The historic commitment on Tuesday by the government to a net zero emissions target for 2050 was followed promptly by the laying of a draft order overwriting the current 80% target in the Climate Change Act 2008. There was lots of justifiable coverage in the media about this being the first legislated commitment by a major economy to nullify emissions. Weekend rumours of Germany and possibly our European partners following suit , as well as France which is already discussing legislation, do not detract from its significance. It should secure Theresa May a lasting legacy.
Not all parts of the government were on board, it seems. Indeed the chancellor placed a £1tn price-tag on the shift. But the benefits that will flow from this are dependent on new policies and programmes that now need to be implemented to deliver the target, and these could be transformational, with East Anglia well positioned to be a leader in the push for faster, cleaner growth.
The capacity market T-1 “top-up” auction that took place last week was concerning. Clearing at 77p/kW, the reward for capacity in the top-up auction for the coming winter is a record low; it’s almost the same as the cost of a first-class stamp. Explaining this and other recent auction prices away by simply referencing over-supply would be dangerous. Some capacity support mechanism is needed for new build but also for existing generation that is suffering serious revenue erosion. But the current GB mechanism is clearly flawed.
Also last week the government committed to its new Smart Export Guarantee. We now have a guaranteed route to market that reaches up to the 5MW level and applies to suppliers accounting for over 90% of the supply market. It’s also very positive that some suppliers like Octopus and Bulb are already offering decent export tariffs. But many of us would like to have seen a minimum price.
The Solar Trade Association is estimating that by 2023 solar build out could recover to between 1-1.5GW but that requires resolution of other issues, such as the Treasury’s ludicrous proposal to raise VAT rates on many solar/storage schemes. What is clear is that the “solarcoaster” is well and truly over.
Down your way
As for New Anglia Energy I have also been busy developing this website, which includes backfilling interesting local news. I am also now actively tweeting from @NewAngliaEnergy, so please follow me if you want to track local energy market developments.
I visited the closed Beetley landfill site up near East Bilney with Norfolk County Council folk, and also had a very productive meeting alongside my Pixie Energy colleagues with the Greater South Eastern Energy Hub, who are now nicely settling in. And preparations continue for our formal launch of New Anglia Energy on 3 July, where I am hoping to announce a closer relationship with technology company Verv.