The UK government presented proposals for reforming the nation’s energy system in an effort to lessen the impact of skyrocketing gas prices and lower expenses for customers.
The Review of Electricity Market Arrangements (REMA) will ask for input on a wide variety of ideas to meet the joint problems of responding to escalating global energy costs, increasing energy security, and transitioning the UK to a greener energy system.
Because gas is frequently the final source of supply to fulfil demand, under the existing system, gas prices frequently wind up dictating the wholesale price of electricity. As renewables become more and more integrated into the grid, prices will eventually be more often influenced by the cheaper power that they provide.
In order to ensure that customers fully benefit from the UK’s supply of cheaper, cleaner energy, this consultation will examine how to update this pricing mechanism to more accurately reflect the surge in cheaper renewable electricity.
Some of the potential changes would include:
- Restructuring the capacity market to increase the participation of low carbon flexibility technologies, such as electricity storage, that enable a cleaner, lower cost system.
- Offering incentives to customers to use the grid’s reduced rates when demand is low or the weather is unusually windy and bright, homeowners may save money.
- Separating the price of expensive fossil fuels from the electricity generated by less expensive renewable sources, a move that will assist to assure that customers will pay less because of less expensive clean energy sources.
Business and Energy Secretary Kwasi Kwarteng seems to be enthusiastic about this potential reform, stating through the government website:
“In what could be the biggest electricity market shake up in decades, I am confident that this review will significantly enhance GB’s energy security and supply for generations to come.”
He then addressed how the price of offshore wind power has fallen: “We’ve just seen the price of offshore UK wind power fall to an all-time low and gas is a shrinking portion of our electricity generating mix, so we need to explore ways of ensuring the electricity market is adapting to the times. That includes ensuring the cost benefits of our increasing supply of cheaper energy trickle down to consumers, but also that our system is fit for the future – especially with electricity demand set to double by 2035.”
Through the government’s flagship renewables programme, the UK earlier this month acquired a record capacity of about 11GW of clean energy at record low costs – nearly double the capacity reached in the previous round and enough to power about 12 million British households.
With the demand for electricity expected to at least double over the next 13 years, REMA will concentrate on creating a design for the market that is appropriate for its intended use and identifying and enacting the necessary reforms to make the GB electricity markets functional for commerce, industry, and households.
Heatwave: How Will It Impact The Energy Market
This week, with temperatures expected to reach up to 41C, the UK may see its warmest day on record.
With unprecedented weather like this, it sparks the question what the impact will be on the energy markets, with demand for air conditioning and other cooling systems soaring.
Due to higher air and water temperatures during heat waves, both renewable technologies and fossil fuel powered facilities’ ability to generate electricity are impacted.
Due to a reduced oxygen content in the air at very high air temperatures, gas and fuel-powered plants see a 0.1 percent drop in fuel efficiency for every 1°C increase in temperature.
Nuclear Power
According to reports, extreme heat might compel nuclear power plants to curtail or suspend their output.
According to EU regulations, power plants are obligated to restrict or cease nuclear power output when rivers reach a specific temperature. Nuclear stations consume a lot of cooling water, which they then discharge back into rivers.
Already in France energy companies are facing the consequences of this. EDF has scaled back electricity production at two of its power units along the Rhone River due to the heat wave in France.
According to ELN: On Saturday, Thibault Laconde, an engineer of the scientific institution CentraleSupélec, said: “In total, the operation of five of the 18 French nuclear power plants is affected or is expected to be affected soon by the heatwave.
“This is not uncommon – all of these plants have already experienced outages caused by heat and/or drought over the past five years.”
They also commented on whether temperatures will reach a level that will impact the operation of UK stations, stating that its unlikely that these temperatures will interrupt production.
In Europe they are rushing to fill storage ahead of what is typically the winter season’s peak demand In order to avoid interruptions to the 40% of Europe’s gas supply that is provided by Russia.
High demand for electricity coincided with lesser production from renewable energy sources as temperatures in certain areas of Spain soared past 40 Celsius (104 F), forcing the power grid to resort to more expensive gas plants. As a result, the demand for gas for power generation reached a record high.
On Wednesday, transmission system operator Enagas said that gas-fired power plants in Spain received 770 gigawatt hours (GWh) of the fuel, the largest day total since June 2008.
Wind & Solar Power
Heat waves may be problematic for wind, a cheap source of energy.
The wind gusts necessary for spinning turbines, which may occasionally supply the bulk of the UK’s power, are often weakened by the high pressure system that is baking the country. As the temperature hits 30 degrees Celsius this weekend, wind-power generation is expected to decline.
Although this level of wind output is typical for the summer, it increases the reliance on power plants that use expensive and damaging gas.
Solar panels, on the other hand, benefit from clear, bright sky, although they are significantly less effective at generating power in the UK than wind farms are. Additionally, considerable cloud cover is predicted for the upcoming days, which will reduce the solar power.
Power Cables
Power-grid cables are also under higher strain due to the increased demand and heat. As they transmit more electricity, they get hotter, which can reduce the amount of power the network can carry when air temperatures also increase.
Air Conditioners & Cooling Technologies
According to a briefing given to the UK Parliament last year, the worldwide market for air conditioning and refrigeration was larger than the market for solar panels in 2018 and that demand for power for cooling alone is expected to treble by 2050.
However there isn’t much data out there to suggest whether the UK will be apart of this.
The UK has historically experienced heat waves for only a short period of time each year. Although the impact of air conditioning use is now minimal in comparison to other uses, it might increase as the risk posed by climate change increases.