Tuesday, 29 October 2024

Response from Jeremy Hunt

 I recently contacted Jeremy Hunt about proposed changes to alcohol duty (see link). His response is below. It's a pity he didn't actually address to main thrust of my email. Hey ho! That's politicians for you!


Dear Richard, 

I completely understand how important it is to support alcohol producers and our small local pubs – indeed, as Chancellor I froze alcohol duty and announced a 75% reduction in the business rates for retail, hospitality and leisure businesses. I will be very disappointed if the Chancellor does not prioritise pubs and small businesses in the Autumn Statement and I will certainly press Labour to build on my work to address the challenges faced by the hospitality sector. 

 

Finally, if you do not already receive it, would it be helpful for you to receive my weekly update of events in Westminster and locally? You can sign up here and can unsubscribe at any time.  

Best wishes,

Jeremy
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Rt Hon Jeremy Hunt MP
Member of Parliament for Godalming and Ash

Free Electrcity

 Interesting! Reposted from Edie:


Octopus to offer free electricity during periods of low demand, excess renewable generation

Electricity supplier Octopus Energy is set to provide customers with free electricity during periods of low demand and high generation, in a bid to stop renewable generation from being curtailed.

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Published 15th August 2024

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Octopus to offer free electricity during periods of low demand, excess renewable generation

Image: Octopus Energy

The ‘Free Electricity Sessions’ have been made available this week to customers already registered under the ‘Octoplus’ rewards scheme. Scheme membership requires a smart meter.

Under the scheme, customers will benefit from free electricity when the wholesale price of electricity drops to or below £0. This typically happens during periods of low demand and high renewable generation, led by offshore wind.

Octopus has recorded 14 days out of the past year where wholesale electricity prices dropped below £0. In these instances, wind farms are often paid by the Government to shut down to prevent grid overload, due to a lack of energy storage capacity and built-in system flexibility. This is called curtailment.

The result is higher costs for taxpayers and wasted potential for decarbonising the UK’s electricity mix. It has been estimated that wind curtailment costs topped £1.5bn in the 18-month period leading up to April 2023.

Curtailment costs could grow significantly unless more is done to build storage, flexibility and grid infrastructure by the new Labour-led UK Government – which aims to decarbonise the electricity grid by 2030.

It made manifesto pledges to quadruple offshore wind capacity, treble solar capacity and double onshore wind capacity this decade.

Octopus wants to showcase how demand-side interventions could ease this transition while also saving businesses and homes money on their energy bills.

Customers will be made aware of Free Electricity Sessions a day ahead. When the Sessions begin, they will get another notification encouraging them to use energy-intensive appliances such as washing machines and tumble driers. They may also want to benefit from free electric vehicle charging or digital device use.

Flex appeal

Around 1.7 million energy customers are signed up to ‘Octoplus’ at present. The scheme also offers ‘Savings Sessions’ incentives for customers to use electricity outside of peak times during winter, as part of the National Grid ESO’s Demand Flexibility Service (DFS).

DFS was first launched in late 2022 on a trial basis. After a total of 1.6 million homes and businesses took part in the trials, with 83% stating that they would participate again, the ESO expanded and extended the Scheme for winter 2023/2024.

The UK Government last year started consultations with Ofgem on how best to encourage homes and businesses to flex their energy use around peak times beyond the DFS.

Initial consultation results, and a further set of plans, were unveiled in April under Rishi Sunak’s Government.

Policymakers were told that adding flexibility to the UK’s energy grid will generate savings of up to £50bn by 2050, largely through avoiding the need for new infrastructure such as pylons and backup gas-fired power plants. Some estimates are higher, at £70bn.

Ministers recognised the role of flexibility from homes and offices as well as industrial hubs.

It now falls to the new Government to shape new consumer protection rules and interventions to scale the market. Ofgem recently chose Elexon as a new flexibility market operator, promising a ‘one-stop-shop’ for the registration of flexible energy devices.

EGL2 - Welcome News

 There wasn't much of a splash for this announcement but it's very welcome. Reposted from Edie:


£3.4bn clean energy ‘superhighway’ between Scotland and England approved, as Welsh offshore wind plans take shape

Ofgem has approved a £3.4bn funding package for the Eastern Green Link 2 (EGL2) project, a 310-mile cable connecting Scotland and Yorkshire.

Published 13th August 2024

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£3.4bn clean energy ‘superhighway’ between Scotland and England approved, as Welsh offshore wind plans take shape

Image: Eastern Green Link 2

Meanwhile, the Electricity System Operator (ESO) has proposed the Celtic Sea project design to connect 4.5gigawatts (GW) of floating offshore wind.

The UK’s electricity and gas regulator, Ofgem, has approved a £3.4bn funding package for the EGL2 project, a 310-mile subsea and underground cable connecting Scotland and England.

The cable will create a 2 gigawatts (GW) high-voltage electricity link between Peterhead in Aberdeenshire and Drax in North Yorkshire.

The project, designed to support the transmission of renewable energy generated in Scotland, will include 270 miles of subsea cable beneath the North Sea and 40 miles of underground cable onshore. Two converter stations, one at each end of the cable, will be constructed to integrate the electricity into the national grid.

EGL2 is the first of 26 projects to secure funding through Ofgem’s Accelerated Strategic Transmission Investment (ASTI) framework, which aims to increase grid capacity.

Ofgem’s chief executive Jonathan Brearley has stated that the ASTI process can speed up approval times for projects like EGL2 by as much as two years. The regulator identified more than £79m in savings across the EGL2 project during the ASTI process.

Aberdeenshire Council has granted final planning approval for the converter station at Peterhead, with construction expected to begin later this year near Boddam.

Construction on the EGL2 is expected to begin later this year and be completed by 2029.

Industry Minister Sarah Jones said: “To achieve our mission for clean power by 2030, we need a grid capable of transporting homegrown energy from renewable sources to power up our homes and businesses.

“These projects could support thousands of good jobs, whilst saving over a billion by upgrading the system, using the latest in offshore technology.

“It forms part of our plan to reduce our reliance on fossil fuel imports so we can protect billpayers, boost Britain’s energy independence and accelerate our path to net-zero.”

The Energy Networks Association (ENA)’s chief executive Lawrence Slade said: “This is really welcome news from Ofgem. To move us forward towards clean power will require the biggest upgrade to the grid in decades. This is a crucial part of that jigsaw.”

The new Labour-led UK Government has committed to decarbonising the power system by 2030. It is notably creating a new publicly owned renewable energy investment business, Great British Energy, which will co-invest in generation projects including community projects, using £8.3bn of public money. The aim is to leverage up to £60bn of investment from other sources.

ESO unveils design for 4.5GW floating offshore wind capacity in the Celtic sea

In related news, National Grid’s ESO has published its design proposal, Beyond 2030: Celtic Sea, for connecting up to 4.5GW of floating offshore wind capacity. This capacity is expected to provide green power for more than four million homes.

The recommended design includes up to 3GW connected to two locations in South Wales and up to 1.5GW connected to the South West of England.

Each of the three proposed offshore wind farms, known as Project Development Areas (PDAs), will have its own connection to the onshore network.

The design features one high voltage direct current (HVDC) connection to a potential new South Wales Connection Node, and two high voltage alternating current (HVAC) connections to Carmarthenshire and North Devon.

The design utilises existing transmission infrastructure and aligns with planned substation developments.

This design supports The Crown Estate’s Celtic Sea Floating Offshore Wind Leasing Round 5, a major initiative to develop 4.5GW of floating wind power. Independent research estimates this leasing round could create 5,300 permanent jobs and generate up to £1.4bn in economic activity.

This initiative is part of the ESO’s broader Holistic Network Design (HND) strategy, which aims to support up to 86GW of offshore wind by the 2030s. The ESO has engaged with local councils in South Wales and the South West for feedback on the design.

The next step involves working with National Grid Electricity Transmission (NGET) to advance the design into detailed network planning.

The ESO’s director of strategic energy planning and chief engineer Julian Leslie said: “Offshore wind is vital to achieving the Government’s target for clean power by 2030, sustaining energy security and achieving net-zero by 2050, so it is a really positive development that this is the first time an offshore wind leasing round will have been launched with a recommended high-level network design in place.”

A spokesperson from the National Grid Electricity Transmission (ET) said: “We welcome the ESO’s network design which outlines preferred locations for the onshore infrastructure required to connect more offshore wind power in the Celtic Sea.

“We will continue with the development of detailed network designs for each of the locations the ESO has highlighted, utilising existing or already-proposed infrastructure where possible.

“Our plans are subject to ongoing design assessments, and we look forward to working in partnership with stakeholders and communities as they develop further.”

Sunday, 6 October 2024

Alcohol Excise Duty - Letter to Jeremy Hunt

 The boundary changes that came into force ahead of the recent general election mean that I now reside in the constituency of Godalming and Ash for which Jeremy Hunt is the elected MP. The following is my first missive to him:


Dear Mr Hunt,


As this is my first attempt to communicate with you may I congratulate you on your re-election as an MP?


There is any number of issues of local and national, indeed international, import about which I am concerned however, on this occasion I would like to raise one with which I am sure you are familiar - that is the impending changes to alcohol excise duties. Hopefully, quoting from the chief executive of Majestic Wines will be sufficient to illustrate the problem of unintended consequences that will arise from implementation of the new regime:


"At the time the policy was launched, the Treasury stated their aim was to create a duty system that would be simpler and fairer for wine businesses to administer. In reality, companies such as Majestic will need to invest six-figure sums just to develop the systems required to handle the new approach – due to the number of different wines that are produced and the variations in ABV% – with ongoing annual administrative costs likely to run into similar sums.


"Unfortunately the increase in duty, coupled with the extra burden of administrative costs, could well result in increases to the prices consumers pay for wine. This will fuel inflation further at a time when we believe all steps should be taken to reduce inflationary pressures.


.............................................


"We fear that the cost and complexity of these unnecessary new alcohol duty rules could pose a threat to these smaller businesses and the livelihoods of those working tirelessly within them. At a time when supporting smaller businesses and local high streets is very important, this policy would do the polar opposite."


As a customer of one such small business within your constituency - Taurus Wines - I worry that the extraordinary choice offered by such independent concerns will be drastically reduced, if not lost. I urge you to bite the bullet, admit that the policy was ill-conceived, and do your utmost to ensure that the extra administrative burden that would be necessitated by implementation of the new rules is avoided by ensuring that they are not implemented.


Yours sincerely,