Opportunities in UK Power Sector

Hello Friends,

Wishing you all Merry Christmas, a Happy & Safe 2016 and Happy Holidays.

It’s been quite a while that I have written for my blog. The last few months have been busy with a lot of changes happening. Earlier I made a shift back into the financial sector with Axience Consulting where I worked on an equity/debt information memorandum report for a 50MW solar project in India.

Post that, I have shifted base to London. The settling down process has taken couple of months.

In between I have managed to meet people from UK’s cleantech sector.  One being a company that is looking to bring “waste to diesel” and “water treatment” technology in India. The second being a company that has recently helped an Indian cleantech company raise funds in UK and keen to partner with high potential startups/SMEs from India.

Recently I attended an Investor Briefing “Investing in Energy and Water Infrastructure” in London; conducted by Forbury Investment Network and Rush Events and hosted by Ingenious.

The Investor Briefing  focus was the infrastructure in UK’s energy and water sector. One key area of clean technology that continues to develop without being derailed by changes to subsidy levels or major policy is infrastructure.  For both water and energy, the drive for efficiency improvements, the changes to the sources of power generation and the demand for extending the existing network to service new housing all mean that the existing network for water and energy (electricity and gas) are being expanded, upgraded, technologically enhanced, made more smart and adapted to meet the new requirements.

Infrastructure is an attractive area for investment due to its fundamental need and reliability resulting in secure income flows, sizeable projects  and known risk profiles making it attractive for project finance and its positive social, environmental and economic profile.

The UK power sector which was mostly consisted of large power stations, transmission systems and distribution systems has been witnessing changes.  There are increasing number of smaller power stations and more renewable energy power generation [The share of renewable energy in electricity generation by fuel in UK  has increased from 11.3% in 2012 to 25.3% in 2014]. The system now does not resemble “waterfall” with electricity flowing from the large power stations in one direction towards customers. Instead the electricity flows are more unpredictable.

The industry is witnessing new trends with new ways of addressing the need for network capacity :

1. Storage
2. Demand Side Response and innovative tariffs
3. Use of local generation

The National Grid’s System Operability Framework 2015 is looking into

1. Development of new system services
2. Increased co-ordination between transmission and distribution networks
3. Increased flexibility from generating plant

The new way of life has given rise to challenges/opportunities for investment:

1. New emerging business models such as Storage providers , Demand management as part of energy service contract  and Third party aggregators
2. Innovation projects developing into business as usual solutions. Some of these can be Active Network Management, Power electronics for distribution and Superconducting cables