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This Month in Energy – May

With energy prices expected to begin to decline in the coming weeks, Powerstar’s Head of Marketing, Richard Kerr, turns his attention to mounting net zero concerns. 

Breaking the Paris Agreement 

This month brought the clearest indication yet that global temperatures are set to exceed the 1.5C threshold set by the Paris Climate Agreement sooner rather than later. Researchers now put the chances of that limit being broken in the next four years at a worrying 66%. 

Some of this increase is linked to the cyclical El Niño weather event. Expected to start later this year, this pattern of increased temperatures across the tropical Pacific will play some role in driving up global average temperatures. Fortunately, this means that, while concerning, the period where we collectively exceed the 1.5C target will be temporary. At least, it will be temporary this time around. 

Passing the 1.5C limit for a couple of years doesn’t necessarily mean that the Paris Agreement has been broken. It does, however, put additional pressure on countries to further accelerate their carbon reduction efforts. In turn, this will filter down to individual organisations, with governments including the UK looking to bolster existing sustainability legislation as well as introduce new requirements. 

Carbon Offsetting isn’t a Silver Bullet 

Analysis by Price Waterhouse Coopers this month found that the cost of carbon offsetting is set to more than double by 2030. They will more than double again before 2050. 

In the early years of companies setting net zero targets, carbon offsetting was a popular way of appearing to make progress. Initiatives such as tree planting made for compelling PR headlines, and offsetting allowed large businesses to write of large chunks of their carbon footprint in one fell swoop. 

Since then, opinion has shifted significantly, and carbon offsetting is now one of the most common reasons that a company risks being accused of greenwashing. As with green energy contracts, which have been met with similar criticism, the issue is that nothing about your organisation’s carbon footprint fundamentally changes. You are still producing the same amount of CO2e, and falling back on offsetting can hamper real progression. 

That being said, carbon offsetting does still have a place. However, it should come at the end of your net zero strategy, not at the start. For some organisations, eliminating a percentage of their emissions may prove impractically expensive. It is here that responsible, well-thought-out carbon offsetting schemes have a role to play. 

Net Zero is Being Hampered by Grid Connection Issues 

While many in the renewable energy and storage sector have foreseen this issue for some time, the growing backlog of projects awaiting grid connection works became a major headline this month. Billions of pounds of green energy projects are on hold as they await a connection to the UK’s electricity system, with new projects likely to face a wait of between 10 and 15 years to be connected. The physical connection to a site is only a small part of the issue: delays stem from the need to reinforce distribution networks that were never designed to handle large amounts of distributed generation.  

Ofgem have been forced to step in to call the delays unacceptable, but this appears to have only added to finger pointing from different parties as to who is truly at fault. National Grid in their defence argued that while they acknowledge the issues, a fundamental lack of Government investment is ultimately responsible. In the meantime, some 280GW of projects waits in the pipeline for a connection, significantly hampering the UK’s net zero ambitions. 

For sites looking to invest in on-site generation or upgrade their site infrastructure with new technologies that bring with them a significant increase in power demand, they may face the need for new grid connection works themselves. As well as lengthy delays, this can also be prohibitively expensive for many organisations. Instead, one alternative is to invest in a battery energy storage system, which can avoid the need for new grid connections works by buffering site demand to prevent agreed supply capacity being exceeded. Power being fed back into the grid is often just as much a concern for DNOs as a site’s demand, and a battery can also help to avoid this issue by storing electricity generated on site and using it when required, rather than feeding it back to the grid.