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:
|Electricity Market Reform
|Green Deal and ECO
Renewable Energy Association: UK biofuels sector - Key facts & figures: this briefing contains information on investment, jobs, fuels and emissions in UK transport, food and fuel, and indirect land use change. (25 June 2013)
Committee on Climate Change: Meeting carbon budgets – 2013 Progress report to Parliament: this is the Committee's fifth statutory report to Parliament on progress towards meeting carbon budgets. It considers the latest data on emissions and their drivers, and assesses progress in developing new policies which are required in order to reduce emissions. The report includes assessment at the level of the economy, the non-traded and traded sectors, the key emitting sectors and the devolved administrations. The main conclusion is that there has been good progress implementing some measures, notably loft and cavity wall insulation, boiler replacement, new car efficiency, investment in renewable power generation, and waste emissions reduction. (26 June 2013)
DECC: Community energy – Call for evidence: seeks views on how local communities can take charge of managing and generating their own energy, ahead of the UK’s first ever Community Energy Strategy. This will also deliver a commitment in the Coalition Agreement to encourage community-owned renewables schemes where local people benefit from the power produced. It covers the following areas: evidence of the potential benefits of community energy; understanding the barriers to community energy; and identifying innovative approaches and new approaches. The consultation closes on 1 August 2013. DECC has also published a research report that summarises the existing evidence about the role and impact of community energy activity in the UK, highlights gaps in the evidence base, and suggests ways they might be filled in the future. (6 June 2013)
DECC: £15m fund for rural energy projects opens to applications: announces the launch of the Rural Community Energy Fund (RCEF), which is specifically targeted at helping rural communities access the money needed to carry out feasibility studies into renewable energy projects, and fund the costs associated with applying for planning permission. The RCEF offers funding in two stages: a grant of up to £20,000 on offer for feasibility studies into renewable energy projects in local areas, following which communities can apply for a loan worth up to around £130,000 to help with project costs. The loan is repayable to Government once projects have received the necessary private sector funding required to get them up and running. (28 June 2013)
The application form is available on the WRAP website.
DECC: More community energy projects to get support under Feed-in Tariffs: announces amendments to the Energy Bill that is currently before Parliament, which would enable communities to receive Feed-in Tariff (FITs) payments for the green energy generated by larger community energy projects up to 10MW such as such as solar PV on school roofs or on libraries and community owned wind turbines. Support for community renewable projects over 5MW is currently available under the Renewables Obligation (RO). In response to feedback from community groups on the type of financial incentive that works best for them, DECC is planning to increase the threshold for community projects under FITs to enable larger projects to benefit. (3 July 2013)
DECC: Electricity Market Reform – Delivering UK investment: the Government's Electricity Market Reform plans include Contracts for Difference (CfD), which will provide long term support for all forms of low-carbon generation, including nuclear, renewables and Carbon Capture and Storage. This document sets out key information on CfDs, including draft Strike Prices that will be available from 2014 - 2019 for renewable electricity, which effectively remove price volatility risk for electricity generated from low-carbon sources, and key CfD terms that will form the basis for the final CfD contracts and which provide a number of protections and flexibility to developers. (27 June 2013)
DECC: Electricity Market Reform – Capacity Market: Detailed design proposals: the Capacity Market is intended to incentivise sufficient reliable capacity to ensure a secure electricity supply even at times of peak demand. This document contains more detailed proposals for how the Capacity Market should work. The Government intends to consult in the autumn on its proposals on the design of the Capacity Market, and will draft secondary legislation to implement them, so that legislation can be further refined prior to coming into force in July 2014. (27 June 2013)
DECC: Final Investment Decision Enabling for Renewables (Updates 1 & 2): the FID Enabling for Renewables programme is designed to enable developers of renewable energy projects to take final investment decisions, or other critical investment decisions directly impacting on the time to commissioning the project, which would otherwise be delayed by the uncertainty caused by the transition to the enduring Contracts for Differences (CfD) regime. DECC has published more details of the process, evaluation criteria and indicative timetable for Phase 2 of applying for an Investment Contract. The closing date for Phase 2 applications is 6 September 2013. The updates state the qualifying criteria which projects must meet to participate in FID Enabling, provide an update on forms of support that are available under the FID Enabling project and invite developers to apply for participation in the FID Enabling for Renewables project. (27 June 2013)
DECC: DECC sponsors new energy efficiency awards: announces that DECC is sponsoring three new energy efficiency awards at the 2013 Green Economy Awards, covering: SME energy efficiency innovation; building energy efficiency improvement; and catalysing major energy efficiency improvement. The awards enable businesses to boost their profile, celebrate success and showcase how they have used energy efficiency measures to drive a positive commercial impact. The closing date for entries is 21 June 2013. (5 June 2013)
DECC: £19m available for energy entrepreneurs: invites entrepreneurs with innovative ideas and products in energy efficiency, storage and low carbon generation can today apply for a share of £19m of funding from the second phase of the Energy Entrepreneurs Fund. The funding is available on a competitive, rolling basis to support projects up to a maximum value of £1m for work completed by 31 March 2015. The deadline for the first call for applications within this second phase is 12 July 2013 and applicants must first register their contact details by 5 July. (13 June 2013)
Energy Bill: this Bill has completed its stages in the House of Commons and received its 2nd Reading in the Lords. It is currently being considered by the Lords' Committee. The Bill includes the introduction of a Capacity Market, long-term Contracts for Difference, and an Emissions Performance Standard to prevent use of unabated coal, with the aim of reducing emissions and unlocking private sector investment in a low-carbon energy mix of renewables, new nuclear, CCS and gas. Following feedback from the Energy and Climate Change Select Committee, the Government has amended the Bill by adding a clause that will enable a 2030 decarbonisation target for the power sector in 2016, once advice has been provided by the Committee on Climate Change on the level of the 5th Carbon Budget, which will be provided in 2016. In addition, Ofgem’s powers have been strengthened and Government has amended the Bill so that if companies are found to have mis-sold energy to consumers, they will have to provide financial compensation direct to customers as well as paying fines to the regulator. (18 June 2013)
The House of Lords Library has published a Library Note on the Energy Bill that gives background information for the 2nd Reading of the Bill in the Lords. It summarises the Report stage and 3rd Reading in the Commons on 3-4 June 2013, where debate focused on setting a decarbonisation target for the electricity sector, electricity market reform and consumer protection.
See also the Memorandum from DECC to the Delegated Powers and Regulatory Reform Select Committee that identifies the 71 provisions in the Energy Bill which confer power to make delegated legislation. It explains the purpose of the delegated power proposed, why the matter is to be dealt with in delegated legislation and the nature and justification for any parliamentary procedures that are proposed. (17 June 2013)
DEFRA: The National Adaptation Programme – Making the country resilient to a changing climate: this report sets out what leading businesses, councils and communities, as well as Government, are doing to tackle climate threats and take advantage of new opportunities. It looks at the risks posed by the changing climate and sets out a mix of policies and actions to help the UK to adapt successfully to future weather conditions, by dealing with the risks and making the most of the opportunities. (1 July 2013)
Ofgem: Guidance for renewable installations – Change to statement of FIT terms: this open letter provides information regarding FIT payments in the event of a FIT licensee losing its licence or becoming insolvent. (24 June 2013)
Ofgem: Guidance for licensed electricity suppliers – Changes to guidance: seeks views on revised FIT Guidance for Licensed Electricity Suppliers. The guidance is being updated as a result of amendments to the Feed-in Tariffs Order 2012 that allow FIT generators to continue to receive FIT payments in the event that a FIT licensee has its licence to supply electricity revoked or suffers insolvency, and that also allow for greater flexibility in managing periodic levelisation shortfalls through the mutualisation process. The closing date for comments is 19 August 2013. (24 June 2013)
DECC: More community energy projects to get support under Feed-in Tariffs: announces amendments to the Energy Bill that is currently before Parliament, which would enable communities to receive FITs payments for the energy generated by larger community energy projects up to 10MW, such as such as solar PV on school roofs or on libraries and community owned wind turbines. Support for community renewable projects over 5MW is currently available under the Renewables Obligation (RO). In response to feedback from community groups on the type of financial incentive that works best for them, DECC is planning to increase the threshold for community projects under FITs to enable larger projects to benefit. (3 July 2013)
DECC: Guidance on CCA licence requirements for Green Deal participants: this document has been produced in conjunction with the OFT in response to requests by Green Deal participants for guidance on whether a licence may be needed under the Consumer Credit Act 1974. It solely concerns activities in relation to the Green Deal; if other activities are undertaken on the same occasion, or separately, these may be licensable. (5 June 2013)
DECC: Green Deal providers walkthrough guide: provides a simplified overview of the process a Green Deal provider can go through to create a Green Deal Plan. It shows the various interactions and steps that a provider is likely to undertake when developing a Green Deal Plan, including information about the systems providers are likely to use and the software needed to interact with these. The overview also contains links to more detailed explanations, guidance documentation and third party websites such as software or finance companies. (10 June 2013)
DECC: Green Deal – Quick guide to consumer complaints: guidance for consumers on whom to contact with a complaint about the Green Deal. (10 June 2013)
Ofgem: Energy Companies Obligation (ECO) – Appropriate guarantees: this document lists the guarantees that Ofgem has reviewed, and that Ofgem considers meet the criteria for an appropriate guarantee as listed in Chapter 8 of the Energy Companies Obligation (ECO): Guidance for Suppliers. If a supplier uses one of these guarantees, Ofgem will, when assessing the savings notified by the supplier for cavity or solid wall insulation, accept that the guarantee is an appropriate guarantee. A supplier is not required to use a guarantee listed here but may choose to use another guarantee that the supplier considers meets the criteria. In this case Ofgem will, when assessing the savings notified by the supplier, make a judgement as to whether the guarantee is an appropriate guarantee. If the guarantee does not meet the criteria for an appropriate guarantee, Ofgem will be unable to attribute the savings notified by the supplier. (24 June 2013)
DECC: Green Deal inspiring energy saving action: reports on new research which shows the Government’s Green Deal is inspiring people across the UK to install energy saving home improvements. The research found that 47% of households who had received a Green Deal advice report following a Green Deal assessment said they either had or were getting energy saving measures installed; a further 31% said they would ‘definitely or probably’ install at least one measure. A separate study shows that Green Deal awareness has doubled over the early months of the scheme, increasing from 10% of households being aware in November 2012 (pre-launch) to 22% in May 2013. (25 June 2013)
HM Treasury: Investing in Britain's Future: sets out the Government's plans for investment in infrastructure from 2015, including:
- additional £800m funding in 2015-16 for the Green Investment Bank (GIB), enabling it to invest in low carbon infrastructure projects including renewable energy, waste management and energy efficiency;
- £75m of capital for investment in innovative energy projects that aim to lower the cost of deployment in technology areas such as offshore wind, renewable heat, carbon capture and storage, and to pilot approaches to permanently reducing demand for electricity;
- support for the UK shale gas industry, with plans for new guidelines on the planning and permitting regime for shale gas developments to make the process for approving developments clearer, a consultation on tax incentives to encourage exploration of potential shale areas and an industry-led scheme of community benefits so that communities are rewarded for their part in the UK’s energy sector (see further below); and
- details of the Electricity Market reforms with Strike Prices and more information on the Capacity Market (see further above).
(27 June 2013)
WWF: WWF position on shale gas in the EU – Keep Pandora’s Box firmly shut: in this position paper, WWF makes the case that there is no convincing science-based evidence that development of shale gas in the EU and its Member States would be compatible with short and long term decarbonisation of EU energy supply or with a move to help stay well below 2 degrees of global warming. It considers that the economic benefits of shale gas have been overstated, which could inhibit moves toward sustainable energy. It is also concerned about the various demonstrated and potential negative impacts which may pose unacceptable risks to people and the environment at local level. (7 June 2013)
DECC: Bowland shale gas study: this report, prepared by the British Geological Survey, sets out an estimate for the resource (gas-in-place) of shale gas in part of central Britain in an area between Wrexham and Blackpool in the west, and Nottingham and Scarborough in the east. It shows that the total volume of gas in the Bowland Hodder shale in northern England is some 1,300 trillion cubic feet. (27 June 2013)
Eurelectric: Communicating smart meters to customers – Which role for DSOs?: this paper clarifies what role distribution system operators will play in the three stages of the roll-out of smart meters to customers: preparation of the rollout, installation of the smart meters and post-installation support. (18 June 2013)
DECC: Smart Metering Implementation Programme – Government Response to the consultation on the second version of the Smart Metering Equipment Technical Specifications: sets out the Govenrment's response to the August 2012 consultation on the second version of the Smart Metering Equipment Technical Specifications (SMETS 2). This response addresses governance and assurance of security and interoperability, and on next steps for the Smart Metering Implementation Programme. (1 July 2013)
CJEU: The operation of a private photovoltaic installation which is connected to the network may entitle its operator to deduct input VAT: reports on the court's decision in Finanzamt Freistadt Rohrbach Urfahr v Unabhängiger Finanzsenat Auβenstelle Linz (C-219/12). F had a photovoltaic (PV) installation fitted on the roof of his house. Between 2005 - 2008 he fed into the network the whole of the electricity produced by his PV installation. He applied to the tax authority for the reimbursement of VAT which he had paid when purchasing the PV installation. The tax authority refused to reimburse F’s input tax on the ground that he had not carried out any economic activity by operating his PV installation. F's appeal was upheld, and the tax authority appealed. The Austrian Administrative Court applied to the CJEU for a preliminary ruling on whether the operation of a network-connected photovoltaic installation with no independent power storage capability, on or adjacent to a privately-owned house used for private residential purposes, which was technically designed such that the power generated by the installation was, on a continuing basis, below the total quantity of power privately consumed by the installation operator in the privately-owned house, was an 'economic activity' of the installation operator within the meaning of Art.4 of the Sixth VAT Directive 95/7.
The court held that it was. The operation of a PV installation constituted an ‘economic activity’ if it was carried out for the purpose of obtaining income on a continuing basis: the concept of ‘income’ must be understood as meaning remuneration received as consideration for the activity carried out. It followed that, for a finding that the exploitation of property was carried out for the purpose of obtaining income therefrom, it was irrelevant whether or not that exploitation was intended to make a profit. As F's installation produced electricity which was fed into the network in return for remuneration, F’s exploitation of that installation was carried out for the purpose of obtaining income therefrom. By the same token, as the supply of electricity to the network was being carried out on the basis of a contract concluded for an indefinite duration, that income was obtained on a continuing basis. It was irrelevant that amount of electricity produced by that installation was always lower than the amount of electricity consumed by the operator in meeting his household needs. (20 June 2013)
DECC: Energy trends – Renewable energy in 2012: this special feature article from the June 2013 edition of DECC's Energy Trends statistical publication summarises key data on renewable enrgy. It includes an early indication of the UK’s progress against the Renewable Energy Directive, and discusses key policies that impact on the delivery of renewable energy. (27 June 2013)
HC Energy and Climate Change Select Committee: A Severn barrage?: this inquiry examined the proposal from Hafren Power Ltd for an 18km fixed tidal barrage between Brean in England and Lavernock Point in Wales. It would have 1,026 Very-Low-Head (VLH) bi-directional turbines, generating approximately 16.5 TWh/year on both ebb and flood tides. The Committee concluded that while a tidal barrage could offer decarbonisation and energy security benefits, the Hafren Power project in its current form had not demonstrated sufficient value as a low-carbon energy source to override regional and environmental concerns. Alternative pathways exist to meeting the UK's 2050 carbon targets, along with alternative options for exploiting Severn tidal resources. Stronger public governance of these resources would offer the opportunity to develop alternative technologies and strengthen the evidence base before building a large-scale facility. (10 June 2013)
DECC: Onshore Wind call for evidence – Government Response to Part A (Community Engagement and Benefits) and Part B (Costs): sets out the Government's response to the September 2012 consultation on onshore wind. It states that the Government is to give communities a greater say over the siting of onshore wind farms, and reap increased benefits from hosting developments that do proceed. The package of measures will include a five-fold increase in the value of community benefits paid for by developers, and proposals that will require communities to be consulted earlier in the application process. Pre-application consultation with local communities will be compulsory for the more significant onshore wind applications, while best practice guidance from DECC to onshore wind developers will lay down the higher standards expected in relation to their engagement with communities, and a new register will monitor best practice. The press release summarises the response. (6 June 2013)
Crown Estate: Offshore wind operational report 2013: this report compiles details of UK offshore wind farms which are operational or nearing construction, showing both achievements, progress and the near-term potential. It shows that the total offshore wind farm output of green electricity for 2012 was 7.5 TWh) - enough to supply 6 per cent of all the homes in the UK, and since 2004, offshore wind energy has seen an annual growth rate of 54 per cent in generated electricity.
The Crown Estate has also announced a new leasing programme to encourage further investment in a range of offshore wind test and demonstration projects, including a leasing round for floating offshore wind technology. It is inviting industry to propose sites for the development of floating wind farms. Successful projects will include arrays of up to fifteen machines, utilising floating foundations and producing less than 100 MW. The technologies involved must not have been previously deployed commercially and the projects must be used solely for test and demonstration purposes. (12 June 2013)
DECC: Boost for inward investment and innovation in offshore wind: announces the creation of an Offshore Wind Investment Organisation (OWIO) to boost levels of inward investment and to further stimulate jobs in the UK offshore wind industry. The organisation will be a partnership between industry and Government, established by UK Trade & Investment, that will complement the work of DECC and BIS in delivering the Government-wide offshore investment objectives. DECC has also announced funding to support three innovation projects as part of Offshore Wind Components Technologies Scheme: Power Cable Services Ltd - £540,000 grant towards their high voltage subsea cable jointing technology project; Aquasium Technology Ltd, Burntisland Fabrications Ltd and TWI - £769,600 towards their cost-effective fabrication project; and Wind Technologies Ltd (Cambridge) - £728,355 grant to design, manufacture and test an innovative 5MW medium speed drive train concept. (12 June 2013)
Civil Aviation Authority: Policy and guidelines on wind turbines: revised CAA policy and guidance on a range of issues associated with wind turbines and their effect on aviation that will need to be considered by aviation stakeholders, wind energy developers and local planning authorities when assessing the viability of wind turbine developments. (28 June 2013)