Posted on 25 March 2011.
The director of one of Europe’s leading energy producers and owner of indigenous Irish energy supplier Airtricity has warned that Ireland is being left behind in the development of offshore wind and marine generation. Addressing over 400 delegates at the annual conference of the Irish Wind Energy Association, Scottish and Southern Energy Group finance director Gregor Alexander said that this is resulting in a significant lost opportunity for the Irish economy and job creation here.
“Returns on our Irish onshore wind farms are marginal. More attractive returns are available in the UK. Of even more concern is that Ireland is being left behind in the development of offshore wind and marine generation. These technologies offer considerable export and job opportunities but Ireland is not maximising them,” he said.
Mr Alexander pointed out that for the renewable sector here to reach its true potential it needs to forge ahead with market coupling with the UK and to broaden its interconnection plans from just linking with the UK to include an interconnection to France as well.
“As a very small market in European terms Ireland, at a minimum, needs profound interconnection and market coupling with the UK. Coupling would bring economies of scale, a more diverse generation portfolio, the opportunity to export renewable electricity and ensure customers benefit from increased competitive energy supply,” he elaborated. “We would also encourage Ireland to go further seeking interconnection further afield. In Scotland, for example, we are looking to Norway and Iceland to tap into hydro and geothermal resources respectfully.”
An interconnector from Ireland to France would not only access French power in winter but it would provide an export opportunity in summer for Ireland’s generation fleet to supply France’s air conditioning load.
The Scottish and Southern Energy finance director also said that a more pragmatic approach to planning issues is also required in Ireland to bring an end to the current conflict between Irish energy and planning.
For example, SSE Renewables was recently refused planning permission on the basis of ‘the negligible probability’ that the proposed wind farm could pollute a water body some 25KM away, despite having recently completed a wind farm adjacent to a water body.
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Posted on 23 March 2011.
UK energy market regulator Ofgem is proposing sweeping away complex and unfair pricing practices and requiring the ‘big six’ energy suppliers to auction up to 20% of their electricity generation output following a major review of the sector.
Ofgem’s review found that competition is being stifled by a combination of tariff complexity, poor supplier behaviour, and lack of transparency. Furthermore, the degree of influence the big six assert on the retail market has not diminished since Ofgem’s 2008 probe. The clearest example, being the finding that for the first time there is evidence that the big six have adjusted prices in response to rising costs more quickly than they reduced them when costs fell.
Ofgem’s proposals are designed to force open the electricity and gas markets to ensure they work more effectively for consumers. The energy supply companies have eight weeks in which to engage constructively with Ofgem’s proposals. If firms frustrate reforms they risk ending up at the Competition Commission.
“Energy companies have failed to play it straight with consumers and so Ofgem is proposing to break the stranglehold the ‘big six’ have over the electricity market by making them auction up to 20% of their generation output. This would increase price transparency and make it easier for new players to enter the retail market,” explains Alistair Buchanan, chief executive of Ofgem. “Consumers have told us that energy suppliers’ prices are too complicated. It is no surprise that they are bamboozled when tariff complexity has increased from 180 to more than 300 since 2008. That is why we are planning to sweep away this complexity so suppliers’ prices are fully exposed to allow easy price comparisons.”
He continues: “We are also backing these reforms with a tough approach to enforcement. Consumers must have confidence that energy companies are playing fair at a time when they are being asked to foot the £200 billion bill to pay for the investment Britain needs to ensure secure and sustainable energy supplies.”
Ofgem has also announced a new investigation into Scottish Power and is exploring whether it needs to bring similar actions in the non domestic market (where the concerns rest on switching being frustrated). This is in addition to an ongoing investigation into British Gas, EDF Energy and npower and into how they handle consumers’ complaints.
Ofgem’s investigations into miss-selling by EDF Energy, npower, Scottish Power, and Scottish and Southern Energy are continuing.
Another finding of the review is that in general the supply companies’ response to the 2008 Probe reforms has been disappointingly poor. Ofgem proposes to strengthen the existing reforms and pursue companies with appropriate enforcement action if they fail to implement them.
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Posted on 15 February 2011.
Scottish and Southern Energy has submitted a proposal under the EU’s NER300 funding process to develop a carbon capture and storage project at its gas-fired power station in Peterhead, Aberdeenshire. Shell UK and Petrofac subsidiary CO2 DeepStore will also be participating in the project by providing the offshore transport and storage elements of the proposal.
The proposed project will design and develop a full chain, post-combustion CCS facility which will be capable of capturing the CO2 from one 385 MW combined cycle gas turbine unit at Peterhead Power Station. Current plans are that the CO2 will then be transported via an existing underground pipeline to St Fergus for further compression and then transported via an undersea pipeline to an existing gas reservoir in the North Sea operated by Shell UK that will have ceased production.
The project is sized to be able to participate in both the EU’s NER300 and UK Department of Energy and Climate Change funding programmes which are aimed at stimulating and encouraging investment in CCS.
The UK Government announced in November 2010 that the second phase of the £9 billion carbon capture and storage (CCS) demonstration programme – the three projects that will follow the first demonstration – will be open to projects on gas-fired power plants as well as coal-fired power plants.
”If long-term targets for reducing emissions are to be met, CCS technology must be applied as widely as possible. We therefore welcomed the Government’s decision to include gas-fired generation plant in its CCS demonstration programme,” says Ian Marchant, chief executive of SSE. “However, the development of a commercial-scale CCS demonstration project presents significant challenges and will require appropriate levels of support from both the EU and UK government.”
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Posted on 29 November 2010.
UK energy watchdog Ofgem has released its latest Electricity and Gas Supply Market Report, which indicates that that the margin on a standard dual fuel tariff is now around £90, an increase of 38% from September. Whilst Ofgem would expect efficient firms to make a profit, it wants clarity on behalf of consumers that the market is transparent and is working as effectively as possible.
This is why Ofgem will review the retail energy market to decide if further changes are needed to ensure the market works in the interests of consumers and to increase transparency in the energy market. As part of this review it will investigate the retail accounts, recently received by Ofgem under new licence requirements.
The figure for net margin incorporates the new, higher prices of the three ‘big six’ energy supply companies that have already announced price rises for this winter. The big six comprises British Gas, E.ON Energy, EDF Energy, Npower, Scottish and Southern Energy and ScottishPower. Only one big six supplier, EDF Energy, has promised to freeze prices between now and March 2011. The other two big six suppliers have not yet made their pricing positions known.
“With Britain facing an investment bill of £200 billion over the next ten years, consumers have the right to expect that the energy retail market is providing them with value for money. Our analysis shows an increase in company margins from £65 to £90 at a time of rising energy prices, which causes Ofgem to rightly ask if companies are playing it straight with consumers,” says Alistair Buchanan, chief executive of Ofgem. “The energy retail market can only be fully effective if consumers have confidence that the market is transparent and easy to take part in. So we will go beyond our usual quarterly reports on prices and do a comprehensive review of the retail market and our recent reforms from the consumers’ perspective. We will also carry out a detailed investigation of the newly available retail accounts and the facts behind these numbers.”
Since its Retail Market Probe in October 2008, Ofgem has secured a series of important reforms for customers to improve transparency and ensure fair play. This has secured some real benefits for consumers, including the removal of unjustified price differences, required standards of acceptable practice and improved consumer information, such as annual energy statements. As part of its review Ofgem will be looking at how effectively energy companies have implemented all of these reforms.
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Posted on 26 August 2010.
Finavera Renewables has agreed to the co-development of the 105 megawatt Cloosh Valley Wind Project in County Galway with SSE Renewables (Ireland), the Irish renewables development division of Scottish and Southern Energy (SSE). The move follows the sale of a majority stake in Finavera’s wholly owned Gate 3 grid connection from Eirgrid to SSE for Eur8.4 million. SSE already owns Irish wind energy company Airtricityafter acquiring the Irish business for £1.1b in 2008..
Finavera Renewables has signed a co-development agreement with SSE and Coillte, the State-owned commercial forestry and renewables company, to jointly develop the Cloosh Valley project. Coillte is the landowner at the project site and has been a development partner on the project with Finavera since 2009. Finavera will retain a 10% equity interest in the project and will participate in all project development functions and activities.
The Cloosh Valley Wind Project has nameplate capacity of up to 105MW and has received a Gate 3 Node Assignment from Eirgrid. The wind resource at the Cloosh Valley project is among the strongest in Europe. The project capacity of 105MW would exceed all current onshore wind farms in Ireland and would provide enough electricity for approximately 68,000 homes.
“SSE brings significant development, construction, and operating experience to this project. The strength of the development team now behind the Cloosh Valley project illustrates the value of this project, which has some of the best available wind resources in Europe. We now have the right team and a clear path to construction and full operation of the Cloosh Valley project,” explains Jason Bak, chief executive of Finavera Renewables.
SSE is one of the UK and Ireland’s leading energy companies. It is involved in the generation, transmission, distribution and supply of electricity; energy trading; the development of major renewable energy projects; the extraction, storage, distribution and supply of gas; electrical and utility contracting; and telecoms. SSE owns just over 11,300MW of electricity generation capacity, including its share of joint ventures and associates. This makes it the second largest electricity generator across the UK and Ireland. The capacity comprises 4,590MW of gas- and oil-fired capacity, 4,370MW of coal-fired capacity (with biomass ‘co-firing’ capability), and 2,370MW of renewable capacity.
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