Ten things you should watch out for in renewables this year:
1. The first subsidy free wind farm to start construction in Scotland and the emergence of a market driven windpower sector.
2. An energy white paper. BEIS is due to publish a white paper in early 2019, responding to Dieter Helm's report in October 2017. If we recall correctly, BEIS gave him 60 days to prepare his report - 400+ days and counting for BEIS' response.
3. The launch of the first Offshore Wind Leasing Round by Crown Estate Scotland in April 2019. Hopefully Scottish control over the leasing of offshore wind sites will help position Scottish projects for participation in CfD auctions from 2023 onwards.
4. A decision to hold a Pot 1 CfD auction. The prospect of an onshore wind and solar CfD waxed and waned in 2018. The Brexit endgame will limit the bargaining power of swing voting MPs, opening the way to a decision (possibly). If it happens, auction pricing will change CfDs from subsidy to power price hedge.
5. March 2019 will see the demise of Feed-in Tariffs. BEIS proposes to introduce a "smart export guarantee" as its preferred replacement for FITs. BEIS proposes that large suppliers will be mandated to offer a "smart" guarantee to small (<5MW) low carbon generators to buy their power...at whatever price the supplier chooses to offer. We are reminded of the emperor's new clothes.
6. The harmonisation of distribution and transmission charges begins - connection, use of system and balancing charges, will all be affected. While distribution connection charges could reduce, the impact of the changes are likely to result in a windfall to investors in transmission connected plant and losses to investors in distribution connected plant. The process will take years but the first impacts will be felt in 2019.
7. The abolition of the CRC (Carbon Reduction Commitments) scheme in October 2019.
8. A new carbon emissions tax? It's included in the Finance Bill 2019, to come into effect if there is a no deal Brexit. Look out for the parliamentary vote on the Finance Bill in the second week of January.
9. Re-birth of the capacity market? Will it obtain state aid approval in its current form? The EU Commission Decision approving the scheme was held invalid due to the Commission's failure to hold a formal investigation into the market before approving the aid - Tempus demonstrating the power of law.
10. A heat network strategy for Scotland? The Scottish Government's second consultation on a local heat and energy efficiency strategy closed in February last year, while the UK Government's first consultation on heat networks was published in December 2018. Will 2019 see the Scottish Government at last publish a heat network policy to underpin widespread investment in the sector?
Finally, it looks as if we will see an increase in global carbon emissions in 2019. After a period in which emissions were falling, they started rising again in 2017 with a 1.4% increase (IEA). In 2018, the Global Carbon Project estimates that emissions increased by 2.7% and the Rhodium Group estimates US emissions in 2018 rose by 3.4%. The Paris pathway and reality are diverging.
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