequent. Towards the end of 2019, Northern Powergrid announced a 100MW auction to help manage its network in the event of a fault, and at the beginning of the new year, Western Power Distribution announced a 344MW tender for constraint management – the largest to date. Meanwhile, the Electricity System Opera- tor has been working to overhaul its bal- ancing and ancillary services to make them accessible to a wider variety of technolo- gies, for example, by procuring frequency response more frequently and closer to real time. In 2020 this work will also include trial- ling an entirely new service for inertia. Squeezing the most value out of their assets will be essential for generators and developers, who face a ra" of challenges and uncertainties as they head out into 2020. Tom Grimwood, energy correspondent, Utility Week 25 100 75 50 25 0 Coal Oil Gas Nuclear Hydro (natural fl ow) Wind (onshore and offshore) and Solar Bioenergy Pumped storage (net supply) Other fuels Net imports Source: Ofgem

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