Utility Week

UTILITY Week 16th December 2016

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UTILITY WEEK | 16TH - 22ND DECEMBER 2016 | 13 Policy & Regulation This week Auction secures just one new CCGT plant 333MW plant at King's Lynn in Norfolk is the only new-build plant to be offered a contract The latest capacity market auction has failed to clear at a high enough price to secure the significant volumes of new high- efficiency gas generation the government wants built. A 333MW power station that Centrica is developing at King's Lynn in Norfolk was the only new build combined cycle gas turbine (CCGT) plant to be offered a contract. Almost 10GW of potential new CCGT capacity dropped out of the descending clock auction as it cleared at a price of £22.50 per kilowatt per year (/ kW/yr). In total 52.4GW of de-rated capacity secured contracts for delivery in 2020/21, including 44.5GW of existing gen- eration and 3.4GW of new build generation – up from 2.4GW in last year's four-year-ahead (T-4) auction. Although only one new build plant secured an agreement, CCGTs were the dominant technology in the auction, winning contacts worth a total of 22.6GW. They included the 468MW Baglan Bay plant that Calon Energy is refurbishing, but not SSE's 1GW Peterhead plant, which failed to win an agreement. Small-scale diesel generators appear to have done slightly less well than in previous years. Analysis by environmental think tank Sandbag shows just 76MW of known diesel generation secured contracts. A further 474MW of new small-scale generation, for which the fuel type is not known, was also successful. Storage bagged 3.2GW of contracts – including 500MW for new batteries – and demand-side response 1.4GW. TG ENERGY Hendry completes tidal lagoon review Former energy minister Charles Hendry has completed his inde- pendent review into the feasibil- ity of tidal lagoons in the UK. "In the course of the review I visited Swansea, Cardiff, Newport, Liverpool, Bristol and Sheffield," said Hendry. "I had active and expert engagement from across industry and in particular from the team at Tidal Lagoon Power; and I received almost 200 responses to my call for evidence" As well as looking at the viability of tidal lagoons, the review examined supply chain opportunities, potential financing structures and whether a first-of- a-kind project could be delivered through a competitive process. The Department for Business, Energy and Industrial Strategy will consider the findings of the review before giving its response in "due course". ENERGY NI needs stronger focus on heat Northern Ireland must focus more on heat if it is to have any impact on emissions and decar- bonise its energy system. Almost half of the country's demand for energy is for heat, according to Patrick Keatley, a research fellow at the University of Ulster's Centre for Sustain- able Technologies. Speaking at an energy policy conference in Belfast, he pointed out that the country is not going to achieve its target of 10 per cent renew- able heat by 2020. "To have a real impact on emissions and a real impact on decarbonising our energy sys- tem, we need to have a stronger impact on heat," he said. "There is policy incoherence within the [Northern Ireland] executive on this issue, and there has been a lack of joined-up thinking between different departments until now." WATER Regulatory change 'inevitable' for water Disruptive regulatory changes in the water sector, especially in the upstream and network segments, are inevitable and will "drive new business models". Further regulatory and leg- islative reform and willingness from companies and investors to explore new opportunities will be needed to facilitate the intro- duction of these business models effectively, according to a report from KPMG for Affinity Water. The report looked at "alterna- tive models" that could help address challenges such as climate change, population growth, the need for increasing resilience, and rising customer expectations. New gas turbines are proving elusive Political Agenda Mathew Beech "Green gas has been left somewhat in the shade" As the energy storage band- wagon has been gaining speed, and low-carbon generation chugging along relatively stead- ily, green gas has been le some- what in the shade. However, this could be about to change. Former shadow energy sec- retary Caroline Flint has taken up the green gas mantle and set out a four-point plan to help it "realise its potential". She, naturally, has the back- ing of the Anaerobic Digestion and Bioresources Association has spoken of his determination to ensure the UK hits its carbon budgets and plays its role in tackling climate change. Putting some departmental focus behind green gas, espe- cially given that there is growing and cross-party support for the technology, would be warmly welcomed. Plus, for the government, it would help solve security of sup- ply problems, boost UK business and the economy, and tick the green agenda box. (ADBA), but also that of Mat- thew Bell, chief executive of the Committee on Climate Change, who said that AD will have a significant role in helping the UK meet its carbon budgets. There is also growing momentum in the sector, as it has doubled in size over the past 12 months, with almost 90 plants injecting green biometh- ane into the gas grid. The sector will be looking to business and energy secre- tary Greg Clark, and the BEIS ministerial team, to pick up on the good work and help push it forward. So far, Clark has been quiet on the issue of green gas, but

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