Utility Week

UTILITY Week 13th January 2017

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UTILITY WEEK | 13TH - 19TH JANUARY 2017 | 17 Policy & Regulation Market view A s 2016 drew to a close, the future of the UK's energy landscape was unclear. Arguably the biggest factor in this uncertainty is the UK's vote to leave the EU, and the potential impact this decision will have on the renewables sector. Unfortu nately, announcements in the autumn state ment did little to clarify matters, with most of the important policy issues for the direction of the UK's lowcarbon future delayed until later budget announcements. The continued lack of certainty about future of UK energy policy has been vocal ised by many, especially businesses which feel "disappointed at the lack of focus on energy", according to an open letter to the Department for Business, Energy and Indus trial Strategy (BEIS). Over recent years, a large proportion of UK energy policy has been focused on the transition to a low carbon economy, and heavily influenced by EU policy. This low carbon focus has been successful, with renewables now supplying 83.3TWh of elec tricity – this was a quarter of the UK's energy requirement in 2015. For power, the UK is on track to meet its EU renewable targets and, given the current scale of industry invest ment in the UK and the momentum gained, this progress is not expected to grind to a halt once the UK breaks away from the EU. It is worth remembering that the UK already has energyfocused commitments that do not stem from EU membership, such as the 2008 Climate Change Act (CCA) and the recently agreed COP21 Paris climate agreement. These agreements will provide welcome international pressure to ensure the UK does not lose its motivation to con tinue pursuing a low carbon economy. How ever, the target year of 2050 for the CCA is over three decades away and a lack of more immediate pressure could result in the UK slipping in its current rate of renewables deployment. Against this backdrop of momentum in UK renewables, it would be easy for us to have a rosetinted view of the sector. Despite the encouraging rate of progress in renew able generation at present, most of the UK's 33GW renewable capacity consists of wind and solar schemes, which are widely criticised for their intermittency. Other low carbon technologies, such as energy from waste, wave and energy storage, could help address the intermittency of wind and solar. However, the EUdriven target for 30 per cent of the UK's electricity to be supplied from renewables by 2020 has contributed to widespread grasping of the quick and easy low hanging fruit – and this has led to prob lems when the sun is not shining and the wind is not blowing. Given that it is likely the UK will not be bound by European targets on leaving the EU, pressure to increase renewable capac ity quickly will be lied. This presents the opportunity for us to develop a more diverse mix of low carbon technologies driven by the 2008 CCA (target date 2050). Among the uncertainty postBrexit, it is no secret that electric vehicles are set to be the next gamechanger in the automo tive sector – a real challenge for our already struggling national grid. Ralf Speth, chief executive of Jaguar Land Rover (JLR), recently advised that big Renewables' long-term future Free from EU targets, the government should use Brexit to reaffirm the UK's commitment to a low carbon economy and pursue a more diversified portfolio of renewable generation, says Chris Evans. local infrastructure improvements would be needed to support JLR's planned Midlands expansion, because currently the grid infra structure in the Midlands is incapable of supporting its plans for growth and invest ment in the area. The UK desperately needs a strategy to create a more stable national grid, capable of supporting our everincreasing energy demands. Entering 2017, it is vital that the momentum delivered by EU energy policy to date is maintained in order to negate the risk from EU targets no longer applying to the UK. As part of this, BEIS needs to deliver a longterm vision for energy policy with a clear framework of delivery, ahead of the 2017 budget, rather than more shortterm changes. The UK has an opportunity for the energy industry to become the engine room of the UK economy. However, before this can happen, energy policy needs to evolve to make low carbon energy the most attrac tive option for industry and energy suppli ers by being costeffective, secure and easily accessible. Chris Evans, deputy managing director, Rolton Group ELECTRIC CAR REGISTRATIONS IN THE UK, 2014-16 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2.0% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8 0.6% 0.4% 0.2% 0.0% Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 1.1% 1.3% 2% 0.9% 1.2% 0.9% 0.9% 1.1% 1.3% 0.8% 1.3% 1.4% 1.2% 1.2% 1.2% 1.3% 1.4% 1.2% 1.3% 1.7% Source: Society of Motor Manufacturers and Traders, December 2016 1.4% 0.7% Electric car registrations Percentage of total registrations

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