Energy Eye - November 2013

This update contains brief details of Government and EU publications, legislation, cases and other policy developments in England and Wales relevant to those interested in energy, renewables, energy efficiency and the alternative energy sector, which have been published in the past month.

13/11/2013

Nadeem Arshad

Nadeem Arshad

Partner

This update contains brief details of Government and EU publications, legislation, cases and other policy developments in England and Wales relevant to those interested in energy, renewables, energy efficiency and the alternative energy sector, which have been published in the past month.

Items are set out by subject, with a link to where the full document can be found on the internet. All links are correct at the date of publication.

If you have been forwarded this update by a colleague and would like to receive it direct please email Claire Booth.

The following topics are covered in this update:

   Carbon Capture and Storage    Infrastructure
   Carbon Reduction    Permitting and Licensing
   Climate Change Levy    Renewable Energy
   Competition    Shale Gas
   Energy Efficiency    Smart Metering
   Energy Policy    Wave & Tidal Energy
   Heat Networks    Wind Energy

 

Carbon Capture and Storage

Global CCS Institute: The global status of CCS 2013: this report looks at progress and challenges facing carbon capture and storage (CCS). It provides a comprehensive overview of the state of development of CCS projects and technologies, and of actions taken to facilitate the demonstration of those technologies at a large scale. (10 October 2013)

Carbon Capture Readiness (Electricity Generating Stations) Regulations 2013 (SI 2013/2696): these regulations, which come into force on 25 November 2013, implement Article 36 of the Industrial Emissions (IPPC) Directive 2010/75 which aims to ensure potential for future carbon capture and storage (CCS) is assessed when developers apply for consent to construct combustion generating stations over 300 MWe, of a type covered by the Directive. A number of assessments need to be carried out relating to the technical and economic feasibility of capturing, transporting and storing potential CO2 emissions from an applicable plant. These assessments are designed to determine whether it is reasonable to expect that the proposed power station could be fitted with CCS technology in the future. If an assessment demonstrates that fitting of CCS technology is feasible then Article 36 requires space to be set aside to accommodate retrofitting of such equipment, thus making the proposed plant “carbon capture ready”. (22 October 2013)

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Carbon Reduction

DECC: Going for Green Growth – The case for ambitious and immediate EU low carbon action: the Green Growth Group is an informal grouping of like-minded energy, climate and environment Ministers from 13 EU Member States that are working together to explore, promote and pursue a cost-effective and growth-enhancing EU low carbon agenda. As part of their work, the Group has published this joint pamphlet which sets out the case for why the EU needs to take ambitious and immediate low carbon action. It concludes with a call for three priority EU actions: 

  • Agree an ambitious EU 2030 Energy and Climate Policy Framework; 
  • Reform the structure of the EU’s Emissions Trading System; 
  • Ensure the EU is in a position to put an ambitious emissions reduction offer on the table at the Ban Ki-Moon-hosted World Leaders’ Climate Summit in autumn 2014.

It has been launched at the European Green Growth Summit in Brussels, which is the first in a series of collaborative efforts at EU level between senior politicians, business leaders, investors and experts to explore, promote and pursue an ambitious, growth-enhancing and cost-effective EU decarbonisation strategy. (28 October 2013)

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Climate Change Levy

HMRC: Registering for Climate Change Levy (CCL1/1): this revised notice provides advice and guidance on registering for the main rates of CCL, including taxable supplies, excluded and exempt supplies, who should register, group registration, divisional registration, directed utility status and tax representatives.
There is also a revised Notice CCL1/1 General Guide to Climate Change Levy and revised Notice CCL1/3: CCL - reliefs and special treatments for taxable commodities. (18 October 2013)

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Competition

DECC: Helping customers switch – Collective switching and beyond: sets out key findings from the Cheaper Energy Together grant funding scheme that aimed to increase public awareness of the potential for reducing energy bills through collective switching and to develop an understanding of which approaches are the most effective at engaging with consumers, particularly vulnerable consumers. The scheme awarded funding to 31 projects, which together covered 94 local councils and eight third sector organisations in Great Britain. The report also notes developments designed to help customers access the best energy deal. (30 October 2013)

European Commission: Delivering the internal electricity market and making the most of public intervention: renewable energy was for a long time a new technology that needed state intervention to develop. With technological progress, investment costs in solar panel falling and production expanding, many Member States have started a reform of their support schemes for renewables. This Communication gives guidance on how best to reform existing national support schemes for renewable energy. At the same time, it looks at back-up capacities for renewable energy: when the sun is not shining and the wind is not blowing, electricity must still be produced in sufficient quantities to deliver energy to consumers and keep the electricity grid stable. With the increase of renewable energy production, this becomes a challenge. It is for this reason that in several Member States, discussions take place on how to organise and finance back-up-capacities, for example coal and gas power plants which are flexible enough to be turned on and off whenever needed. The Communication gives guidance on how these back-up capacities can be designed in a cost-efficient way and takes full advantage of the European market.
The guidance is not legally binding; however, it does set out the main principles which the Commission will apply when assessing state interventions relating to renewable support schemes, capacity mechanisms or measures to ensure consumer demand response. It is therefore relevant to the future enforcement of EU state aid rules or EU energy legislation. The Commission will also consider whether to propose legal instruments to ensure that these principles are fully implemented.  (6 November 2013)

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Energy Efficiency

DECC: Helping consumers with energy: simple guide to accessing help and information on lower energy bills and warmer homes. (31 October 2013)

DECC: Repealing legislation prescribing the maximum temperature to which particular premises may be heated: seeks views on proposals to remove two heating control orders which specify the maximum temperatures to which certain premises may be heated,  in order to inform the Government’s decision on whether to remove the legislation. The Fuel and Electricity (Heating) (Control) Order 1974 prohibits the heating of certain premises above a temperature of 68°F, equivalent to 20°C. The Fuel and Electricity (Heating) (Control) (Amendment) Order 1980 amended the 1974 Order and substituted this limit with 66.2°F, or 19°C. These Orders were introduced at a time of severe disruption to the UK’s energy supplies. The Government considers that these conditions have generally dissipated and energy policy is now addressed by means which do not depend upon limiting the heating of premises in the way set out in the Orders. The consultation closes on 20 December 2013. (28 October 213)

Environment Agency: CRC Energy Efficiency scheme – Charging scheme and guidance:  provides guidance on the UK's CRC Energy Efficiency Scheme charging scheme. It details the methods of payment for each of the four UK administrators and when payments are due. The document also includes the legal charging scheme. (4 November 2013)

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Energy Policy

DECC: Annual energy statement 2013: the Government made a commitment in the Coalition Programme to present an annual statement of energy policy to Parliament. The2013 Statement sets out the Government’s priorities in delivering the UK’s energy policies in the near term:

  • Helping households and businesses take control of their energy bills and keep their costs down;
  • Unlocking investment in the UK’s infrastructure that will support economic growth;
  • Playing a leading role in efforts to secure international action to reduce greenhouse gas emissions and tackle climate change.

It sets out a number of new measures to make switching simpler and quicker, and a new probe into energy firms’ accounts, to make them more transparent on profits and prices, as well as increasing penalties for market manipulation and regularly checking that the market is working properly. These are summarised in the press release. (31 October 2013)

DECC: Statutory security of supply report 2013: the Government and Ofgem are required by s.172 of the Energy Act 2004 (as amended) to report annually to Parliament on the availability of electricity and gas for meeting the reasonable demands of consumers in Great Britain. This report sets out the steps the Government is taking to increase energy security by attracting investment in new, clean generation and to make sure Britain’s electricity supplies remain secure in the short term. It states that in the offshore oil and gas sector, capital investment is expected to hit a record high of £13bn, with 167 new licences granted. Overall, at least £35bn has been invested in increased electricity infrastructure since the start of 2010.(31 October 2013)

Which?: Cut down our energy bills George Osborne: the consumer body is calling on the Chancellor to stand up for consumers when he delivers his Autumn Statement, by cutting both the Big Six energy companies and the cost of government energy policies down to size. (29 October 2013)

DECC: Balance of Competence Energy Review: DECC has issued a Call for Evidence on the scope of the EU’s competence in energy, how it is used and its effect on the UK. This is part of the Government's Balance of Competence Review that will provide an analysis of what the UK’s membership of the EU means for the UK national interest.  DECC is leading on the area of the Review covering energy and its review will include consideration of the internal energy market and its contribution to the single market and growth; security of energy supply, import dependency, indigenous energy resources and energy infrastructure development; energy efficiency; renewable energy; carbon capture and storage; the EU external energy dimension (role of EU in international organisations and agreements with third countries); and nuclear and Euratom. The closing date for submissions is 15 January 2014. (24 October 2013)

Green Alliance: What has EU climate and energy policy done for the UK? A review with 20 climate and energy specialists: this paper summarises interviews with 20 climate and energy specialists. It finds a striking consensus that the EU had played a positive role overall in the UK’s energy outcomes, even amongst those who had criticisms of individual policies. There was widespread concern that the UK would struggle to maintain a coherent energy and climate programme if it were to leave the EU. It concludes that, overall, EU climate policy has been a powerful, positive force in helping the UK to meet its energy investment and climate change goals. (23 October 2013)

DECC: Opening up the energy markets – Speech to Energy UK: text of the Energy Secretary's speech to the Energy UK conference. He discusses: energy security and the Energy Bill; competition and energy prices; transparency; retail market reform  tariffs ands switching; and wholesale market reform. (12 November 2013)

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Heat Networks

DECC: Heat networks funding stream application and guidance pack: the Heat Networks Funding Stream is a £6m grant funding programme to support local authorities to identify, evaluate and develop new heating and cooling networks and expand existing heating and cooling networks in England and Wales. This pack explains the background of developing a heat network policy to develop new ways for local authorities to heat homes, buildings and assets with less reliance on traditional carbon fossil fuel powered energy supplies. The paper lists the criteria that local authorities must meet in order to be successful with their bids, and details the incentives and benefits and what specialist technical, engineering and commercial assistance is available to them before, during and after completion of their heat networks. The funding available to local authorities will cover 67% of the projected costs of planning and constructing a Heat Network; local authorities are required to match fund the remaining 33%. There will be three rounds of bidding between September 2013 and March 2015; the closing date for bids in the first round is 15 November 2013. (4 November 2013)

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Infrastructure

DECC: Initial agreement reached on new nuclear power station at Hinkley: announces that the Government and EDF Group have reached commercial agreement on the key terms of a proposed investment contract for the Hinkley Point C nuclear power station in Somerset. The press release summarises the key terms, which include a Strike Price of £89.50/MWh fully indexed to the Consumer Price Index and a contract difference payment duration of 35 years. (21 October 2013)

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Permitting and Licensing

DEFRA: Local authority environmental regulation of industrial plant: 2014 to 2015 fees and charges in England: seeks views on proposed fees and charges to be levied by local authorities under the Local Air Pollution Prevention and Control  (LAPPC) and Local Air - Integrated Pollution Prevention and Control (LA-IPPC) industrial pollution control regimes. The consultation closes on 18 December 2013. (22 October 2013) 

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Renewable Energy

DECC: Another £5m for social landlords to install renewable heat: announces that 57 social landlords have been awarded a share of £5m funding from a second round of the Renewable Heat Premium Payment (RHPP) Social Landlords competition. Bids were scored on a range of criteria including value for money, fuel to be replaced, additional energy efficiency measures to be installed and plans to work with local communities. The winning projects will need to be completed and claims made to the Energy Savings Trust by 30 June 2014. (24 October 2013)

DECC: Training voucher scheme launched to help industry install renewable heating systems: announces a new £500,000 fund aimed at raising the skill set of domestic heating engineers so they can install and maintain renewable heating systems. The Renewable Heat Incentive training support voucher scheme will be administered by GTEC Training Ltd. It will be backed up by an apprenticeship initiative that will encourage people coming into the industry to develop the necessary expertise to work on these systems and gain relevant qualification credits. (24 October 2013)

DECC: UK renewable energy roadmap – 2013 update: the 2011 Renewable Energy Roadmap laid out a framework and set of actions for the delivery of renewable energy deployment, with six key areas where activity was needed to tackle cross cutting barriers. This second Update to the Roadmap sets out the progress that has been made and the changes that have occurred in the sector over the past year. It also describes the Government's continuing high ambitions and its actions along with the challenges going forward. (5 November 2013)

DECC: Speech to the Renewable UK Conference: the Energy Secretary Edward Davey has given a speech to the Renewable UK conference in Birmingham, in which he reaffirmed the Government’s commitment to the renewable energy sector and announced further investment in offshore wind innovation projects. Four offshore wind projects will receive a share of £2.5m funding under the Offshore Wind Component Technologies Scheme to develop technologies which cut the cost of offshore wind energy. (5 November 2013)

DECC: Renewables Obligation (RO) grace periods: following detailed analysis of resonses to previous consultations on the Government's intention to close the RO to new generating capacity from 31 March 2017, this paper seeks views on more detailed proposals on grace periods for the Renewables Obligations in Great Britain, and the mechanism by which the closure of the RO and the grace periods will be implemented across Great Britain. The aim is to implement these proposals via a Renewables Obligation Closure Order 2014, to come into force in Spring 2014. The proposals are subject to the Energy Bill, which is currently before Parliament, and to Parliamentary approval of the Order, and any State Aid clearances that may be required. The consultation period closes on 28 November 2013. (7 November 2013)

DECC: Condensing biomass boilers qualify for domestic RHI: announces that condensing biomass boilers will be eligible for the domestic Renewable Heat Incentive scheme, following confirmation from Government analysis that the risk from certain pollutants discharged from such boilers is minimal. This change applies to eligible condensing biomass boilers installed between 15 July 2009 and the launch of the scheme in Spring 2014, as well as those installed after the launch of the scheme. (12 November 2013)

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Shale Gas

Bloomberg New Energy Finance: The economic impact on UK energy policy of shale gas and oil: this response to the House of Lords Call for Evidence summarises BNEF’s research on 13 questions about the shale gas and oil market. (14 October 2013)

Public Health England: Review of the potential public health impacts of exposures to chemical and radioactive pollutants as a result of the shale gas extraction: this draft literature review examines the potential public health impacts of exposures to chemical and radioactive pollutants as a result of shale gas extraction. It finds that the currently available evidence indicates that the potential risks to public health in the vicinity of shale gas extraction sites are low if shale gas extraction is properly run and regulated. Most evidence from other countries suggests that any contamination of groundwater, if it occurs, is likely to be caused by leakage through the vertical borehole, while contamination of groundwater from the underground fracking process itself is unlikely because of the depth at which it occurs. The report has been published as a draft for comment. The closing date for comments is 29 November 2013. (31 October 2013)

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Smart Metering

DECC: Smart Metering – Maximising the technology: transcript of speech given by Baroness Verma to the Smart Metering: maximising the technology, Intellect lunch at London MArriott County Hall. She talks about how smart meters are a key part of the energy efficiency agenda. She summarises what the Government has done so far and its plans for rolling out the programme. (15 October 2013)

DECC: New Smart Energy Code content (Stage 2): seeks views on the content of Stage 2 of the Smart Energy Code (SEC), which governs the end-to-end management of smart metering in Great Britain. The SEC is a multiparty contract which sets out the terms for the provision of the DCC’s Smart Meter communications service, and specifies other provisions to govern the end-to-end management of Smart Metering. It also seeks views on DECC's proposed policy approach for Communications Hub charging and proposes legal text to support the delivery of cost-effective, viable and sustainable third party financing for Communications Hubs. The consultation closes on 29 November 2013. (17 October 2013)

DECC: Licence conditions for non-domestic smart metering issues: seeks views on draft amended licence conditions set out in Annex 4 to Parts 1 and 2 of the document that give effect to the Government’s decisions following the July 2013 consultation on rules governing smart and advanced metering in the non-domestic market. These decisions include confirmation that the date to which advanced electricity and gas metering may be installed at smaller non-domestic premises, and not replaced before the end date for the roll-out, will be extended to 5 April 2016. Any contractual arrangements providing for continued installation of advanced metering after 5 April 2016 and until the roll-out completion date will need to be in place at that point. The consultation closes on 19 November 2013. (22 October 2013)

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Wave & Tidal Energy

RenewableUK: Wave & tidal consenting position papers: this series of position papers has been developed in collaboration with industrial stakeholders, key consenting bodies, NGOs and regulators. They provide a summary of key research and evidence on the impacts of the wave and tidal energy industry on the marine environment and methods for minimising or mitigating them, as well as making a series of recommendations that will help steer further work. The issues covered are:

(7 November 2013)

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Wind Energy

RenewableUK: Small and medium wind UK market report 2013: this report examines the current size of the small and medium wind sectors in the UK. It comments on the current dynamics of the UK domestic and export market and explores some of the key opportunities and challenges to future market development. (17 October 2013)

RenewableUK: Wind energy in the UK – State of the industry report 2013: this annual report examines in detail the state of the onshore and offshore wind energy industries in 2012/13, which was a record year in terms of deployment. The report shows that:

  • offshore wind capacity grew by a record 79% in 12 months;
  • the amount of onshore and offshore wind installed increased by over 40% since last year;
  • for the first time, more wind was built offshore than onshore in 12 months;  
  • offshore projects are getting bigger, while onshore projects are becoming smaller.

(6 November 2013)

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