Energy Eye - February 2014

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.

12/02/2014

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 Reduction    Energy Policy
   Climate Change Levy    Enforcement
   Community Energy    Green Deal
   Distribution    Procurement
   District Heating    Renewable Energy
   Electricity Market Reform    Shale Gas
   Energy Efficiency    Smart Meters

Carbon Reduction

DfT: Plug-in vehicle infrastructure grants – The second round of successful organisations: gives detailsof the second round of grant awards for plug-in vehicle charge points in train stations and public sector sites. The awards are part of the £9.3m allocated from the electric vehicle infrastructure funding as part of the Go Ultra Low campaign. (30 January 2014)
See also the Rapid Charger Network map.

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Climate Change Levy

HMRC: Climate Change Levy notices: HMRC has updated thee notices about CCL:

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Community Energy

DECC: Community Energy Strategy: this Strategy lays the foundation for future growth of community energy in the UK, focusing on creating a supportive environment for community energy and removing specific barriers to growth. It explains how the Government is supporting community energy across the four strands of generation, reduction, management and purchasing. It sets out the role that communities can play in helping to meet the UK’s energy and climate change challenges, including supporting a sustainable and secure energy system, reducing UK greenhouse gas emissions and lowering consumer bills. It stresses that, while Government can support community-led action on energy, to realise the full potential of community energy requires concerted support from many different organisations, and it gives examples of partnerships and collaborations.
The plans include:

  • £10m Urban Community Energy Fund to kick-start community energy generation projects in England;
  • £1m Big Energy Saving Network funding to support the work of volunteers helping vulnerable consumers to reduce their energy; 
  • a community energy saving competition, offering £100,000 to communities to develop innovative approaches to saving energy and money; and
  • a “one-stop shop” information resource for people interested in developing community energy projects.

The Government is challenging community energy groups to think about how they can work best with new partners, such as LEPs or local businesses, to make the most of these opportunities. (27 January 2014)

The Strategy is accompanied by a number of other documents:

  • Community renewable electricity generation – Potential sector growth to 2020: this independent report assesses the potential of Community Energy generation under different scenarios. The modelling focuses on the development of onshore wind, solar PV and hydro technologies, where there is a proven track record and an approach to delivery that has been replicated and so growth can be more realistically modelled. The methodology is based around testing the financial viability of community energy organisations’ ability to deliver varying proportions of the existing DECC forecasts for these three technologies to 2020. The figures produced are then reviewed in the light of additional factors like community capacity and other existing data sets for comparison and reality checking. (27 January 2014)
  • Community Energy in the UK – Part 2: sets out the key findings of a study on the scale and geographic distribution of community energy in the UK that was carried out by Databuild Research and Development, supported by the Energy Saving Trust. (27 January 2014)
  • Learnings from the DECC Community Energy Efficiency Outreach Programme: the Community Energy Efficiency Outreach Programme, carried out by Groundwork UK, was a community outreach programme to understand how community engagement and outreach can be effective in promoting energy efficiency measures in people’s homes. The six pilot areas (Bridgend, Bristol, Cornwall, Leeds, Manchester and Milton Keynes) were run alongside six ‘comparator’ areas. The results reveal that community engagement initiatives are effective when they focus on fewer, simpler steps and where advice is provided through a trusted, local source. The report also highlights the importance of continuing to use engagement measures to retain householder’s interest before completion of energy efficiency offers, as a high number of dropouts can occur otherwise. (27 January 2014)
  • Community energy survey: summarises the key findings from a survey of public attitudes to community energy in the UK which informed the Community Energy Strategy. The data was collected in January 2014. (12 February 2014)
  • DECC Local Energy Assessment Fund (LEAF) evaluation report: assessment of LEAF that aimed to help prepare communities in England and Wales to take action on energy efficiency and renewable energy and to take advantage of the opportunities offered by Government policies such as the Green Deal, Renewable Heat Incentive and Feed-In Tariffs. It was delivered between December 2011 and March 2012, with 236 community-led organisations sharing £9.2m. (27 January 2014)
  • Local Authority Competition evaluation report: presents the findings of a small, qualitative study of schemes funded under DECC's Local Authority Funding Competition 2012/13 that provided £46m funding for 130 local authority led projects on collective switching, fuel poverty alleviation and Green Deal pioneer activity. (27 January 2014)

DECC: Collective switching – Guidance for scheme organisers: collective switching schemes allow consumers to group together to increase their buying power and to negotiate a better deal from gas and electricity suppliers. This guidance for local authorities, housing associations and charities sets out what to think about before setting up a collective switching scheme. It reflects best practice and feedback from previous schemes. (27 January 2014)

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Distribution

DECC: Application to the Secretary of State for Energy & Climate Change from 1 October 2013 for the grant of a necessary (compulsory) electricity wayleave in England and Wales – Guidance for applicants and landowners and/or occupiers: updated guidance to electricity companies (holders of an electricity licence) who propose applying to the Secretary of State for the grant of a necessary wayleave for the installation of new electric lines or retention of existing electric lines or for a Felling and Lopping of Trees Order; and to owners and/or occupiers in England and Wales whose land is or may be the subject of such applications. (24 January 2014)

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District Heating

DECC: £2m awarded for local authority low carbon heat networks: announces the 26 local authorities across England and Wales that have been awarded a share of over £1.9m to support the development of heat network projects, designed to provide more efficient heat to buildings and potentially lower heating bills, through the Government’s Heat Networks Delivery Unit. (30 January 2014)
See also Bevan Brittan's alert: Heat networks and district heating – DECC funding to help local authorities develop new projects.

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Electricity Market Reform

DECC: Electricity Market Reform – Allocation of Contracts for Difference: seeks views on the following approach to the allocation of Contracts for Difference: 

  • Contracts will be allocated on the basis of allocation rounds. The period of ‘First Come First Served’ (FCFS) allocation that was previously considered will not apply.
  •  The CfD budget will be divided between: 
    • a group of ‘established’ technologies (Onshore Wind (>5 MW), Solar Photovoltaic (PV) (>5 MW), Energy from Waste with CHP, Hydro (>5 MW and <50 MW), Landfill Gas and Sewage Gas. 
    • a group of ‘less established’ technologies (Offshore Wind, Wave, Tidal Stream, Advanced Conversion Technologies, Anaerobic Digestion, Dedicated biomass with Combined Heat and Power and Geothermal). 
  • There will be constrained allocation (competition) for at least those technologies deemed ‘established’ from the commencement of allocation.

The consultation closes on 12 February 2014. The Government will publish its response confirming its approach to competitive allocation and technology groupings towards the end of February. It is also planning a further consultation in March 2014 that will explain proposals for any technology specific minima (floors) or maxima (caps) that could be used to further manage how the CfD budget will be allocated to particular technologies within the proposed technology groupings. It will set out further details of how the CfD auction process will operate in the coming weeks, in advance of the publication of a draft CfD Allocation Framework in March detailing the rules that will govern the administration of budget and contract allocation. (16 January 2014)

DECC: Supporting independent renewable investment – Offtaker of last resort: the Offtaker of Last Resort (OLR) is designed to provide eligible renewable electricity generators with a guaranteed route to market for their power under the Contract for Difference (CfD) mechanism. The policy has been designed as a support mechanism to promote greater investment by independent renewable generators. The OLR also aims to stimulate new supplier entry into the Power Purchase Agreement market, as generators will not be constrained by lenders relying on large suppliers with strong credit ratings. This paper seeks views on the key design features of the OLR, including which generators are eligible, which electricity suppliers are obligated to participate in the scheme and which can do so voluntarily, how the OLR will be allocated, and what its terms and conditions will be. The consultation closes on 24 March 2014. (11 February 2014)

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Energy Efficiency

Environment Agency: CRC Energy Efficiency Scheme guidance for participants in Phase 1 (2010-2011 to 2013-2014): updates previous versions of CRC Energy Efficiency Scheme Guidance for Participants in Phase 1 issued in 2012. It has been updated to reflect the outcome of the CRC simplification review. While the majority of the simplification proposals will be implemented at the start of Phase 2, some changes take effect for the last two years of Phase 1(2012-2013 and 2013-2014). (13 January 2014)

DECC: Energy Entrepreneurs Fund – Phase 3 documents: the Energy Entrepreneurs Fund is a competitive funding scheme to support the development and demonstration of novel, innovative technologies in a broad range of technology groups across the energy efficiency, power generation and energy storage sectors. DECC has launched Phase 3 of the shceme, with £10m now available for projects up to 31 March 2016. The documents include guidance notes, an application form and finance form.The closing date for registration, with expressions of interest and key project and contact details, is 17 February 2014. (28 January 2014)

European Commission: Progress towards the 2020 energy efficiency objective and a 2030 energy efficiency policy framework: seeks views on the issues related to energy efficiency policies and measures for 2020 and 2030. The replies will provide an important input to the review of progress towards the 2020 energy efficiency target under Article 3(2) of the Energy Efficiency Directive 2012/27. They will also be taken into consideration for the follow-up of the Communication “A policy framework for climate and energy in the period from 2020 to 2030” to establish the exact ambition of future energy savings policy and the measures necessary to deliver it. The consultation closes on 28 April 2014. (3 February 2014) 

DEFRA: Consultation on the transposition in England and Wales of Articles 14(5)-(8) of the Energy Efficiency Directive (2012/27/EU): the Energy Efficiency Directive 2012/27 updates the EU’s legal framework for energy efficiency, pursuing the target of saving 20% of the EU’s primary energy consumption by 2020, and of making further energy efficiency improvements after 2020. It includes specific actions to implement some of the proposals included in the Energy Efficiency Plan 2011, and establishes a common framework of measures for the promotion of energy efficiency within the EU. This paper seeks views on proposals to amend the Environmental Permitting Regulations in order to implement Art.14 of the Directive, which extends the scope and replaces the substantive provisions of the Cogeneration Directive 2004/8 relating to CHP. The consultation closes on 21 March 2014. (10 February 2014)

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Energy Policy

European Commission: A policy framework for climate and energy in the period from 2020 to 2030 (COM(2014) 15 final): this policy framework on climate and energy for 2030 builds on the existing ‘climate and energy package’ of targets for 2020 as well as the Commission’s 2050 roadmaps for energy and for a competitive low-carbon economy. The proposals include: 

  • a binding greenhouse gas reduction target of 40% emissions reduction below the 1990 level, met through domestic measures alone. The annual reduction in the ‘cap’ on emissions from EU ETS sectors would be increased from 1.74% now to 2.2% after 2020. Emissions from sectors outside the EU ETS would need to be cut by 30% below the 2005 level, and this effort would be shared equitably between the Member States; 
  • an EU-wide binding target for renewable energy of at least 27% in 2030. Attainment of the EU renewables target would be ensured by the new governance system based on national energy plans; 
  • improved energy efficiency: the role of energy efficiency in the 2030 framework will be further considered in a review of the Energy Efficiency Directive due to be concluded later this year. The Commission will consider the potential need for amendments to the Directive once the review has been completed; 
  • a new governance framework based on national plans for competitive, secure and sustainable energy; and 
  • a set of new indicators to ensure a competitive and secure energy system.

It is accompanied by a legislative proposal for a market stability reserve for the EU emissions trading system (EU ETS) starting in 2021, to improve its robustness, and a report on energy prices and costs in Europe, which suggests that the rising energy prices can be partly mitigated by ensuring cost effective energy and climate policies, competitive energy markets and improved energy efficiency. The European Council is expected to consider the framework at its spring meeting on 20-21 March. (22 January 2014)

DECC: Mid-year report 2013 - 2014: gives  an update on progress made against its five key Coalition priorities in the first six months of the 2013/14 financial year. It also includes financial information for DECC and shows progress against the indicators from its external business plan. (23 January 2014)

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Enforcement

Environment Agency: Enforcement and sanctions guidance for the European Union Emissions Trading System, CRC Energy Efficiency Scheme and Climate Change Agreements: seeks views on draft guidance on how the Agency will exercise its discretion to impose civil penalties for breaches under the EU ETS, CRC and CCA regimes. The consultation closes on 21 March 2014. (10 January 2014)

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Green Deal

DECC: Proposal to amend the information to be included in section 77A statements relating to Green Deal consumer credit agreements: seeks views on proposals to make a few specific amendments to the Consumer Credit (Information Requirements and Duration of Licences and Charges) Regulations 2007 to provide confidence to Green Deal providers that they can issue s.77A statements that are compliant with the requirements set out in these regulations.The consultation closes on 11 February 2014. (14 January 2014)

DECC: Green Deal Panel for Hard to Reach Audiences report: the Green Deal Panel for Hard to Reach Households, chaired by Laura Sandys MP, was formed to provide Government with recommendations on the most effective communication and engagement routes to communicate to hard to reach households the benefits of installing energy saving Green Deal measures, supported by the new Energy Company Obligation (ECO) where appropriate. This report summarises these views and makes subsequent recommendations for DECC and other government departments to consider. Overall, panel members found a strong consensus across all contributors on the best approaches and consequently emphasise the importance of using existing trusted channels of communication to reach and influence these households. (21 January 2014) 

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Procurement

New Procurement Directives: summary available following European Parliament vote: the European Parliament has voted to adopt three new Directives that replace the existing Public Sector and Utilities Directives and introducing a new Directive covering the procurement of works concessions and service concessions. It is likely that the Directives will come into effect in March 2014, following formal signature and publication requirements. Member States will have 24 months to implement the Directives but it is likely that implementation will happen sooner in the UK. (15 January 2014)
Bevan Brittan has produced a summary of the Procurement Directives as adopted following the vote.

Cabinet Office: Public Services (Social Value) Act 2012 – One year on: this paper reviews the implementation of the 2012 Act that requires commissioners to think about how they can secure wider social, economic and environmental benefits when procuring services. It outlines how commissioners have responded to the Act during its first year, and looks at the Government’s plans to advance social value in the future. (31 January 2014)

Cabinet Office: Procurement Policy Notes: the Cabinet Office has published three new PPNs providing guidance on best practice for public sector procurement:

  • PPN 01/14: Information sharing in Government procurement exercises: sets out the actions that should be taken to make sure that information can be shared within government and to protect government’s rights in the event of a dispute settlement agreement. (3 February 2014)
  • PPN 02/14: Extension of the Mystery Shopper service: announces the decision to extend the Cabinet Office’s Mystery Shopper service to carry out spot checks on procurement processes as well as continuing to deal with referrals raised by SMEs and other concerned suppliers. Spot checks will be undertaken by examining procurement documents, usually online, on procurement portals and checking for compliance with the relevant PPNs. (7 February 2014)
  • PPN 03/14: Measures to promote tax compliance: sets out the scope and background of the new policy requiring all suppliers bidding for central government contracts >£5m from April 2013 to self-certify their tax compliance. (7 February 2014)

Cabinet Office: New models of construction procurement: the Government has published draft guidance on new models of construction procurement, based on best practice in public sector construction. These will enable both central and local government bodies to work with industry in a consistent and collaborative way, building long term stable partnerships between client and suppliers. The models provide modern, innovative methods and tools, allowing clients to lead change and drive positive results. The guidance consists of:

The guidance documents have been issued as draft so that they can be road-tested before a formal launch in summer 2014. (29 January 2014)

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Regulation

Deregulation Bill: this Bill has been introduced into the Commons and received its 2nd Reading. The Bill proposes a range of measures in line with the Government’s aim to reduce burdens on businesses and public authorities. The proposals include the removal of several requirements under the Climate Change and Sustainable Energy Act 2006:

  • on local authorities, to have regard for any energy measures, reports or targets published by Government;
  • on Government, to set microgeneration targets; 
  • on the Secretary of State, to promote renewable heat; and
  • on the Secretary of State, to report on steps taken to ensure compliance with building regulations’ energy requirements.

(3 February 2014)
See also the Commons Library Research Paper that examines the provisions in the Bill.

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Renewable Energy

DECC: Second progress report on the promotion and use of energy from renewable sources for the United Kingdom: Member States are required under Art.22 of the Renewable Energy Directive to submit progress reports to the European Commission every two years on performance against their interim renewable energy targets. This second report covers performance against the 2011/2012 interim target. It pulls together a range of statistical data for 2011 and 2012, including data on renewable energy generation and consumption broken down between renewable electricity, heat and transport sectors, biomass use, land use, commodity prices and greenhouse gas savings. It also provides brief updates on the various policy measures and financial incentives in place to drive and unlock barriers to renewable deployment. (17 January 2014)

WWF: Renewable energy myths exposed – Why Europe's renewable energy future is bright, not blighted: as part of WWF’s work to ensure an adequate policy framework for renewable energy beyond 2020, this paper aims to dispel myths that it claims have been created by vested interests in fossil fuel industries that undermine the key to renewable energy’s success – a legally binding generation target. (17 January 2014)

DECC: Timber standard for heat & electricity: sets out how the Sustainable Forest Management Criteria will apply to the use of woodfuel under the Renewable Heat Incentive and Renewables Obligation. (10 February 2014)

DECC: Renewable Heat Training voucher scheme extended due to high demand: announces that the £500,000 fund aimed at expanding the skill set of domestic heating engineers to include renewable heating systems has been extended by an additional £150,000, in order to further bolster the supply chain in the run up to the launch of the domestic renewable heat incentive. (11 February 2014)

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Shale Gas

European Commission: Commission Recommendation on minimum principles for the exploration and production of hydrocarbons (such as shale gas) using high volume hydraulic fracturinG (C(2014) 267/3): the EC has adopted a Recommendation that aims to ensure that proper environmental and climate safeguards are in place for fracking. The Recommendation should help all Member States wishing to use this practice address health and environmental risks and improve transparency for citizens. It also lays the ground for a level playing field for industry and establishes a clearer framework for investors. The Recommendation is accompanied by a Communication that considers the opportunities and challenges of using fracking to extract hydrocarbons. Both documents are part of a wider initiative by the EC to put in place an integrated climate and energy policy framework for the period up to 2030. Member States are invited to apply the principles within six months and, from December 2014 onwards, inform the EC each year about measures that they have put in place. The EC will monitor the application of the Recommendation with a publicly available scoreboard that will compare the situation in different Member States. It will review the effectiveness of this approach in 18 months. (22 January 2014)

International Association of Oil & Gas producers (OGP): Good practice guidelines for the development of shale oil and gas: these guidelines provide global principles for operations under which more detailed standards and/or practices may be developed to meet regional and local circumstances. They give stakeholders an overview of how the oil and gas industry manages the risks associated with its operations. (31 December 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 literature review finds that the evidence indicates that the potential risks to public health in the vicinity of shale gas extraction sites are low if the extraction is properly run and regulated. Where potential risks have been identified, the reported problems typically result from operational failure and a poor regulatory environment. Therefore good on-site management and appropriate regulation of all aspects from exploratory drilling, gas capture and the use and storage of fracking fluid are essential to minimise the risk to the environment and public health. (27 January 2014)

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Smart Meters

DECC: Smart metering – A guide for local authorities and third sector organisations: gives an introduction to the Smart Metering Implementation Programme for local authorities and third sector organisations. Local authorities, housing associations, charities and community organisations can play a key role in helping people to get the full benefits of smart meters. This leaflet explains why this is important and what these organisations can do to support people in their community. (27 January 2014)

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