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Conventional generation

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Hunt unveils generation levy exemption and grid planning overhaul
Jeremy Hunt has announced that new electricity generation will be exempted from the government’s windfall levy on the sector, while unveiling a wide-ranging package of energy infrastructure planning changes in his Autumn Statement. The statement, widely reckoned to be the last before the next general election, contains a series of announcements on reforming the planning system and speeding up electricity grid connection timetables.
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Experts split on size of long duration storage target
Experts on long duration energy storage (LDES) are split on the necessary target needed to deliver the UK's decarbonisation goal. While some experts have urged the government to set a long-term target of up to 100TWh, others have suggested that a smaller “no regrets” target should be set to “get the ball rolling” on LDES. However, government officials have refused to be pushed on the possible size of a target.
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Government must not slip back into complacency on CfDs
The government must not slip back into the complacency that ultimately led to the failure of the latest Contracts for Difference (CfDs) auctions to attract any bids from offshore wind projects, an industry expert has warned. Earlier this week, the government announced hikes to the strike price caps for next year’s auctions but Adam Bell, director of policy at Stonehaven, said further changes are needed to prevent a repeat of the problems that emerged during allocation round five (AR5).
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Latest in Conventional generation

Another record high price expected in T-4 capacity auction
The next four-year-ahead (T-4) Capacity Market auction is expected to clear at a record high price for the third year running after the margin between prequalifying capacity and the procurement target fell to its lowest level since the auctions began in 2014. Although the target has been raised slightly to 43GW, according to analysis by EnAppSys, 45.2GW of de-rated capacity has prequalified for the auction in February next year, leaving a margin of less than 2.2GW – or 5%.
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‘Triage’ process to prioritise strategic connections
The government will manage a “triage” process for prioritising the connection of strategically important energy projects as part of its joint action plan with Ofgem for speeding up grid connections. Working with the regulator, the Department for Energy Security and Net Zero (DESNZ) will establish a Connections Delivery Board to oversee the implementation of the six-point plan, which aims to cut the average wait for a connection from 5 years to 6 months.  
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SSE raises transmission investment forecast by £2.5bn
SSE has increased its investment forecast by £2.5 billion to reflect recent regulatory decisions on upgrades to the transmission network. The company said it now expects to make £20.5 billion of net zero related investments over the five-year period ending in 2026/27.
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Generator faces £24m penalty for licence breach
Ofgem has ordered the owner of the South Humber Bank gas power station to pay £23.63 million in redress for gaining an “excessive benefit” from a transmission constraint. It would be the third such action the regulator has taken this year after ordering Drax and SSE to pay £6.12 million and £9.78 million respectively for similar licence breaches.
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UK threatens to leave Energy Charter Treaty
The government has confirmed it is reviewing the UK’s membership of the Energy Charter Treaty after modernisation efforts reached an impasse. In its current form, energy minister Graham Stuart said the “outdated” treaty does not support signatories seeking to decarbonise their energy systems and “could even penalise our country for being at the forefront of those efforts.”
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Ofgem launches crackdown on excess balancing profits
Ofgem has given the final go-ahead to a new licence condition to prevent generators from obtaining excessive profits by signaling their intention to stop producing power during periods of scarcity and then charging extortionate prices to continue generating.  The regulator originally proposed the new licence condition in November last year after balancing costs “rose alarmingly” to £1.5 billion over the winter of 2021.
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‘Sheer bloody mindedness’ to completely exorcise gas generation
Completely exorcising gas generation from the energy system as part of the drive for net zero emissions would be an act of “sheer bloody mindedness,” an industry analyst has argued. Tom Smout, a senior associate at Aurora Energy Research, said fulfilling Britain’s entire requirement for firm backup capacity using zero-carbon technologies would be unnecessarily expensive given the very limited numbers of hours some of it would need to run.
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New Balancing Reserve service to be fully open to smaller units
The Electricity System Operator (ESO) has reversed a decision that would have effectively ensured that a substantial portion of contracts for its proposed new Balancing Reserve service would be awarded to large gas plants. The body said its new position will fully open the market a wider pool of providers, including smaller and aggregated units.
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Net zero tsar says Sunak on ‘wrong side of history’
The prime minister’s support for new North Sea oil and gas drilling licences has been criticised by the government’s own net zero adviser, who has called for an emergency Parliamentary debate on the issue. Rishi Sunak used a trip to Scotland to confirm 100 licences will be issued in September to extract oil and gas from the North Sea, with the government open to further licensing rounds in the future.
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Centrica signs £6.2bn LNG deal with US firm
Centrica has signed a 15-year deal with Delfin Midstream for the purchase of Liquefied Natural Gas (LNG). Worth £6.2 billion, the agreement will see Centrica take delivery of around 14 LNG cargoes per year, which equates to about 1 million tonnes of LNG.
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Drax and ESO fail to strike deal on coal units returning
The Electricity System Operator has confirmed that talks with Drax have now concluded with no agreement reached to keep its coal units open this winter. Drax will now continue with the decommissioning process of its North Yorkshire plant which it began after coal generation ceased in April.
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ESO ‘still in talks’ with Drax about coal units returning for winter
The Electricity System Operator (ESO) has claimed it is “still in talks” with Drax about making its last two coal units available over the coming winter, despite the latter previously ruling this out as a possibility. However, Drax has denied being in negotiations with the ESO, saying it has already begun decommissioning the units. Utility Week understands significant work would now be required to bring the units back online and they would not be able to provide as much capacity as before.
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