A look back at 2020

As we take our first steps into 2021, we look back at the biggest developments in the UK energy markets in 2020, setting us up for the significant year ahead.

As 2019 turned into 2020, we were still waiting for the Energy White Paper (EWP), a document which had been delayed from the previous summer. However, other policy announcements got the ball rolling, starting in March with BEIS consulting on allowing onshore wind and solar in the next Contracts for Difference round, as well as setting out measures to protect customers during the COVID-19 pandemic. In October, at the Conservative Party conference, the Prime Minister set out plans to ‘Build Back Greener’ from the COVID-19 pandemic, confirming the 2019 Conservative manifesto commitment to increase the offshore wind capacity target to 40GW by 2030. Additionally, he announced a new target of 1GW of floating offshore wind by 2030.

The next major announcement was the Prime Minister’s 10 Point Plan for a Green Industrial Revolution, released on 18 November. In it, the PM announced targets to remove 10Mt of carbon dioxide a year by 2030 through carbon capture, to aim to generate 5GW of low carbon hydrogen production capacity by 2030, as well as 600,000 heat pump installations every year by 2028.


The policy releases did not stop after that. The week after, the government published the National Infrastructure Strategy, setting out its plans for infrastructure investment, covering issues such as energy market reform, funding models and regulatory frameworks. Soon after that, the government announced a new interim greenhouse gas emissions reduction target of 68% for 2030, on 1990 levels. The Climate Change Committee then published its advice for the sixth carbon budget (2033-37), including that emissions must fall 78% by 2035, compared to 1990 levels.

All the while, rumours around the release date of the EWP swirled, with some commentary suggesting it was waiting on the Brexit agreement. On 14 December, the EWP arrived, promising a very active 2021 for the sector, with consultations covering areas such as autoswitching, third party regulation, affordability and fairness, and transparency. In the same week, the Treasury published its Initial Analysis of Green Transition Review. This was all capped off by the post-Brexit trade agreement, published on 24 December, and setting out arrangements for interconnectors, trading and the UK Emissions Trading Scheme.

With another national lockdown announced this week, the pandemic is certain to remain top of the policy agenda in 2021. This year would have been busy for BEIS even without the pandemic – the government has put an awful lot on its plate for this year, with a raft of consultations and calls for evidence to take place soon, all of which we will cover in the Daily Bulletin and Energy Spectrum.

Related thinking

Commercial and market outlook

Cornwall Insight responds to the announcement of an Energy Bill in the Queen’s Speech

The Queen’s Speech this week included a much-anticipated announcement that an Energy Bill will be introduced at some point over the next parliamentary session. The Bill is a logical conclusion of policy development in the period since the net zero commitment was made in the summer of 2019. It accommodates...

Commercial and market outlook

Ofgem outlines thinking on protecting credit balances and RO payments

This article is an extract from our Energy Spectrum publication issued on Monday 25 April. If you are interested in receiving critical policy, regulatory, market and transactional developments across the energy sector, and would like a free full sample of Energy Spectrum, please request a copy here. You only need...

Low carbon generation

Surprising decision by the Secretary of State for BEIS regarding the Capacity Market auction

An interesting and surprising decision by the Secretary of State for BEIS regarding the Capacity Market auction parameters for the upcoming T-1 auction being held on 15 February. The procurement target has been lifted from 4.5GW (as set in the draft parameters in July 21) to 5.361GW. This is notably...

Home supply and services

The risks of short-term interventions distorting long-term incentives in the energy market

Christmas 2021 was not a time of cheer for the energy industry and its customers. There is acute stress on energy suppliers and consumers from current bills - let alone where they may move to in the coming year. And it seems the political and regulatory debate has moved on...

Commercial and market outlook

2021’s most exciting ‘Charts of the week’

Some of our team have looked back throughout 2021 and picked their most exciting 'Chart of the week'. Read about their choices and click through to read the full 'Chart of the week'. To do so, you need a free Cornwall Insight account which is easy to create here. Green...

Heat networks

Heat network approaches being developed by devolved administrations and UK government

A number of further consultations on the policy approaches for heat networks have been issued in recent weeks:  The Scottish government published its draft Heat Networks Delivery Plan on 15 November, outlining how it will quintuple heat demand provided from heat networks in Scotland by 2030; and The UK government issued...

FAQs

FAQ for the Daily Bulletin and Energy Spectrum

Why is the Daily Bulletin and Energy Spectrum changing? We have recently launched our new customer portal where you can see all of your subscription insight services in one place, easily access all the archived issues, as well as download all your publications and reports. To access these, you will...

Home supply and services

Introducing the Green Gas Levy

In Autumn 2021 the Green Gas Support Scheme (GGSS) will be launched, supporting decarbonisation of the gas grid as the UK aims to reach net zero emissions by 2050. The GGSS will predominately focus on providing financial incentives for biomethane (green gas) injection in the grid and, in order to...