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UTILITY WEEK | DECEMBER 2020 | 9 …and what they mean What they said National Grid ESO: "An electricity margin notice is a routine signal we send to the mar- ket to indicate that we'd like a larger cushion of spare capacity, and does not mean elec- tricity supply is at risk." Paul Verrill, director of EnAppSys, warned: "This doesn't seem to be a one-off… These shortage events look increasingly com- mon in the market and should be expected to continue throughout the winter." What this means Experts are divided on whether this situation arose because of a unique combination of events or if, as Verrill suggests, this is a sign of a longer-term problem. National Grid was faced with very low winds at the same time that several generators were offline and there was also a shortage of supply from intercon- nectors. It was also wrapped up in general uncertainty about the impact on demand of the second England-wide lockdown. However, Verrill says that there is no clear strategy in the short term to cope with the closure of fossil fuel power stations that have become economically unviable. He points to the further potential for periods of very high prices and potential loss of supplies as a result. ICIS managing editor for energy Jamie Stewart says that in this instance the market worked exactly in the way it is supposed to in order to plug the gap. What to look out for Just as with the blackout in August last year, the events of November have once again highlighted the growing importance of flex- ibility to the smooth operation of the energy system and the valuable contribution that consumers could make on the demand side of the equation. Ovo Energy said the "supply crunch" elicited the "biggest ever mobilisation of UK customers" to support the power grid as part of its fledgling vehicle-to-grid (V2G) programme. If fitted with the technology, the supplier said, even the UK's current electric vehicle fleet of just 164,000 could have pro- vided up to 200MW of flexibility – more than a quarter of the largest deficit forecast in the notices. and whether they justify the marketing of "green tariffs" is a source of contention among energy retailers. Anderson and Dav- enport have both been vocal opponents to this practice, claiming that retailers who are not producing their own renewable power, or sourcing it directly, are misleading the public by boasting of green credentials. But opponents counter that no supplier can claim to be directly sourcing green energy for each customer, and that for fledgling suppliers, investing in generation or power purchase agreements is simply not viable. What to look out for Whether or not the CMA does touch on energy in its probe, there are likely to be precedents that will be set through this investigation. Ofgem is also taking a keen interest in the subject. Meanwhile, the debate is likely to continue in the sector. While calls for greater transparency on green tariffs is welcome, there is equally a danger that the public sees the sector squabbling among itself and becomes dis- engaged from the subject completely. get to net zero. It is also a plan that makes it clear that improving our natural environ- ment also has real and long-term benefits in reducing carbon usage – making treatment easier, less reliant on high-carbon use pro- cesses and with less by-products." What this means A year on from the water sector's bold state- ment of intent in setting its own 2030 net- zero deadline there has been little in the way of tangible detail of how it will arrive at its stated destination. This route map fills in some of the gaps but is also open that much of the progress will depend on how fast decarbonisation technologies come online and what the wider net-zero strategy is. What it does pledge is that companies will con- National Grid tinue to invest in their own renewable energy generation with a goal of having 3GW of solar and wind generation by the end of the decade – enough to meet 80 per cent of the sector's power demand. It will also expand biomethane production as part of the waste- water treatment process. It pledges to "save water and energy with smarter and more effi- cient networks and new strategies to tackle leakage". However, there are questions marks over how the sector's fleet of HGVs and LGVs will be decarbonised – this is le at a reference to conversion to "alternative fuel sources". And on its topline pledge, to reduce carbon emissions from operations, the target is currently set at a 60 per cent, with the rest to be offset. What to look out for Water companies will now use the route map to build their own detailed net zero action plans, taking into account the strategies of councils in their regions, the local distribu- tion network operator and environmental groups. However, with the clock ticking towards 2030 and RIIO-ED2 business plans still in their very early stages, the water sector will have to plough its own furrow in many areas. The fallout from the Competition and Markets Authority's final determinations on the PR19 appeals and Ofwat's approach to the PR24 price controls are likely to have a major impact on spending in these areas. Are consumers being misled over whether 'green' electricity comes from renewables sources as they would understand it? Stay abreast of all the news, all of the time: www.utilityweek.co.uk