A post with links to recent research and articles published by our members including Baringa, The CCC, Energy UK, Vivid Economics, Cambridge Econometrics, NERA, SPRU and IPA Advisory.
The study “Residential Prosumers in the European Energy Union” adopted by DG Justice in November aimed at gathering evidence and data on the drivers, regulatory aspects and economic performance in the area of small scale self-generation for residential consumers. CE developed a new spreadsheet-based model of consumer behaviour to estimate future solar PV investments under a range of assumptions about the level of subsidies available, growth in EV markets and EU trade policy. The new model of consumer behaviour accounts for non-financial incentives including current trends and fashions.
Assessing energy and climate policy at state level in India
Developed in collaboration with the Regulatory Assistance Project (RAP), the core motivation of the new E3 India model is to enable both policymakers and stakeholders to assess various policy impacts at a significantly higher geographical resolution than has previously been possible in India. It features state-level implementation of the Future Technology Transfer (FTT) module, to capture the influences of new technologies in the power sector and on the wider economy and environment. Policies can be defined at state level, and the model results show impacts in each state, including impacts on trade between states.
At over 200 pages, Professor Dieter Helm’s review of the cost of energy to UK businesses and households, published in October, is wide-ranging. It covers many issues that fall firmly within the CCC’s remit (such as the costs of decarbonising the UK’s electricity supply) and others that don’t (such as electricity network regulation and energy retail tariffs). The review makes a number of recommendations – some specifically for the CCC. Mike Thompson, the CCC’s Head of Carbon Budgets, sets out five early reflections on Helm’s findings.
CCC assesses Government’s Clean Growth Strategy (17 January 2018)
In October, the Government published the Clean Growth Strategy, setting out its approach to meeting the fourth and fifth carbon budgets and outlining its vision for the UK’s continuing transition to a low-carbon economy. In this new report, the Committee will provide a detailed assessment of the Clean Growth Strategy and advise on recommended next steps.
Committee on Climate Change advises on Welsh Carbon Budgets (19 December 2017)
The Committee will publish new advice to the Welsh Government setting out the recommended level of Welsh carbon budgets. The advice follows previous CCC advice, published in April 2017, on the design of Welsh carbon targets. Lord Deben, CCC Chairman and Dr Rebecca Heaton, CCC member with special responsibility for Wales, will be in Cardiff to launch the report alongside the CCC’s Acting Chief Executive and BIEE member, Adrian Gault.
ETI Commissions Baringa to analyse future energy needs in UK homes
Baringa Partners have both been selected by the Energy Technologies Institute (ETI) to undertake data analysis in a new knowledge building smart energy project that will investigate domestic energy use.
High five million for energy switching as new companies join guarantee
Over five million customers have now switched electricity supplier in 2017 topping last year’s figure. The latest figures from Energy UK come as another three major suppliers sign up to the Energy Switch Guarantee (ESG) – which now covers over 90% of the market. More than 475,000 customers took action to save money by switching provider during November, up by 14 per cent on this time last year. More: http://www.energy-uk.org.uk/press-releases/370-2017/6393-high-five-million-for-energy-switching-as-new-companies-join-guarantee.html
Offshore Revolution? Decoding the UK Offshore Wind Auctions and What the Results Mean for a “Zero-Subsidy” Future
In a recent white paper, NERA Director Daniel Radov, Senior Consultant Alon Carmel, and Analyst Dr Clemens Koenig review the outcome of the latest UK auction for “less established” low-carbon generation technologies, such as offshore wind. The auction resulted in record low costs, with prices paid for offshore wind in the mid-2020s now not much higher than the government’s expected wholesale price. The authors dissect the auction results and analyse the bidding strategies used to successfully secure maximum benefit.
The results are in line with other auctions in Europe, where the costs of renewable power have fallen sharply, owing to cost efficiencies. Such lower prices raise the prospect of a future in which solar, onshore wind, and offshore wind compete directly against each other and against other forms of power generation, without relying on government subsidies. These developments will bring with them increasing costs of integration and increased risk for both governments and investors—for example, the risk that projects will not be delivered, as well as the risks associated with greater exposure to market prices.
UK Green Investment Bank: examining the case for continued intervention
In a report for the Department for Business, Energy & Industrial Strategy, written in August 2015 but only just published, NERA Director Daniel Radov and Senior Consultant Alon Carmel led a team that reviewed the impact of the UK Green Investment Bank (GIB) plc’s impact after its initial few years of operation. NERA also considered GIB’s future role. NERA concluded that there was robust evidence to suggest that GIB had indeed “crowded in” significant amounts of private capital into the green infrastructure sectors, while adhering to its requirement to be “additional” and not offer terms below market rates (“green and profitable”). Without GIB, the finance for these projects would potentially not have been provided, or would have been delayed or invested at a higher cost of capital. GIB’s activities addressed different market failures across its main sectors, and its results also varied across sectors. NERA’s analysis was cited by the National Audit Office in a report published this week on the sale of GIB to investment bank Macquarie – which was completed successfully earlier this year.
Special issue highlights importance of “policy mixes” for transitions to low-carbon energy systems
A new special issue of the academic journal Energy Research and Social Science guest edited by Dr Karoline Rogge, Dr Florian Kern and Prof Michael Howlett highlights the need to shift away from a one-instrument, ‘single bullet’ approach, towards well designed combinations of policy goals and instruments, otherwise known as ‘policy mixes’, in order to achieve a transition to a low-carbon economy. Read full article
IPA Advisory is delighted to continue its support of the British Institute of Energy Economics and the excellent programme of conferences and seminars which encourage and stimulate debate on energy policy issues. The 2017 Policy Conference was a particular highlight, with the session that IPA Advisory sponsored on Energy Smart Systems providing interesting commercial and regulatory perspectives from industry participants and the energy sector regulator on how the benefits will be captured by UK consumers and companies. IPA Advisory is supporting work in this area, such as helping empower consumers to play an active role in balancing the system. For example, as an Advisory Board member, IPA Advisory is supporting the EPSRC-funded research project “Distributional Effects of Dynamic Pricing for Responsive Electricity Demand (DEePRED)”, which is led by Professor Jacopo Torriti of the University of Reading. This project builds upon previous work conducted by IPA Advisory and Professor Torriti and seeks to improve understanding of the effects of dynamic tariffs on different socio-demographic groups, with the overall objective of identifying clusters of users which might significantly benefit or be disadvantaged by the provision of demand flexibility.
IPA Advisory has also been commissioned by the Department of Business, Energy and Industrial Strategy to undertake research into factors to enable growth of the non-domestic energy efficiency services market, where businesses deliver energy services such as active energy management, on site generation and installation of energy efficiency improvements to clients to reduce or optimise their energy usage, associated cost and emissions.
Looking forward to 2018, IPA Advisory looks forward to supporting BIEE and its two-day conference in September on “Consumers at the Heart of the Energy System?”
The latest Vivid Economics newsletter contains articles on their recent piece of research ‘Valuing biomass conversion in the UK power sector‘ for NRDC and Robert Ritz’s presentation to BIEE on “Competition and trade in natural gas markets: global and UK perspectives”.