local energy matters: scotland

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Scotland energy news

On 12 September a 20MW battery storage facility in West Lothian was completed, becoming Scotland’s first utility-scale battery facility. The facility is owned by The Renewables Infrastructure Group and developed by Renewable Energy Systems (RES), which said the Broxburn Energy Storage facility would provide “a crucial element to maximise the use of renewables” in the country, helping Scotland meet its decarbonisation goals. It has been estimated that the project could save the National Grid £200mn and provide demand response in milliseconds. This marks an important turning point for intermittent generation technologies, with batteries providing flexibility to manage peak demand periods. RES Managing Director, Rachel Ruffle, said: “Energy storage can play a large role in supporting the transition to a secure, low-carbon, low-cost energy system. The use of energy storage will allow for a greater penetration of renewables and can avoid costly grid upgrades – leading to cost benefits for all consumers.”

The Scottish Parliament’s Local Government and Communities Committee announced on 17 September that it is seeking views on a new target relating to the eradication of fuel poverty under The Fuel Poverty Bill. The bill sets a target for a maximum of 5% of households to be living in fuel poverty by 2040 in Scotland. A strategy and progress report on fuel poverty by the government will be published every five years. It also proposes to redefine the meaning of fuel poverty to appropriately assess the scale of the issue. Convener of the Committee James Dornan MSP welcomed the proposals but added: “It is the role of the committee to look at these proposals in detail to determine if the target is achievable and if the measures set out will make a real difference.” The call for views is open until 9 November.

Flexitricity, an Edinburgh-based demand response firm, has secured approximately £500,000 of funding from BEIS for its Quickturn project, allowing small-to-medium sized enterprises to participate in the UK’s balancing mechanism. The funding agreement was announced on 11 September, with Flexitricity planning to invest in flexible assets such as cold storage, air conditioning and heat pumps to manage energy demand fluctuations. Trialling of Quickturn will commence in H1 2019, with findings set to be shared in 2020.

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Tariff headlines

Wholesale costs rise above average tariff changes The cost of buying energy in bulk continued to increase in August. Prices rose by 6% above July’s prices, and 34% compared to the same time last year. In contrast to this, the average tariff price on the market increased by just 1% month-on-month and 6% year-on-year. More expensive bulk energy has reduced the margin which suppliers earn selling this on to customers. The assumed margin has fallen to £51 year-on-year. With non-energy costs – to pay for networks and other expenses – also rising, suppliers’ profit margins are decreasing.

Suppliers announce safeguard increases On 7 August, Ofgem announced that the level of the safeguard tariff cap, which controls the bills of four million pre-payment and other vulnerable customers, is set to rise from 1 October from £1,089 to £1,136/year for an average consumer. It said that the increase is due to rising wholesale gas and electricity prices. Following the announcement, eight national suppliers announced increases to their prepayment tariffs. British Gas, EDF, E.ON, npower, Scottish Power, SSE and First Utility all announced new tariff prices for October in line with Ofgem’s increased cap, at just £1/year on average below. Co-operative Energy was the only supplier announcing an increase which was lower than the cap, with a 4.2% increase to £1,129/year, £7 below the cap. Other suppliers do, however, continue to offer deals significantly cheaper than the energy cap – see our “best buys” section on pages 4,5 and 6 for the cheapest suppliers in the East of England.

Supplier smart strategies diverge A “smart tariff” uses a smart meter to determine how much electricity you’re using at times across the day. This could allow your supplier to charge you at different rates at different times, just like an Economy7 tariff. For example, this could make it cheaper to use energy overnight or at the weekend. British Gas once offered a tariff with completely free energy on Saturday or Sunday. Energy suppliers have recently demonstrated contrasting strategies in smart tariffs. Octopus Energy announced plans to expand its Agile time-of-use tariff, which changes prices every day, after its 500-place limit was “hit quickly”. E.ON also recently launched its Secure Bill tariff. Unlike Octopus’ constantly changing time-of-use prices, the Secure tariff fixes customers’ annual bills based on how much energy they used last year and guarantees that no matter how much energy a customer uses, the bill will remain the same.

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Scotland tariffs

In this section, we present the cheapest tariffs for various customer types in Scotland. These customer types are based on typical electricity and gas consumption values. The three main types of tariff are shown in the table below:

Tariffs are supplied to the North and South of Scotland by two different Distribution Network Operators: Scottish Hydro (North) and Scottish Power (South). As a result, tariff prices vary across these two regions and have been displayed separately in the best buy bubbles below. In September, the average price for the lowest cost SVT across all customer types is £812/year for Northern Scotland compared to £770/year in Southern Scotland. For fixed tariffs, lowest average tariff prices were higher, with the North receiving an average rate £58 more expensive than in Southern Scotland at £888/year. Outfox the Market was the cheapest supplier for all SVTs across the whole of Scotland in September, with fixed tariffs dominated by two suppliers; ENSTROGA in the North and USIO in the South. ENSTROGA was seen to significantly undercut the next cheapest supplier in the region – in the case of customer type B more than £95. For PPM tariffs, Our Power acted as the sole provider across the entirety of Scotland. Average prices for lowest cost PPM tariffs were recorded as £959 and £910 for Northern and Southern Scotland respectively. In September, households in Southern Scotland were always offered cheaper tariff rates than the North. This is likely due to higher network charges from Scottish Hydro, resulting in higher end prices for consumers.

Tariff Definition

Standard variable tariff (SVT) The “default tariff”. Also called “evergreen” because it doesn’t have a fixed end, and prices can be changed usually at a month’s notice – usually to increase the prices.

Fixed tariff A fixed tariff will usually have a set end date and set prices. Your supplier will contact you before the end of the deal to remind you of your option to switch; if you don’t, you will likely end up back on an SVT. Most common are one-year deals, but two- or three-year do exist.

Prepayment (PPM) tariff A tariff for customers with prepayment meters, which enables payment for energy in advance through ‘topping-up’ using prepay tokens, cards or a key.

Best buys in Northern and Southern Scotland

Supplier

PPM

Fixed

SVT

Key A. Smaller electricity-heated

Outfox the Market

£969

ENSTROGA

Our Power £900

£773

£905

Northern Southern

£814

£718

Outfox the Market

USIO

Our Power

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B. All other electricity-heated

C. Smaller non-metered fuel-heated

D. All other non-metered fuel-heated

£1370

£1279

£1109

Our Power

ENSTROGA

Outfox the Market

Northern

£1278

Southern

£1146

£1030

USIO

Outfox the Market

Our Power

£573

£527

£464

Outfox the Market

ENSTROGA

Our Power

Northern Southern

£538

£486

£434

Outfox the Market

USIO

Our Power

£779

£722

£624

Outfox the Market

ENSTROGA

Our Power

Northern Southern

£729

£657

£582

Outfox the Market

USIO

Our Power

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E. Single adults in social rented flats

F. Younger working families in medium-sized rented houses

G. “Average” mains gas-heated households

£1118

£1033

£1017

£849

£781

£748

Our Power

ENSTROGA

Outfox the Market

£1057

£976

£948

Outfox the Market

ENSTROGA

Our Power

Our Power

ENSTROGA

Outfox the Market

Northern Southern

£822

£758

£725

Outfox the Market

USIO

Our Power

Northern

£1020

£946

£917

Outfox the Market

Our Power

USIO

Southern

Northern Southern

£1081

£1004

£985

Outfox the Market

USIO

Our Power Our Power

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BG criticised over new tariff British Gas’ latest tariff offers consumers unlimited energy use for a whole year at a price of £1,200 for average customers. The announcement comes just weeks after E.ON’s new tariff which offered to fix consumer bills at £1,224 per year for typical consumers. The unlimited tariff has faced criticism for both its ‘poor value’ and environmental insensitivity. In order to benefit, consumers would need to consume 19% more energy than usual according to British Gas. The supplier, however, claims that the “peace of mind” associated with the tariff makes it a worthwhile deal. Environmentalists have also criticised the tariff for sending out “the wrong message” and encouraging wastefulness which could affect the UK’s ability to meet its climate targets.

The Scottish Government launched a national taskforce on 13 September to provide advice on decarbonisation and low-carbon economy opportunities in terms of fair work and tackling inequalities. The JTC forms part of the government’s plan to achieve a carbon-neutral economy, with targets currently for a 90% emissions reduction on 1990 levels by 2050.

The strategy also includes investing in more environmentally and socially sustainable jobs and economies, which are considered for future policy shifts.

Roseanna Cunningham, Scotland’s Environment Secretary, said that as “Part of the Paris Climate Agreement, just transition is about transitioning to a low-carbon economy in a way that is socially inclusive. A key principle is that no-one gets left behind as the employment landscape shifts.”

On 3 September, Scotland’s First Minister Nicola Sturgeon announced £16.7mn of additional funding for low-carbon transport. The pledge comes ahead of Sturgeon’s Programme for Government, which last year set out a target of removing the need for new petrol and diesel cars and vans by 2032 to reduce Scottish greenhouse emissions. The new fund comes on top of a continued investment of £1bn per year in low-carbon and public transport. The First Minister said the new funding will go into a range of initiatives including improving electric charging points access and increasing the number of green buses, ensuring that people see electric vehicles as “an attractive, cost-effective alternative” to petrol and diesel vehicles.

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REA and SPP reveal solar industry unease from proposed FiT closure A survey carried out by the Renewable Energy Consumer Code (RECC), a subsidiary of the Renewable Energy Association (REA), alongside a poll undertaken by the Solar Power Portal (SPP), has revealed substantial unease within the solar industry due to the announcement by BEIS in July to close the Feed-in Tariff (FiT) scheme to new applicants at the end of March 2019. The REA found that approximately 78% of UK installers are considering staff reductions, while 58% of UK solar installers interviewed by SPP are thinking of downsizing their UK coverage or leaving the industry entirely. The survey of 140 RECC members, once replicated across the UK solar industry, reveals that the closure of the FiT scheme and removal of export tariffs could cause thousands of job losses. Half of those surveyed admitted to cutting their workforce by three-quarters to reduce costs. To put it into perspective, the last major change to the FiT scheme saw an estimated 9,000 job losses because of cuts to solar tariffs. The REA’s response to the government’s proposals, titled Consultation On The Feed-In Tariffs Scheme, argued that export tariffs for small-scale renewables should be retained after closure to prevent significant impacts to the sector. This comes partly because of an impact assessment by BEIS, which indicates that, without a suitable replacement for the export tariff, the average returns of solar installations could drop from around 5% to 1-2% per year. They suggested that new targeted tax measures could be introduced, including 0% VAT for onsite renewables, as well as the introduction of the Enterprise Investment Scheme (EIS) and Enhanced Capital Allowance (ECA) relief to maintain continuous deployment rates of new solar installations.

Our latest insight paper UnFiT for Purpose aims to address the issue of securing a route to market for small-scale low-carbon generation following the Feed-in Tariff (FiT) closure to new applicants at the end of March 2019. It recommends a Transitional Offtake Tariff to support continued deployment of small generators from April 2019 until new local markets can be shown to work. This could be achieved at no cost to consumers by tying export rates to system values. It advocates a continuing obligation on suppliers to purchase surplus energy from solar sites below 250kW. It also proposes retention of guaranteed market access for community energy schemes at a higher threshold of 500kW given their reliance on export payments. Contact us to request a free copy at [email protected]

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Research shows huge potential for residential energy efficiency

An academic paper, The Remaining Potential for Energy Savings in UK Households, by Rosenow, Gurtler, Sorrell and Eyre, has explored the potential energy savings that could be made by improving efficiency of the UK housing stock. Total UK household energy use decreased by 19% between 2002 and 2016 despite a 12% increase in the number of households, with this largely attributed to the implementation of energy saving measures. However, despite these improvements, according to government data, residential buildings have the highest potential for reducing carbon emissions at 32%. Considering innovation in technology and delivery, energy demand of the UK could potentially be cut by more than 50%. The paper looked at the technical potential of energy efficiency measures, and two further scenarios called “cost-effective” and “limited ambition”. The associated reduction in direct emissions by 2030 compared to a 2015 baseline are 10% for the limited ambition scenario, 16% for the cost-effective scenario and 75% for the maximum technical potential, which includes deployment of all technologies currently available to the housing stock without regard to their cost effectiveness. The limited ambition scenario is based on a projection of energy efficiency measures that will be installed by 2035 if current policies continue to be deployed. The cost-effective scenario includes all energy efficiency measures that could potentially be installed and are estimated to be economically beneficial. Around 47% of total savings by 2035 under the limited ambition scenario would be achieved through building fabric improvements, boiler replacements and upgrades to existing heating controls. The net present value of the cost-effective scenario is estimated to be approximately £7.5bn, 54% of which is accounted for by energy savings, 37% by greenhouse gas savings, and the rest coming from wider social benefits. The value of all the wider benefits could total as much as £47bn. The research identifies scope for huge energy efficiency gains in the residential sector. However, translating this into workable delivery solutions remains challenging, given current policy and funding ambitions.

Non-domestic energy efficiency commissions highest since 2016 A report by Bloomberg NEF and Energy Efficiency Verification Specialists Insight has revealed that non-domestic energy efficiency commissions have

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surpassed 2017 figures for the second quarter of 2018, with nearly three-quarters (72%) of business and industry consumers commissioning projects. This is the highest rate since 2016 and marks a sharp rebound in interest for energy efficiency projects, following five quarters of below average investment. The largest increases in measures taken up include building energy management systems. 20% more of these systems, which look at and control energy generation and use across an entire building in one system, were deployed in quarter two 2018 compared to the four-quarter average. Sub-sections of building management system, such as lighting controls, heat exchangers and in-office thermal control systems, increased to a similar level. These changes may be linked to shifting concerns of business and industry owners, with over a quarter stating their largest issue of concern is related to customer demand. Trends may also have shifted in response to BEIS’s recent consultation Building a Market for Energy Efficiency: Call for Evidence.

Lib Dems call for better housing A motion was passed at the Liberal Democrat conference on 17 September calling on the government to improve housing standards. The party called for a commitment of at least 50,000 new social homes for rent to be built every year over the next decade. The motion included calls for better environmental standards for housing to reduce both fuel poverty and greenhouse gas emissions. The call relates to the Liberal Democrats’ long-standing view that 300,000 homes should be built each year over the next decade to alleviate the growing housing crisis. The Liberal Democrats would also look to create a not-for-profit British Housing Company which would have the power to claim unused land under compulsory purchase, for use in housebuilding. The party’s Housing Spokesperson Wera Hobhouse MP said: “Radical action must be taken to ensure people have the right to live in an affordable and secure home.”

Labour Party Conference update The Labour party held its annual conference between 23-26 September. The occasion saw a large focus on Labour’s plans for nationalisation of energy and water markets, but also a huge pledge to increase the UK’s renewable capacity far higher than any large party has promised in the past. The pledge would see implementation of 52GW of offshore wind, a “doubling” of onshore wind and a “tripling” of existing solar capacity – all within 12 years. The UK’s current offshore wind portfolio included just 6.1GW of capacity in 2017, and raising this to promised levels would be a huge task. Labour hopes to reduce the country’s emissions by 60% by 2030 and achieve net zero emissions by 2050.

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Electric vehicles news

Scottish government pledges EV charging boost First Minister Nicola Sturgeon has announced that this year the Scottish Government will invest £15mn to add an additional 1,500 electric vehicle charge points across the country. These will be split across homes and businesses and will include 150 public charge points. The announcement came as part of Sturgeon’s Programme for Government 2018-19, published on 4 September, which included plans to more than double investment in new ultra-low emission vehicles from £8mn to £20mn.To help do this, the Scottish Government will create at least 20 “electric towns” across the country by 2025. Electrification is to further manifest in the public sector, with a commitment to add at least 500 new ultra-low emission vehicles to public sector fleets. This will include more than 100 green buses added through use of the £1.7mn Green Bus Fund. The programme also committed an additional £7bn towards infrastructure in Scotland, including clean energy, on top of the government’s existing spending plans by 2026. This includes a further £2mn this year to support innovation and help reduce the costs of offshore wind.

Edinburgh tables EV infrastructure plans Members of the City of Edinburgh Council recently considered a plan to introduce a city-wide network of electric vehicle charging points. Announced on 1 October, The City of Edinburgh Council and Transport Scotland commissioned the Energy Savings Trust (EST) to prepare the electric vehicle (EV) infrastructure business case, which went before the Transport and Environment Committee on 4 October. EST proposed that, by 2023, the city will need to have installed 211 new charging points costing £3.4mn. Many of these will be rapid chargers. It noted that Edinburgh is predicted to have nearly 10,000 EVs by 2023. However, the plans assume that many users will have access to driveways and garages for home charging with no need for access to public infrastructure. Support for the proposal was shown by Cabinet Secretary for Transport, Infrastructure and Connectivity, Michael Matheson, who said: “I welcome the City of Edinburgh Council’s innovative plans to intensify the availability of electric vehicle charge points”, noting that the plans support the “commitment to phase out the need for new petrol and diesel cars and vans by 2032”.

http://www.pixie-energy.com/

http://www.pixie-energy.com/

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Pixie Energy’s second annual conference

Pixie Energy hosted its 2018 annual conference at Norwich Cathedral on 10 September. Members of the Pixie team gave briefings on the progress of our local energy innovation projects, and we also welcomed external speakers on the theme of market transformation, Alex Jakeman from local network UKPN’s innovation team and Paul Bourgeois of the Greater South East Energy Hub. The event followed Pixie Energy’s launch event last summer, which first introduced the East Anglian Energy Market Innovation Project – the overarching project building on sister company Cornwall Insight’s deep national knowledge and relationships by establishing innovation projects with local partners to yield “learning by doing” in smarter, low-carbon solutions. Much progress has been made over the past year, and this event focused on Pixie Energy’s flagship project: the Norwich Virtual Energy Community (NVEC) project, which was introduced by Pixie Energy Founder Nigel Cornwall. A key objective of this transformative project is to capture better value for locally produced solar and other low-carbon power. Using a recently created “innovation sandbox”, Pixie Energy aims to allow separate energy suppliers to provide electricity to a single property from solar panels, batteries, and for the charging of electric vehicle behind the meter. It will also incentivise smarter consumption of energy through application of time-of-use and time-of-export tariffs, which will be provided by balancing supplier Green Star Energy. The NVEC project will initially deploy around 50-100kW of domestic solar panels and 30kW of domestic batteries on 10-15 sites in Norwich and North Norfolk. Energy generated will be used by the host households or stored in the batteries. Participants in the scheme will have the chance to purchase excess power produced or stored from other project participants. The initial project will be set in place by the end of the year, doubling in size by April 2019 as part of phase two. An important aim is to demonstrate that viable local markets can develop around new small-scale low-carbon generators in a subsidy-free world. The conference featured presentations from various other speakers, including Pixie Energy’s Tom Andrews, who introduced the Energy Company Obligation (ECO) Switch initiative. The idea will see the development of a trading platform to make delivery of ECO measures more flexible, efficient and targeted, bringing in funding to East Anglia. The project aims to join up data from councils and social housing providers with energy suppliers and energy efficiency installers. The platform is set to launch in 2019.

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local energy matters: scotland

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