Apr 8, 2021

SSE Thermal and Equinor plan two UK low-carbon power plants

SSEThermal
equinor
lowcarbon
Hydrogen
Dominic Ellis
3 min
SSE Thermal and Equinor unveil Keadby 3 900MW station fuelled by natural gas and fitted with CCS technology and 'world first' Keadby Hydrogen plant
SSE Thermal and Equinor unveil Keadby 3 900MW station fuelled by natural gas and fitted with CCS technology and 'world first' Keadby Hydrogen plant...

SSE Thermal and Equinor have unveiled plans to develop two low-carbon power stations in the UK’s Humber region.

Keadby 3 comprises a 900MW power station fuelled by natural gas and fitted with carbon capture technology to remove the CO2 from its emissions (pictured). The captured CO2 would then be transported using shared pipelines before being securely stored under the Southern North Sea. 

Keadby 3, whose formal consultation concluded in early 2021, is currently progressing towards the submission of a development consent application this Spring. Keadby 3 would have the potential to come online by 2027, in line with Government ambitions for ‘Track 1’ industrial cluster projects.

Keadby Hydrogen power station would have a peak demand of 1,800MW of hydrogen, generating around 900MW of electricity with zero emissions at the point of combustion. 

Both plants would replace older, carbon-intensive generation on the electricity grid, providing flexible and efficient power to support intermittent renewable generation and maintain security of supply through the net zero transition.

Keadby 3 could deliver 15% of the target for 10MT of carbon captured annually by 2030, while the demand from Keadby Hydrogen could account for a third of the 5GW hydrogen production goal.

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SSE Thermal claims it will be one of the UK’s first power stations with carbon capture and storage (CCS) technology, and the 'world’s first' major 100% hydrogen-fired power station, although developments are constantly being announced globally, including ones in Virginia, Ohio and Pennsylvania

Final investment decisions will depend on the progress of policy frameworks that are commensurate with the delivery of the infrastructure.

The projects would utilise the parallel hydrogen and CO2 pipeline infrastructure being developed by the Zero Carbon Humber (ZCH) partnership – which includes Equinor and SSE Thermal – and offshore CO2 infrastructure developed by the six-member Northern Endurance Partnership (NEP), which includes Equinor. Both ZCH and NEP won public funding from the UK’s Industrial Strategy Challenge Fund in March.

Equinor’s H2H Saltend project will be the first to connect into the ZCH infrastructure and will come online by the mid-2020s. Like the additional hydrogen that would be produced for the Keadby Hydrogen project, H2H Saltend will provide low-carbon hydrogen to already-identified customers.

As part of the agreement announced today, SSE Thermal and Equinor are also developing options for hydrogen blending at SSE Thermal’s Keadby 2 project (already under construction), aiming to progressively decarbonise the UK’s newest and most-efficient power station.

Today’s agreement builds on the longstanding partnership between Equinor and SSE in the UK, which includes joint ownership of the Aldbrough Gas Storage facility in East Yorkshire, and the joint venture to build the Dogger Bank Offshore Wind Farm, the largest offshore wind farm in the world.

Stephen Wheeler, Managing Director of SSE Thermal, said: “With over 12 million tonnes of annual carbon emissions, ideal transport and storage options, and major energy and industrial companies working together, the Humber has to be at the centre of the UK’s decarbonisation strategy.”

Grete Tveit, Senior Vice President for Low Carbon Solutions at Equinor, said: "We believe these technologies are vital for heavy industry, flexible power and other hard-to-abate sectors to achieve net zero emissions, while also ensuring a just transition for industrial communities."

Andrew Percy, MP for Brigg, Goole and the Isle of Axholme said: "Large-scale development and investment of this kind will bring both local employment and supply chain value, and I am committed to working closely with both SSE Thermal and Equinor to ensure these opportunities are realised for the region."

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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