Tag Archives: fossil

UK’s soaraway financial support to foreign fossil fuels Updated for 2026





The UK government financial support to fossil fuel industries abroad has soared to over £1 billion a year under the Coalition, according to an analysis by Greenpeace Energydesk.

The total support for fossil fuel industries amounts to £1.76bn-worth of Export Credit Guarantees between 2010-2014, underwritten by taxpayer’s money.

And of that, almost £1.1bn was handed out in the last financial year, 2013 / 2014, more than ten times up on two years previously.

This is despite PM David Cameron recently publicly decrying fossil fuel subsidies, and the financial backing breaks a promise set out in the coalition government’s manifesto.

David Cameron denounced “economically and environmentally perverse fossil fuel subsidies which distort free markets and rip off taxpayers” at the Ban Ki Moon climate summit in September.

The coalition manifesto stated the new government would use Export Credit Guarantees for “innovative and green technologies, instead of supporting investment in dirty fossil-fuel energy production.”

UKEF’s fossil fuel support hits new heights

UK Export Finance Agency (UKEF) is authorised by the government to decide what to financially back and their main instrument is the Export Credit Guarantee. These are designed to minimise the risk of making deals abroad for UK exporters.

In practice this means UKEF can work with banks to partially underwrite bonds that are a sort of insurance policy on the contract – and expected by the overseas buyer to be provided by the exporter. This supports the deal by releasing the working capital paid by the overseas buyer to the exporter, which can be used instead of placing it with the bank.

UKEF also provides insurance for UK exporters to protect against non-payment or other issues that commercial insurance won’t provide, as well as sometimes lending money to the buyer of the UK export so that they can pay them directly.

In the four years since the coalition government came into power in 2010, UKEF has announced significant support for a range of overseas fossil fuel projects – from backing for coal mining in Russia to oil and gas exploration in Brazil.

Last financial year was a particularly big one in terms of financial backing for fossil fuel projects, with over £380 million going to Brazilian state-controlled energy giant Petrobras – which also happens to be embroiled in an ongoing corruption scandal.

This was as part of a US$1 billion – around £660 million at current rates – line of credit signed with the firm in 2012. The deal involves UK drilling services for oil and gas exploration in Brazil, and presumably offshore exploration, too, since one of the UK firms specialises in subsea engineering.

There was also what UKEF called its “largest limited recourse project financing” that it has ever supported – around £475 million so going to support the build of petrochemical complex in Saudi Arabia by a UK construction firm.

UKEF’s big favourite: Russian coal

Since 2010 there has been six instances of financial support pledged to Russia by UKEF, totalling around £430 million. This includes hefty support for Russian coal projects, financial backing for state-owned gas giant Gazprom to receive engineering equipment from Rolls-Royce Power Engineering, and expertise and software to other fossil fuels projects.

Around £67 million of the UKEF backing for Russian fossil fuel developments has even gone to US-based Joy Mining, which has a manufacturing arm in the UK. The money has supported the export of mining equipment to Siberian Coal & Energy Co (known as SUEK) and Southern Kuzbass Coal Co OAO.

SUEK is the largest coal producing company in Russia and is one of the companies that the UK imports its coal from – roughly 30% of Russian coal imports to the UK. A Greenpeace investigation found the UK spends nearly a billion pounds each year importing coal from Russia.

SUEK’s chairman Andrew Melnichenko has connections to the the UK government, the investigation found. His long-standing advisor George Cardona, is a former special advisor to Geoffrey Howe.

The Energydesk analysis comes after reports that the German government will give financial support for the export of coal-fired power-plants by the country’s manufacturers. Late last year French President Francois Hollande announced that France will stop public export credits for coal projects in developing countries.

A recent report by the Overseas Development Institute (ODI) revealed that the UK was still giving close to £1.2 billion annually to support exploration for oil, coal and gas. That includes both national subsidies (including tax breaks for North Sea oil exploration), and some $663 million (£425m) per year in public finance for overseas exploration including in Siberia in Russia, Brazil, India, and Indonesia.

But as reported in The Ecologist, those figures related to 2012. The new figures for UKEF support for fossil fuels in 2013 / 2014 are certain to push that total to a new record.

 


 

This article was originally published on the Greenpeace Energydesk blog. This version has been edited by The Ecologist.

 




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Leave most fossil fuels in the ground, or fry Updated for 2026





The sheer scale of the fossil fuel reserves that will need to be left unexploited for decades if world leaders sign up to a radical climate agreement is revealed in a study by a team of British scientists.

It shows that almost all the huge coal reserves in China, Russia and the US should remain unused, along with over 260 billion barrels of oil reserves in the Middle East – the equivalent of Saudi Arabia’s entire oil reserves.

The Middle East would also need to leave over 60% of its gas reserves in the ground.

The team from University College London’s Institute for Sustainable Resources (ISR) says that, in total, a third of global oil reserves, half of the world’s gas and over 80% of its coal reserves should be left untouched for the next 35 years.

This is the amount of fossil fuel, they estimate, that the world must forego until 2050 if governments agree on a realistic programme to ensure that global warming does not exceed the 2°C increase over pre-industrial levels agreed by policy makers.

The authors of the report, which is published in the journal Nature, say some reserves could be used after 2050, so long as this kept emissions within the CO2 budget, which would be only about half the amount the world can afford to use between now and 2050.

They say a factor that might help in the use of fossil fuels is that carbon capture and storage (CCS) is expected to be much more widely deployable by mid-century, assuming it to be a mature technology by then.

No space for any more extreme energy

The study, funded by the UK Energy Research Centre, concluded that the development of resources in the Arctic and any increase in unconventional oil – oil of a poor quality that is hard to extract – are also “inconsistent with efforts to limit climate change”.

For the study, the scientists first developed an innovative method for estimating the quantities, locations and nature of the world’s oil, gas and coal reserves and resources. They then used an integrated assessment model to explore which of these, along with low-carbon energy sources, should be used up to 2050 to meet the world’s energy needs.

The model, which uses an internationally-recognised modelling framework, provides what the authors describe as “a world-leading representation of the long-term production dynamics and resource potential of fossil fuels”.

The lead author, Dr Christophe McGlade, research associate at the ISR, said: “We’ve now got tangible figures of the quantities and locations of fossil fuels that should remain unused in trying to keep within the 2°C temperature limit.

“Policy makers must realise that their instincts to completely use the fossil fuels within their countries are wholly incompatible with their commitments to the 2°C goal. If they go ahead with developing their own resources, they must be asked which reserves elsewhere should remain unburnt in order for the carbon budget not to be exceeded.”

The prospects for an amicable discussion between China, Russia, the US and the Middle East on how to share the pain of leaving these reserves unexploited will demand exceptional diplomacy from all parties.

Prudent investors, keep clear of fossil fuels!

The report’s co-author, Paul Ekins, the ISR’s director and professor of resources and environmental policy, said: “Companies spent over $670 billion (£430 billion) last year searching for and developing new fossil fuel resources.

“They will need to rethink such substantial budgets if policies are implemented to support the 2°C limit, especially as new discoveries cannot lead to increased aggregate production.

“Investors in these companies should also question spending such budgets. The greater global attention to climate policy means that fossil fuel companies are becoming increasingly risky for investors in terms of the delivery of long-term returns. I would expect prudent investors in energy to shift increasingly towards low-carbon energy sources.”

After years of halting progress towards an effective international agreement to limit fossil fuel emissions so as to stay within the 2°C temperature threshold, hopes are cautiously rising that the UN climate talks to be held in Paris at the end of 2015 may finally succeed where so many have failed.

But reaching agreement will be only the first step: effective enforcement may prove an even bigger problem.

 


 

Alex Kirby writes for Climate News Network.

 

 




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FBI harassing fossil fuel activists in the Pacific northwest Updated for 2026





In August 2014, two activists with the environmentalist group Rising Tide spent a week riding the backwoods highways of Idaho monitoring a megaload.

That’s big rig hauling equipment for processing tar sands oil that’s wide enough to take up two lanes of road, too high to fit under a freeway overpass, can be longer than a football field, and can weigh up to 1,000,000 pounds.

They had no idea that they would soon be wrapped up in a Federal Bureau of Investigation probe that encompassed three states and several environmentalist groups.

Helen Yost of Moscow, Idaho, and Herb Goodwin of Bellingham, Washington, have spent years travelling through area the bioregion of Cascadia to halt megaloads, from Washington and Oregon to Idaho and up through Montana.

They are used to harassment from law enforcement. That week, Goodwin said, the two were stopped on average twice a night, by law-enforcement agencies ranging from state troopers to local police in Sandpoint and Moscow.

Usually carrying equipment to upgrade and expand tar sands mining in Alberta, Canada, megaloads make a tortuous crawl along rural roads at night to avoid traffic, questions, and complaints.

Organizing resistance – too successful to ignore

But activists like Goodwin and Yost have been remarkably successful at organizing the people in mountain country. In August 2013, more than a hundred people in Idaho participated in a four-day mobile blockade of a megaload on US 12 headed for the Nez Perce reservation.

The Nez Perce Nation said the megaloads threatened treaty-reserved resources, historic and cultural resources, and “tribal member health and welfare.” Tribal chair Silas Whitman was one of the blockaders arrested, while activists from Wild Idaho Rising Tide (WIRT), the group Yost helped form, played important support roles.

Rising Tide North America’s network, spun out of the Earth First! grassroots environmentalist movement in 2005, now spans the Cascadia bioregion, with chapters in Seattle, Spokane, Olympia, Bellingham, and Vancouver, Washington; Portland, Oregon; Moscow, Idaho; Missoula, Montana; and Vancouver, B.C.

In the last six months, they have collaborated on an average of a blockade per month, and have helped to spearhead the movement against fossil fuel exports through the Pacific Northwest.

The network has worked in solidarity with indigenous peoples to halt megaloads, has marched in pickets with unions to shut down ports, and has aided community groups to stop permits for coal, oil, and gas terminals on the Pacific Coast.

The FBI steps in

On Oct. 9, Herb Goodwin was approached at his home in Bellingham by two FBI agents asking about a group called Deep Green Resistance (DGR).

The FBI and Joint Terrorism Taskforce had previously contacted several members of DGR and their families both by phone and through home visits in places as dispersed as Georgia, New York and Seattle.

Goodwin was alarmed but not surprised when the lead agent “flashed a badge and claimed to be from the FBI.” Refusing to tell him anything beyond her first name, ‘Brenda’, she provided a sloppy excuse for not presenting a business card.

The other person identified himself as ‘Al Jensen’, and his card identified him as a member of the Criminal Intelligence Unit of the Bellingham Police Department.

“Jensen jocularly mentioned that we knew each other from the Occupy movement / camp and train blockade, attempting to coax up conversation”, Goodwin said in an e-mail. “I did not take the bait.”

The Occupy encampment in Bellingham lasted for two months in the winter of 2011-12. Goodwin was one of four people arrested during the eviction, which came about two weeks after the mass blockade of a coal train Jensen mentioned. He says he recognized the detective’s face, but didn’t know his name:

“I think he was one of the undercover guys who was shifting in and out of our camp for the couple of months we had the camp up. I got a lot more surveillance after the Bellingham coal train blockade. I had people scoping out my apartment off and on for a couple months after that … I could see people scoping me from cars with binoculars.”

Goodwin says he is not a member of DGR, but suggests that it has drawn the interest of the FBI for advocating an ‘underground’ strategy to dismantle industrial civilization. At the same time, he adds,

“all the people remotely connected with DGR call themselves ‘aboveground,’ and they say that they’re going to be involved in the same kind of aboveground actions that other activist groups are, but as far as I know they haven’t really done anything.”

There is no love lost between DGR and Rising Tide. In February 2014, Rising Tide North America signed a letter along with some 40 other groups, such as Greenpeace, the National Lawyers Guild, and Tar Sands Blockade, petitioning the University of Oregon to cancel a keynote address by one of DGR’s leaders at an environmental-law conference on the grounds that the group’s transphobic beliefs promote “exclusionary hate that breeds an environment of hostility and violence.”

Questioning a Rising Tide activist about DGR seemed to blur some important differences between the groups, but activists still saw between the lines. The FBI inquisition was an obvious campaign to silence dissent, Yost says: “When Herb got visited we knew it wouldn’t be long before they came around to someone from Idaho.”

Habeas corpus battle in rural Idaho

On 9th October, the same day Goodwin was visited by the FBI, an activist named Alma Hasse attended a public meeting of the Payette County Planning and Zoning Commission to testify against the expansion of a gas-processing facility in the area, along the Oregon border northwest of Boise.

She recommended that the five Commission members recuse themselves from the permitting process on the grounds that they had signed oil and gas leases with Alta Mesa, the company seeking approval. (All three of the county commissioners have signed oil and gas leases as well.)

An associate of Yost and Goodwin, Hasse has worked in rural Idaho for years, agitating and organizing against fracking and oil trains. Cofounder of Idaho Residents Against Gas Extraction (IRAGE), which works with WIRT, she regularly attends Payette County government public meetings and brings up problems with their processes.

This time, something was different. The Commission members closed the meeting to the public, brusquely challenging Hasse’s testimony, and ordering her to leave or face arrest. After insisting on her right to participate in the public meeting, she was arrested and kept in jail for a week without being charged or even processed.

In protest against her mistreatment by the Commission, Hasse refused to give her name. Though the police knew her, and called her ‘Alma’ when they talked about her, they refused her requests for a telephone call until she obtained a PIN number, which she could only get after being processed.

Police refused to process Hasse until she volunteered her name. Instead of booking her as ‘Jane Doe’ (a formality, since they already knew her name), they kept her in a cell by herself.

“I felt like it was a game”, Hasse says. “They had my name. I had to sign in to testify at the public hearing, so both my name and my address were on the sign-in sheet.” She also had been granted a permit to carry a concealed weapon by the county sheriff’s office, so they had her Social Security number, date of birth, and fingerprints.

When police asked for her name, Hasse would tell them that they already knew her name, and that she wanted to talk to her attorney. They refused, which she insists was a violation of her civil rights and right of habeas corpus.

Only after she drew attention to her incarceration by going on a hunger strike, supported by a media campaign led by her husband and civil disobedience spearheaded by her daughter and WIRT, was she allowed to go free.

“I felt like I had to stand on principle”, Hasse says. “At some point, we as citizens have to stand up and assert our rights, because if we don’t, we’re just going to be steamrolled.”

When the FBI sends texts

On 10th December, Helen Yost of WIRT received three phone calls from an unfamiliar number in Coeur d’Alene, Idaho. Thinking they were from a telemarketer, she did not answer them. But nine days later, she awoke to another call from the same number. She had anticipated the text message that followed for years.

“Helen, I am trying to get a hold of you to speak with you. An issue has come up, and I need to speak with you. Please give me a call. I am an FBI agent. SA Travis Thiede.”

Yost responded within ten minutes: “NO!”

Agent Thiede’s reply came four minutes later: “OK, I understand, just wanted to have a conversation with you. Thanks.”

According to his LinkedIn profile, Thiede joined the FBI in 1997 after serving in the Army and as a police officer in Colorado Springs, Colorado. He was involved in the providing security at the 2002 Winter Olympics in Salt Lake City and the investigation of a power-station bombing on the games’ last day.

Yost believes that the agent’s calls were related to her role as an organizer with WIRT. On 10th December, the day the first ones were placed, she had just returned to Moscow from a road trip organizing for the third annual Stand Up! Fight Back! Against Fossil Fuels in the Northwest!

She’d been in Sandpoint on 8th December and in Spokane, about 35 miles from the FBI office in Coeur d’Alene, on 9th December.

Continuing harassment

After years of dedicated activism, Hasse and Yost were not surprised. Groups like IRAGE and Rising Tide have felt the presence of the FBI for years.

The intensity of repression depends on the success of their campaigns, and not since the late 1990s has the Pacific Northwest seen so much mass action for environmental causes. During that period, the FBI inaugurated a broad strategy of repression, known by activists as the Green Scare, to track down suspects implicated in actions deemed ‘eco-terrorist’.

According to leaked documents, its surveillance net was so large that officers even tailed random Subaru-driving patrons of a farmers’ market. Earth Liberation Front spokesperson Craig Rosebraugh was subpoenaed eight times to testify before grand juries.

The FBI’s Operation Backfire led to 13 people being indicted and nine convicted on various charges, including arson. Of the other four, one committed suicide in jail, two are still fugitives, and one escaped prison time by turning snitch, but was later jailed on heroin charges.

That era is said to have ended in 2006, but the bureau is still using agent provocateurs to infiltrate environmental and social-justice movements. (One was recently arrested for failing to register as a sex offender and for credit-card fraud.)

In 2008, a young man named Eric McDavid was sentenced to more than 19 years in prison, after an agent provocateur who called herself ‘Anna’ seduced him into talking about committing acts of sabotage at a cabin in Northern California the FBI had rented and wired for her.

Repressive ‘ag-gag’ laws against fossil fuel activists

Legislation such as the 2006 federal Animal Enterprise Terrorism Act, largely drafted by the far-right corporate American Legislative Exchange Council, has expanded the criminalization of advocacy for the environment and animal rights.

Because of Idaho’s new ‘ag-gag’ law – enacted in February after animal rights activists released videos of dairy workers abusing cows, it outlaws filming or recording agricultural operations without permission – activists in Payette County are afraid to take photographs of new fossil fuel wells and processing plants.

The surveillance has continued apace, as well. In 2011, activists with WIRT heard from an arrested megaload blockader that the local police were communicating with the FBI. They wrangled two meetings with the police and sheriff, but did not get any substantial information regarding the extent of federal involvement.

That fall, minutes after Yost received a call from an activist telling her that a protest was about to begin, police showed up and shined flashlights into people’s cars. She believes they learned the protest’s location by tapping her phone.

The local sheriff also approached associates of a professor at a university in Spokane and asked them about why he ‘Liked’ WIRT’s Facebook page.

In June 2013, the FBI called the parents of an activist with Portland Rising Tide, and six other activists who have worked with Rising Tide Seattle were visited by FBI terrorism expert Matthew Acker and forensics leader Kera O’Reilly. There was also a third agent, who did not give his information.

The agents asked about the movement against tar-sands and fossil-fuel shipments. It was apparent immediately that the target was the Summer Heat action scheduled for that July 27, a joint effort with 350.org that would send a hundred or more kayaks and boats into the Columbia River for a symbolic blockade on to protest coal barges, oil-by-rail, and gas pipelines.

“My [attorney] was not able to find out what or why they were bothering my sweet folks, but I will tell you why”, one activist whose parents were visited wrote.

“Its because Portland Rising Tide is outreaching, training, and organizing hundreds of Pacific NWers of all age groups to engage in a level of civil disobedience not seen in decades. We are going to do it to save our neighborhoods, our communities, our salmon, and our climate. And that scares the shit out of the powers that be.”

 


 

Alexander Reid Ross is a contributing moderator of the Earth First! Newswire and works for Bark. He is the editor of Grabbing Back: Essays Against the Global Land Grab (AK Press 2014) and a contributor to Life During Wartime (AK Press 2013).

This article originally appeared at DefendingDissent.org.

 

 




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Investors falter as fossil fuels face ‘perfect storm’ Updated for 2026





The world’s investors – both big and small – think primarily in terms of making good returns on their money. And, over the years, investing in the fossil fuel industry has been considered a safe bet.

Yet maybe, just maybe, attitudes are changing – and fairly profoundly – as financial analysts warn that the industry faces a ‘perfect storm’ in 2015.

The Carbon Tracker Initiative (CTI), a London-based financial thinktank, analyses the energy industry and lobbies to limit emissions of climate-changing greenhouse gases.

On one side, CTI says, the industry is being buffeted by a crash in oil prices and a drop in demand. On the other, there’s the threat of increasing regulation aimed at cutting GHG emissions and a worldwide growth in renewable forms of energy.

Cool reception

Anthony Hobley, CTI’s chief executive, says investors are realising that the energy world is changing.

“At one stage, when we talked to investment firms about the risks of investing in fossil fuels we were given a cool reception”, Hobley told Climate News Network.

“Now we are being invited to brief the big investment funds. Investors have an enormous amount of power – they are weighing up the risks of investing in fossil fuels and wondering just how safe their money is.”

The CTI has long warned of the dangers of a ‘carbon bubble’, with investments in fossil fuels becoming ‘stranded assets’ due to the imposition of stricter regulatory controls on emissions and the widespread adoption of renewable energy.

“The carbon bubble is not going to burst in 2015”, Hobley says. “The transition from fossil fuels to other forms of energy is going to take place over several decades.

“But a combination of more regulations, new technologies, the falling price of renewable energy, and the need for a more efficient use of resources, is making investors rethink their investment strategies.”

Energy companies are also reconsidering their plans. EON, Germany’s largest power utility, announced earlier this month that it would be reorganising its structure in order to focus on the development of renewables.

Concern in boardrooms

A worldwide campaign calling for divestment in fossil fuels is another factor causing some concern in the boardrooms of the big fossil fuel companies.

The industry is powerful and, despite the problems it’s facing, it is unlikely to collapse anytime soon. But it has been severely damaged by recent events.

Goldman Sachs, the global investment bank, says a trillion dollars of investments in various oil and gas projects around the world are at risk – or stranded – due to the fall in oil prices.

A rapid rise in production from US shale deposits in recent years has caused a glut on the global oil market.

Analysts say a significant slowdown in the rate of economic growth in China is also a major factor behind the present fall-off in oil prices, and in the big declines in coal prices on the world market.

 


 

Kieran Cooke writes for Climate News Network.

 

 




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UK’s ‘unlawful’ £35 billion support to fossil fuels in ECJ challenge Updated for 2026





An innovative energy company today launched a legal challenge to UK Government electricity market ‘reforms’ in the European Court of Justice.

According to Tempus Energy, which brought the challenge, the new system represents an “unlawful subsidy” worth as much as £2.5 billion a year to fossil fuel power generators, for a 15-year period.

As part of the Electricity Market Reform, the Capacity Market was set up to offer subsidies to reliable forms of power capacity to switch in when needed to balance demand.

This includes both the supply of new power on demand (‘supply side’); and cuts in demand for power from power users (‘demand side’). The intended result is to create a 50 GW back-up capability for when the system is tight. 

But Tempus says the way the Capacity Market has been designed violates the EU’s State Aid rules by prioritising fossil fuel electricity generation over “cheaper and more reliable” demand-side options.

Specifically, ‘supply side’ contracts will last for 15 years, but inexplicably, ‘demand side’ contracts will last for only one year – giving power generation a clear advantage over demand reduction.

An ‘engrained bias’ in favour of building new generation assets

Tempus CEO Sara Bell said: “The Capacity Market was originally set up to keep the lights on at the lowest possible cost; a format that has been used very successfully in the US.

“But an engrained, institutional bias in favour of building new assets to boost supply means that cost effective ‘no build’ technologies for managing demand have been ignored. This will push up electricity bills needlessly and commit consumers to paying for capacity that we would not need if we invested in building demand-flexibility, for those who want to use it.”

In the first year of the Capacity Market alone, she added, obligations of up to £2.5bn for expensive peaking power stations to be switched on will be created.

Those costs, plus year on year additional peaking power costs for the next 15 years, will be passed onto customers, potentially costing them over £35 billion – at a time when over 2,280,000 million households are living in fuel poverty.

Under regulations made under the Energy Act, the Government plans to award new generators with ‘capacity contracts’ guaranteeing a revenue stream for up to 15 years to provide energy when called upon by National Grid.

Conversely, customers who volunteer to turn down energy use during peak times, and the companies that aggregate capacity created by customers, will be awarded capacity contracts of just one year.

Notably, the generation contracts will mostly involve the consumption of fossil fuels, often in inefficient plant, and financial benefits will go to large, centralised power companies. By contrast ordinary consumers can benefit from reducing their power usage at times of peak demand.

Marcin Stoczkiewicz, head of climate and energy at ClientEarth, said: “If allowed to go ahead, the UK’s ‘capacity mechanism’ will artificially prop up the existing coal-reliant energy system by paying generators extra to produce more electricity at peak times.

“The costs will be passed on to consumers, regardless of when they use power. This is bad for the environment and for our pockets. We are supporting their action because it’s crucial to driving progress on climate change.”

One year contracts ‘not a viable proposition’

The problem with one year contracts is that technology investments are required to enable equipment to be switched off automatically at times of strong power demand, and these cannot reasonably be paid off in a single year, says Bell.

“The one year contracts offered for demand flexibility are not a viable proposition to customers who would, for a longer revenue stream, be able to invest in flexible technology that would save money and energy in the long term while making our system more secure.”

“Instead, the lack of commitment to innovation from the Government will stymie investment and therefore the advancement of a smart industry that could fundamentally transform our energy economy.”

And this is Tempus’s business model: it aggregates the power-saving potential of many households and businesses using smart technology to automatically shift non-time critical energy use into the cheapest price period. It then shares the benefits with its providers.

By bringing the challenge, Tempus Energy aims to obtain a ruling by the European Court that the state aid approval was unlawful, which will force the EU Commission to hold a formal inquiry.

The case may therefore have a destabilising impact on the first Capacity Market Auction – scheduled for 16th December – as well as challenging the validity of the subsidy scheme in its current form.

However a DECC Spokesperson insisted: “We are fully confident in this auction. The European Commission has concluded that the Capacity Market is within European State aid rules. This challenge will have no impact on the running of the capacity auction in December.”

Europe-wide repercussions

In the US, 10-12% of power is now provided by customers with demand flexibility technology. The EU legal challenge will raise a serious question for investors as to why the UK cannot emulate the successful way in which other countries, like the US, use demand-side capability to cost effectively keep the lights.

As a result of the UK Capacity Market approval, other European countries are lining Capacity Market policies that also discriminate against demand-side resources in favour of generation, said Bell:

“In countries where renewables generation already makes up a significant proportion of the grid mix, such as Germany, the legal challenge will be particularly beneficial as demand side flexibility is the only scalable means to efficiently use ‘wrong time’ renewable generation, which is otherwise wasted. This challenge will ensure other countries are forced to develop level playing fields for all resources.”

Up to 40% of the UK electricity grid is underutilised at a given time. By increasing the use of smart technology to manage energy demand spikes, it is possible to utilise much more of the grid.

That would reduce the need for spending more on infrastructure (paid for by consumers) as well as limiting the need to pay for expensive ‘peaking’ generation, and enabling better access to renewables at times when they are cheap and plentiful.

 

 


 

Oliver Tickell edits The Ecologist.

 




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UK’s ‘unlawful’ £35 billion support to fossil fuels in ECJ challenge Updated for 2026





An innovative energy company today launched a legal challenge to UK Government electricity market ‘reforms’ in the European Court of Justice.

According to Tempus Energy, which brought the challenge, the new system represents an “unlawful subsidy” worth as much as £2.5 billion a year to fossil fuel power generators, for a 15-year period.

As part of the Electricity Market Reform, the Capacity Market was set up to offer subsidies to reliable forms of power capacity to switch in when needed to balance demand.

This includes both the supply of new power on demand (‘supply side’); and cuts in demand for power from power users (‘demand side’). The intended result is to create a 50 GW back-up capability for when the system is tight. 

But Tempus says the way the Capacity Market has been designed violates the EU’s State Aid rules by prioritising fossil fuel electricity generation over “cheaper and more reliable” demand-side options.

Specifically, ‘supply side’ contracts will last for 15 years, but inexplicably, ‘demand side’ contracts will last for only one year – giving power generation a clear advantage over demand reduction.

An ‘engrained bias’ in favour of building new generation assets

Tempus CEO Sara Bell said: “The Capacity Market was originally set up to keep the lights on at the lowest possible cost; a format that has been used very successfully in the US.

“But an engrained, institutional bias in favour of building new assets to boost supply means that cost effective ‘no build’ technologies for managing demand have been ignored. This will push up electricity bills needlessly and commit consumers to paying for capacity that we would not need if we invested in building demand-flexibility, for those who want to use it.”

In the first year of the Capacity Market alone, she added, obligations of up to £2.5bn for expensive peaking power stations to be switched on will be created.

Those costs, plus year on year additional peaking power costs for the next 15 years, will be passed onto customers, potentially costing them over £35 billion – at a time when over 2,280,000 million households are living in fuel poverty.

Under regulations made under the Energy Act, the Government plans to award new generators with ‘capacity contracts’ guaranteeing a revenue stream for up to 15 years to provide energy when called upon by National Grid.

Conversely, customers who volunteer to turn down energy use during peak times, and the companies that aggregate capacity created by customers, will be awarded capacity contracts of just one year.

Notably, the generation contracts will mostly involve the consumption of fossil fuels, often in inefficient plant, and financial benefits will go to large, centralised power companies. By contrast ordinary consumers can benefit from reducing their power usage at times of peak demand.

Marcin Stoczkiewicz, head of climate and energy at ClientEarth, said: “If allowed to go ahead, the UK’s ‘capacity mechanism’ will artificially prop up the existing coal-reliant energy system by paying generators extra to produce more electricity at peak times.

“The costs will be passed on to consumers, regardless of when they use power. This is bad for the environment and for our pockets. We are supporting their action because it’s crucial to driving progress on climate change.”

One year contracts ‘not a viable proposition’

The problem with one year contracts is that technology investments are required to enable equipment to be switched off automatically at times of strong power demand, and these cannot reasonably be paid off in a single year, says Bell.

“The one year contracts offered for demand flexibility are not a viable proposition to customers who would, for a longer revenue stream, be able to invest in flexible technology that would save money and energy in the long term while making our system more secure.”

“Instead, the lack of commitment to innovation from the Government will stymie investment and therefore the advancement of a smart industry that could fundamentally transform our energy economy.”

And this is Tempus’s business model: it aggregates the power-saving potential of many households and businesses using smart technology to automatically shift non-time critical energy use into the cheapest price period. It then shares the benefits with its providers.

By bringing the challenge, Tempus Energy aims to obtain a ruling by the European Court that the state aid approval was unlawful, which will force the EU Commission to hold a formal inquiry.

The case may therefore have a destabilising impact on the first Capacity Market Auction – scheduled for 16th December – as well as challenging the validity of the subsidy scheme in its current form.

However a DECC Spokesperson insisted: “We are fully confident in this auction. The European Commission has concluded that the Capacity Market is within European State aid rules. This challenge will have no impact on the running of the capacity auction in December.”

Europe-wide repercussions

In the US, 10-12% of power is now provided by customers with demand flexibility technology. The EU legal challenge will raise a serious question for investors as to why the UK cannot emulate the successful way in which other countries, like the US, use demand-side capability to cost effectively keep the lights.

As a result of the UK Capacity Market approval, other European countries are lining Capacity Market policies that also discriminate against demand-side resources in favour of generation, said Bell:

“In countries where renewables generation already makes up a significant proportion of the grid mix, such as Germany, the legal challenge will be particularly beneficial as demand side flexibility is the only scalable means to efficiently use ‘wrong time’ renewable generation, which is otherwise wasted. This challenge will ensure other countries are forced to develop level playing fields for all resources.”

Up to 40% of the UK electricity grid is underutilised at a given time. By increasing the use of smart technology to manage energy demand spikes, it is possible to utilise much more of the grid.

That would reduce the need for spending more on infrastructure (paid for by consumers) as well as limiting the need to pay for expensive ‘peaking’ generation, and enabling better access to renewables at times when they are cheap and plentiful.

 

 


 

Oliver Tickell edits The Ecologist.

 




387756

UK’s ‘unlawful’ £35 billion support to fossil fuels in ECJ challenge Updated for 2026





An innovative energy company today launched a legal challenge to UK Government electricity market ‘reforms’ in the European Court of Justice.

According to Tempus Energy, which brought the challenge, the new system represents an “unlawful subsidy” worth as much as £2.5 billion a year to fossil fuel power generators, for a 15-year period.

As part of the Electricity Market Reform, the Capacity Market was set up to offer subsidies to reliable forms of power capacity to switch in when needed to balance demand.

This includes both the supply of new power on demand (‘supply side’); and cuts in demand for power from power users (‘demand side’). The intended result is to create a 50 GW back-up capability for when the system is tight. 

But Tempus says the way the Capacity Market has been designed violates the EU’s State Aid rules by prioritising fossil fuel electricity generation over “cheaper and more reliable” demand-side options.

Specifically, ‘supply side’ contracts will last for 15 years, but inexplicably, ‘demand side’ contracts will last for only one year – giving power generation a clear advantage over demand reduction.

An ‘engrained bias’ in favour of building new generation assets

Tempus CEO Sara Bell said: “The Capacity Market was originally set up to keep the lights on at the lowest possible cost; a format that has been used very successfully in the US.

“But an engrained, institutional bias in favour of building new assets to boost supply means that cost effective ‘no build’ technologies for managing demand have been ignored. This will push up electricity bills needlessly and commit consumers to paying for capacity that we would not need if we invested in building demand-flexibility, for those who want to use it.”

In the first year of the Capacity Market alone, she added, obligations of up to £2.5bn for expensive peaking power stations to be switched on will be created.

Those costs, plus year on year additional peaking power costs for the next 15 years, will be passed onto customers, potentially costing them over £35 billion – at a time when over 2,280,000 million households are living in fuel poverty.

Under regulations made under the Energy Act, the Government plans to award new generators with ‘capacity contracts’ guaranteeing a revenue stream for up to 15 years to provide energy when called upon by National Grid.

Conversely, customers who volunteer to turn down energy use during peak times, and the companies that aggregate capacity created by customers, will be awarded capacity contracts of just one year.

Notably, the generation contracts will mostly involve the consumption of fossil fuels, often in inefficient plant, and financial benefits will go to large, centralised power companies. By contrast ordinary consumers can benefit from reducing their power usage at times of peak demand.

Marcin Stoczkiewicz, head of climate and energy at ClientEarth, said: “If allowed to go ahead, the UK’s ‘capacity mechanism’ will artificially prop up the existing coal-reliant energy system by paying generators extra to produce more electricity at peak times.

“The costs will be passed on to consumers, regardless of when they use power. This is bad for the environment and for our pockets. We are supporting their action because it’s crucial to driving progress on climate change.”

One year contracts ‘not a viable proposition’

The problem with one year contracts is that technology investments are required to enable equipment to be switched off automatically at times of strong power demand, and these cannot reasonably be paid off in a single year, says Bell.

“The one year contracts offered for demand flexibility are not a viable proposition to customers who would, for a longer revenue stream, be able to invest in flexible technology that would save money and energy in the long term while making our system more secure.”

“Instead, the lack of commitment to innovation from the Government will stymie investment and therefore the advancement of a smart industry that could fundamentally transform our energy economy.”

And this is Tempus’s business model: it aggregates the power-saving potential of many households and businesses using smart technology to automatically shift non-time critical energy use into the cheapest price period. It then shares the benefits with its providers.

By bringing the challenge, Tempus Energy aims to obtain a ruling by the European Court that the state aid approval was unlawful, which will force the EU Commission to hold a formal inquiry.

The case may therefore have a destabilising impact on the first Capacity Market Auction – scheduled for 16th December – as well as challenging the validity of the subsidy scheme in its current form.

However a DECC Spokesperson insisted: “We are fully confident in this auction. The European Commission has concluded that the Capacity Market is within European State aid rules. This challenge will have no impact on the running of the capacity auction in December.”

Europe-wide repercussions

In the US, 10-12% of power is now provided by customers with demand flexibility technology. The EU legal challenge will raise a serious question for investors as to why the UK cannot emulate the successful way in which other countries, like the US, use demand-side capability to cost effectively keep the lights.

As a result of the UK Capacity Market approval, other European countries are lining Capacity Market policies that also discriminate against demand-side resources in favour of generation, said Bell:

“In countries where renewables generation already makes up a significant proportion of the grid mix, such as Germany, the legal challenge will be particularly beneficial as demand side flexibility is the only scalable means to efficiently use ‘wrong time’ renewable generation, which is otherwise wasted. This challenge will ensure other countries are forced to develop level playing fields for all resources.”

Up to 40% of the UK electricity grid is underutilised at a given time. By increasing the use of smart technology to manage energy demand spikes, it is possible to utilise much more of the grid.

That would reduce the need for spending more on infrastructure (paid for by consumers) as well as limiting the need to pay for expensive ‘peaking’ generation, and enabling better access to renewables at times when they are cheap and plentiful.

 

 


 

Oliver Tickell edits The Ecologist.

 




387756

UK’s ‘unlawful’ £35 billion support to fossil fuels in ECJ challenge Updated for 2026





An innovative energy company today launched a legal challenge to UK Government electricity market ‘reforms’ in the European Court of Justice.

According to Tempus Energy, which brought the challenge, the new system represents an “unlawful subsidy” worth as much as £2.5 billion a year to fossil fuel power generators, for a 15-year period.

As part of the Electricity Market Reform, the Capacity Market was set up to offer subsidies to reliable forms of power capacity to switch in when needed to balance demand.

This includes both the supply of new power on demand (‘supply side’); and cuts in demand for power from power users (‘demand side’). The intended result is to create a 50 GW back-up capability for when the system is tight. 

But Tempus says the way the Capacity Market has been designed violates the EU’s State Aid rules by prioritising fossil fuel electricity generation over “cheaper and more reliable” demand-side options.

Specifically, ‘supply side’ contracts will last for 15 years, but inexplicably, ‘demand side’ contracts will last for only one year – giving power generation a clear advantage over demand reduction.

An ‘engrained bias’ in favour of building new generation assets

Tempus CEO Sara Bell said: “The Capacity Market was originally set up to keep the lights on at the lowest possible cost; a format that has been used very successfully in the US.

“But an engrained, institutional bias in favour of building new assets to boost supply means that cost effective ‘no build’ technologies for managing demand have been ignored. This will push up electricity bills needlessly and commit consumers to paying for capacity that we would not need if we invested in building demand-flexibility, for those who want to use it.”

In the first year of the Capacity Market alone, she added, obligations of up to £2.5bn for expensive peaking power stations to be switched on will be created.

Those costs, plus year on year additional peaking power costs for the next 15 years, will be passed onto customers, potentially costing them over £35 billion – at a time when over 2,280,000 million households are living in fuel poverty.

Under regulations made under the Energy Act, the Government plans to award new generators with ‘capacity contracts’ guaranteeing a revenue stream for up to 15 years to provide energy when called upon by National Grid.

Conversely, customers who volunteer to turn down energy use during peak times, and the companies that aggregate capacity created by customers, will be awarded capacity contracts of just one year.

Notably, the generation contracts will mostly involve the consumption of fossil fuels, often in inefficient plant, and financial benefits will go to large, centralised power companies. By contrast ordinary consumers can benefit from reducing their power usage at times of peak demand.

Marcin Stoczkiewicz, head of climate and energy at ClientEarth, said: “If allowed to go ahead, the UK’s ‘capacity mechanism’ will artificially prop up the existing coal-reliant energy system by paying generators extra to produce more electricity at peak times.

“The costs will be passed on to consumers, regardless of when they use power. This is bad for the environment and for our pockets. We are supporting their action because it’s crucial to driving progress on climate change.”

One year contracts ‘not a viable proposition’

The problem with one year contracts is that technology investments are required to enable equipment to be switched off automatically at times of strong power demand, and these cannot reasonably be paid off in a single year, says Bell.

“The one year contracts offered for demand flexibility are not a viable proposition to customers who would, for a longer revenue stream, be able to invest in flexible technology that would save money and energy in the long term while making our system more secure.”

“Instead, the lack of commitment to innovation from the Government will stymie investment and therefore the advancement of a smart industry that could fundamentally transform our energy economy.”

And this is Tempus’s business model: it aggregates the power-saving potential of many households and businesses using smart technology to automatically shift non-time critical energy use into the cheapest price period. It then shares the benefits with its providers.

By bringing the challenge, Tempus Energy aims to obtain a ruling by the European Court that the state aid approval was unlawful, which will force the EU Commission to hold a formal inquiry.

The case may therefore have a destabilising impact on the first Capacity Market Auction – scheduled for 16th December – as well as challenging the validity of the subsidy scheme in its current form.

However a DECC Spokesperson insisted: “We are fully confident in this auction. The European Commission has concluded that the Capacity Market is within European State aid rules. This challenge will have no impact on the running of the capacity auction in December.”

Europe-wide repercussions

In the US, 10-12% of power is now provided by customers with demand flexibility technology. The EU legal challenge will raise a serious question for investors as to why the UK cannot emulate the successful way in which other countries, like the US, use demand-side capability to cost effectively keep the lights.

As a result of the UK Capacity Market approval, other European countries are lining Capacity Market policies that also discriminate against demand-side resources in favour of generation, said Bell:

“In countries where renewables generation already makes up a significant proportion of the grid mix, such as Germany, the legal challenge will be particularly beneficial as demand side flexibility is the only scalable means to efficiently use ‘wrong time’ renewable generation, which is otherwise wasted. This challenge will ensure other countries are forced to develop level playing fields for all resources.”

Up to 40% of the UK electricity grid is underutilised at a given time. By increasing the use of smart technology to manage energy demand spikes, it is possible to utilise much more of the grid.

That would reduce the need for spending more on infrastructure (paid for by consumers) as well as limiting the need to pay for expensive ‘peaking’ generation, and enabling better access to renewables at times when they are cheap and plentiful.

 

 


 

Oliver Tickell edits The Ecologist.

 




387756

UK’s ‘unlawful’ £35 billion support to fossil fuels in ECJ challenge Updated for 2026





An innovative energy company today launched a legal challenge to UK Government electricity market ‘reforms’ in the European Court of Justice.

According to Tempus Energy, which brought the challenge, the new system represents an “unlawful subsidy” worth as much as £2.5 billion a year to fossil fuel power generators, for a 15-year period.

As part of the Electricity Market Reform, the Capacity Market was set up to offer subsidies to reliable forms of power capacity to switch in when needed to balance demand.

This includes both the supply of new power on demand (‘supply side’); and cuts in demand for power from power users (‘demand side’). The intended result is to create a 50 GW back-up capability for when the system is tight. 

But Tempus says the way the Capacity Market has been designed violates the EU’s State Aid rules by prioritising fossil fuel electricity generation over “cheaper and more reliable” demand-side options.

Specifically, ‘supply side’ contracts will last for 15 years, but inexplicably, ‘demand side’ contracts will last for only one year – giving power generation a clear advantage over demand reduction.

An ‘engrained bias’ in favour of building new generation assets

Tempus CEO Sara Bell said: “The Capacity Market was originally set up to keep the lights on at the lowest possible cost; a format that has been used very successfully in the US.

“But an engrained, institutional bias in favour of building new assets to boost supply means that cost effective ‘no build’ technologies for managing demand have been ignored. This will push up electricity bills needlessly and commit consumers to paying for capacity that we would not need if we invested in building demand-flexibility, for those who want to use it.”

In the first year of the Capacity Market alone, she added, obligations of up to £2.5bn for expensive peaking power stations to be switched on will be created.

Those costs, plus year on year additional peaking power costs for the next 15 years, will be passed onto customers, potentially costing them over £35 billion – at a time when over 2,280,000 million households are living in fuel poverty.

Under regulations made under the Energy Act, the Government plans to award new generators with ‘capacity contracts’ guaranteeing a revenue stream for up to 15 years to provide energy when called upon by National Grid.

Conversely, customers who volunteer to turn down energy use during peak times, and the companies that aggregate capacity created by customers, will be awarded capacity contracts of just one year.

Notably, the generation contracts will mostly involve the consumption of fossil fuels, often in inefficient plant, and financial benefits will go to large, centralised power companies. By contrast ordinary consumers can benefit from reducing their power usage at times of peak demand.

Marcin Stoczkiewicz, head of climate and energy at ClientEarth, said: “If allowed to go ahead, the UK’s ‘capacity mechanism’ will artificially prop up the existing coal-reliant energy system by paying generators extra to produce more electricity at peak times.

“The costs will be passed on to consumers, regardless of when they use power. This is bad for the environment and for our pockets. We are supporting their action because it’s crucial to driving progress on climate change.”

One year contracts ‘not a viable proposition’

The problem with one year contracts is that technology investments are required to enable equipment to be switched off automatically at times of strong power demand, and these cannot reasonably be paid off in a single year, says Bell.

“The one year contracts offered for demand flexibility are not a viable proposition to customers who would, for a longer revenue stream, be able to invest in flexible technology that would save money and energy in the long term while making our system more secure.”

“Instead, the lack of commitment to innovation from the Government will stymie investment and therefore the advancement of a smart industry that could fundamentally transform our energy economy.”

And this is Tempus’s business model: it aggregates the power-saving potential of many households and businesses using smart technology to automatically shift non-time critical energy use into the cheapest price period. It then shares the benefits with its providers.

By bringing the challenge, Tempus Energy aims to obtain a ruling by the European Court that the state aid approval was unlawful, which will force the EU Commission to hold a formal inquiry.

The case may therefore have a destabilising impact on the first Capacity Market Auction – scheduled for 16th December – as well as challenging the validity of the subsidy scheme in its current form.

However a DECC Spokesperson insisted: “We are fully confident in this auction. The European Commission has concluded that the Capacity Market is within European State aid rules. This challenge will have no impact on the running of the capacity auction in December.”

Europe-wide repercussions

In the US, 10-12% of power is now provided by customers with demand flexibility technology. The EU legal challenge will raise a serious question for investors as to why the UK cannot emulate the successful way in which other countries, like the US, use demand-side capability to cost effectively keep the lights.

As a result of the UK Capacity Market approval, other European countries are lining Capacity Market policies that also discriminate against demand-side resources in favour of generation, said Bell:

“In countries where renewables generation already makes up a significant proportion of the grid mix, such as Germany, the legal challenge will be particularly beneficial as demand side flexibility is the only scalable means to efficiently use ‘wrong time’ renewable generation, which is otherwise wasted. This challenge will ensure other countries are forced to develop level playing fields for all resources.”

Up to 40% of the UK electricity grid is underutilised at a given time. By increasing the use of smart technology to manage energy demand spikes, it is possible to utilise much more of the grid.

That would reduce the need for spending more on infrastructure (paid for by consumers) as well as limiting the need to pay for expensive ‘peaking’ generation, and enabling better access to renewables at times when they are cheap and plentiful.

 

 


 

Oliver Tickell edits The Ecologist.

 




387756

UK’s ‘unlawful’ £35 billion support to fossil fuels in ECJ challenge Updated for 2026





An innovative energy company today launched a legal challenge to UK Government electricity market ‘reforms’ in the European Court of Justice.

According to Tempus Energy, which brought the challenge, the new system represents an “unlawful subsidy” worth as much as £2.5 billion a year to fossil fuel power generators, for a 15-year period.

As part of the Electricity Market Reform, the Capacity Market was set up to offer subsidies to reliable forms of power capacity to switch in when needed to balance demand.

This includes both the supply of new power on demand (‘supply side’); and cuts in demand for power from power users (‘demand side’). The intended result is to create a 50 GW back-up capability for when the system is tight. 

But Tempus says the way the Capacity Market has been designed violates the EU’s State Aid rules by prioritising fossil fuel electricity generation over “cheaper and more reliable” demand-side options.

Specifically, ‘supply side’ contracts will last for 15 years, but inexplicably, ‘demand side’ contracts will last for only one year – giving power generation a clear advantage over demand reduction.

An ‘engrained bias’ in favour of building new generation assets

Tempus CEO Sara Bell said: “The Capacity Market was originally set up to keep the lights on at the lowest possible cost; a format that has been used very successfully in the US.

“But an engrained, institutional bias in favour of building new assets to boost supply means that cost effective ‘no build’ technologies for managing demand have been ignored. This will push up electricity bills needlessly and commit consumers to paying for capacity that we would not need if we invested in building demand-flexibility, for those who want to use it.”

In the first year of the Capacity Market alone, she added, obligations of up to £2.5bn for expensive peaking power stations to be switched on will be created.

Those costs, plus year on year additional peaking power costs for the next 15 years, will be passed onto customers, potentially costing them over £35 billion – at a time when over 2,280,000 million households are living in fuel poverty.

Under regulations made under the Energy Act, the Government plans to award new generators with ‘capacity contracts’ guaranteeing a revenue stream for up to 15 years to provide energy when called upon by National Grid.

Conversely, customers who volunteer to turn down energy use during peak times, and the companies that aggregate capacity created by customers, will be awarded capacity contracts of just one year.

Notably, the generation contracts will mostly involve the consumption of fossil fuels, often in inefficient plant, and financial benefits will go to large, centralised power companies. By contrast ordinary consumers can benefit from reducing their power usage at times of peak demand.

Marcin Stoczkiewicz, head of climate and energy at ClientEarth, said: “If allowed to go ahead, the UK’s ‘capacity mechanism’ will artificially prop up the existing coal-reliant energy system by paying generators extra to produce more electricity at peak times.

“The costs will be passed on to consumers, regardless of when they use power. This is bad for the environment and for our pockets. We are supporting their action because it’s crucial to driving progress on climate change.”

One year contracts ‘not a viable proposition’

The problem with one year contracts is that technology investments are required to enable equipment to be switched off automatically at times of strong power demand, and these cannot reasonably be paid off in a single year, says Bell.

“The one year contracts offered for demand flexibility are not a viable proposition to customers who would, for a longer revenue stream, be able to invest in flexible technology that would save money and energy in the long term while making our system more secure.”

“Instead, the lack of commitment to innovation from the Government will stymie investment and therefore the advancement of a smart industry that could fundamentally transform our energy economy.”

And this is Tempus’s business model: it aggregates the power-saving potential of many households and businesses using smart technology to automatically shift non-time critical energy use into the cheapest price period. It then shares the benefits with its providers.

By bringing the challenge, Tempus Energy aims to obtain a ruling by the European Court that the state aid approval was unlawful, which will force the EU Commission to hold a formal inquiry.

The case may therefore have a destabilising impact on the first Capacity Market Auction – scheduled for 16th December – as well as challenging the validity of the subsidy scheme in its current form.

However a DECC Spokesperson insisted: “We are fully confident in this auction. The European Commission has concluded that the Capacity Market is within European State aid rules. This challenge will have no impact on the running of the capacity auction in December.”

Europe-wide repercussions

In the US, 10-12% of power is now provided by customers with demand flexibility technology. The EU legal challenge will raise a serious question for investors as to why the UK cannot emulate the successful way in which other countries, like the US, use demand-side capability to cost effectively keep the lights.

As a result of the UK Capacity Market approval, other European countries are lining Capacity Market policies that also discriminate against demand-side resources in favour of generation, said Bell:

“In countries where renewables generation already makes up a significant proportion of the grid mix, such as Germany, the legal challenge will be particularly beneficial as demand side flexibility is the only scalable means to efficiently use ‘wrong time’ renewable generation, which is otherwise wasted. This challenge will ensure other countries are forced to develop level playing fields for all resources.”

Up to 40% of the UK electricity grid is underutilised at a given time. By increasing the use of smart technology to manage energy demand spikes, it is possible to utilise much more of the grid.

That would reduce the need for spending more on infrastructure (paid for by consumers) as well as limiting the need to pay for expensive ‘peaking’ generation, and enabling better access to renewables at times when they are cheap and plentiful.

 

 


 

Oliver Tickell edits The Ecologist.

 




387756