Four predictions for the post-Brexit UK energy sector
The world and its financial markets are anxiously awaiting news of the terms and conditions of Britain’s departure from the European Union. While there is still much to be negotiated, analysts and industry insiders are beginning to piece together exactly what Britain’s ‘leave’ vote means for the energy sector.
As it stands, some outlets have forecast minimal impacts because the price of oil, gas and coal is set by international markets and not the EU. However, others have foreseen dire consequences for decarbonisation and the green economy. Here are four energy predictions gaining traction in the wake of Brexit — and the reasons why.
Consumers could see larger energy bills
The National Grid has warned that energy bills will rise and energy security will fall if the UK is excluded from Europe’s Internal Energy Market (IEM). Last month, a report by University College London’s Institute for Sustainable Resources found that the UK could seek IEM access as part of a Customs Union, similar to the arrangements Monaco and Turkey have, but terms of trade will be up for negotiation outside of this scenario.
Hinkley Point likely won’t come off the ground
Experts have come forward stating that the much-delayed £20 billion nuclear power station in Somerset is “unlikely” to be completed. Though the plant’s would-be owner, France’s EDF, had denied that Brexit will impact Hinkley, others have cast doubt on the company’s ability to invest so heavily in such an uncertain climate.
Domestic fuel costs won’t change
Consultants Frost & Sullivan have predicted that the cost of fuel in the UK is likely to remain the same. However, the pledge by the Leave side to eliminate VAT on fuel will probably not be enacted, and would only have accounted for a five percent cost reduction as it was.
There will be turmoil for North Sea oil
With a second Scottish independence referendum looking inevitable, the investment climate will likely remain unstable for North Sea oil in the foreseeable future. Bloomberg reported that, in the event of Scottish independence, reserves of oil and gas may be split along the ‘median line’ used to allocate fishing rights. For now, the only certainty is uncertainty: many companies will likely pause North Sea oil investment until the Brexit dust has settled.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.