Energy Eye – June 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.

12/06/2014

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:

   Biomass    Infrastructure
   Carbon Capture & Storage    Procurement
   Climate Change    Renewable Energy
   District Heating    Shale Gas
   Electricity Market Reform    Solar Energy
   Energy Efficiency    Wind Energy
   Green Deal  

Biomass

Institute for European Environmental Policy: Space for energy crops – assessing the potential contribution to Europe’s energy future: environmental NGOs Birdlife Europe, the European Environment Bureau, and Transport & Environment commissioned this study to assess how much land is actually available in the EU to sustainably grow energy crops and how much could this realistically be expected to contribute to meet EU energy demand in 2012. The study considers the availability of land within the EU where energy crops could be grown sustainably (without causing indirect land-use change or biodiversity loss) and the energy crops that could be grown on this land. The study analyses the impact of the generated biomass in different sectors relying on bioenergy. (21 May 2014)

Institute for European Environmental Policy: Forest biomass for energy in the EU – current trends, carbon balance and sustainable potential: this study, commissioned by European environmental NGOs Birdlife Europe, the European Environmental Bureau and Transport & Environment, aims to assess what the implications of increasing forest bioenergy use are for the natural environment and climate, and at estimating the amount of forest-derived woody biomass that could sustainably be supplied for energy use within the EU up to 2030. The premise for this study is that EU bioenergy polices should not be based on expanding the EU global footprint and that a massive increase of wood imports (and the environmental and GHG impacts) would be very difficult to control. The potential of imported wood for energy is therefore not considered. (21 May 2014) 

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Carbon Capture and Storage

European Commission: Review of Directive 2009/31/EC on the geological storage of carbon dioxide (Carbon Capture and Storage Directive): Art.38 of the CCS Directive requires a thorough review of the Directive to assess whether it still provides an adequate regulatory framework for CCS in the EU. The main purpose of this study is to assess the effectiveness, efficiency, coherence, relevance and EU added value of the CCS Directive, as well as to provide an assessment on how the enabling policy of CCS at European level has in practice worked out so far. The study aims to expand and deepen this understanding to obtain a comprehensive view of the current state of the CCS deployment in Europe and the functioning of the CCS Directive therein. The closing date for stakeholders' submissions is 16 June 2014. (16 May 2014)

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Climate Change

HMRC: Registering for Climate Change Levy (Notice CCL1/1): this revised guidance provides information about registering for main rates of climate change levy (CCL) and the carbon price support (CPS) rates of CCL. It is designed to help those who may need to register for the levy decide whether they need to do so, and provides guidance on how to register and how to cancel a registration. (1 June 2014)

HMRC: Combined heat and power schemes (Notice CCL1/2): this notice explains the liability to the main rates of CCL of taxable commodities supplied (a) to a combined heat and power (CHP) station and (b) by a CHP station. It also provides guidance to electricity utilities who wish to supply Good Quality CHP source electricity to consumers. (1 June 2014)

Climate Change Agreements (Eligible Facilities) (Amendment) Regulations 2014 (SI 2014/1318): these regulations, which come into force on 1 July 2014, amend SI 2012/2999 by adding two new descriptions of relevant processes and activities carried out at an installation or a site (standalone data centres and sawmilling sector) for the purposes of determining whether or not the installation or site is a facility that is eligible for inclusion in a Climate Change Agreement. (27 May 2014)

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Community Energy

DECC: Support for community energy projects under the Feed-in Tariffs Scheme: seeks views on support for community energy projects under the Feed-in Tariffs Scheme, looking at increasing the maximum capacity for community anaerobic digestion, hydro onshore wind and solar PV projects from 5MW to 10MW under the FITs scheme, and whether more can be done to allow grants to be combined with FITs payments for community projects up to 5MW. The consultation closes on 7 July 2014. (13 May 2014)

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District Heating

International Energy Agency: Linking heat and electricity systems – Co-generation and district heating and cooling solutions for a clean energy future: co-generation technologies and efficient district heating and cooling (DHC) networks offer significant environmental and energy security benefits, and can serve as flexible tools to bridge electrical and thermal energy systems. Yet despite these advantages, and successful implementation in some countries, to date, global deployment has been limited. This report examines some of the reasons behind the slow progress, including local energy market conditions failing to ensure energy prices that reflect generation costs, lack of long-term visibility of energy policy and poor strategic planning for heating and cooling infrastructure, and analyses a number of case studies. It provides recommendations intended to help policymakers better understand the drivers of deployment of co-generation and DHC systems, and overcome policy and market barriers to increased cost-effective penetration of these efficient energy options. The report provides a set of policy measures and recommendations to overcome market and policy barriers from an energy systems integration approach. (21 May 2014)

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Electricity Market Reform

DECC: Electricity Market Reform – A further consultation on the use of technology groupings, minima and maxima: this document sets out the Government's response to the January consultation on how it  intended to manage the first CfD allocation round. It includes decisions on technology groupings and budget management, and has an overview of the CfD budget allocation approach. DECC is now asking for stakeholders' views on additional policy proposals, including the treatment of biomass conversion and Scottish Islands projects under the enduring regime, and the use of minima and maxima within technology groups. This further consultation closes on 10 June 2014. (13 May 2014)

DECC: Final Investment Decision (FID) Enabling for Renewables – Investment contracts: DECC has published the signed Investment Contracts (early Contracts for Difference) that have been awarded under the Government’s reform of the electricity market. Each contract is accompanied by a statement from the Secretary of State for Energy and Climate Change covering the matters required by the Energy Act 2013. (10 June 2014)

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Energy Efficiency

International Energy Agency: Energy Efficiency Indicators – Essentials for policy making: this paper is aimed at providing policy makers and energy analysts with the tools needed to determine the priority areas for the development of energy efficiency indicators and how to select and develop the data and indicators that will best support energy efficiency policy making. In addition, the indicators provide a basis for international comparisons that can help identify best practices for effective policy design and implementation in countries. (19 May 2014)

Energy Efficiency (Encouragement, Assessment and Information) Regulations 2014 (SI 2014/1403): these regulations, which come into force on 26 June 2014, transpose certain provisions of the Energy Efficiency Directive 2012/27 into UK law. Duties imposed on the competent authorities include: encouraging SMEs to undergo energy audits; undertaking an assessment of the potential for the application of high-efficiency cogeneration and efficient district heating and cooling by 31 December 2015; ensuring access to, and dissemination of, information on energy efficiency mechanisms; and promoting the energy services market. (5 June 2014)

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Green Deal

DECC: The Green Deal – Guide to the Domestic Renewable Heat Incentive: guide to the Domestic Renewable Heat Incentive (RHI), a long-term government financial support scheme for homeowners and landlords to install renewable heating systems in their homes. It covers certain types of hot water and heating systems, including heat pumps, biomass boilers and solar thermal systems. Successful applicants will receive quarterly payments for seven years. The size of the payment depends on the size of the property and the type of renewable heating system installed. (6 June 2014)

DECC: Installer, provider and assessor quick guide to the Green Deal Home Improvement Fund: supply chain guide to the new Green Deal Home Improvement Fund. The scheme enables people in England and Wales to get up to £7,600 back on the contributions they make towards installing a range of energy efficiency measures such as solid wall insulation and new heating systems. The scheme is open for one year with guaranteed rates for the first £50m.
There is also a Consumer quick guide. (9 June 2014)

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Infrastructure

Queen’s Speech 2014: the Queen has outlined the Coalition Government’s legislative programme for the next year, on the State Opening of Parliament. One Bill of particular interest to the energy sector is the Infrastructure Bill – this aims to bolster investment in infrastructure by allowing stable long term funding, delivering better value for money and relieving unnecessary administrative pressures. The Bill will increase transparency of information provision and improve planning processes. In particular, it will enable the Secretary of State to give communities the right to buy a stake in their local renewable electricity scheme so that they can gain a greater share in the associated financial benefits. Subject to consultation, the Bill will support the development of gas and oil from shale and geothermal energy by clarifying and streamlining the underground access regime. The Government will also introduce a levy-making power so that the costs of funding a larger, better resourced regulator can be paid for by industry rather than by the taxpayer as is currently the case. In addition, Zero Carbon Home standard will be set at Level 5 of the Code for Sustainable Homes, but developers will be able to build to Level 4 as long as they offset through the allowable solutions scheme to achieve Code 5. The Bill has been introduced into Parliament and received its 1st Reading.
For further details, see the Government's background briefing notes. (4 June 2014)

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Procurement

Cabinet Office: Procurement Policy Note 07/14 – Implementing Article 6 of the Energy Efficiency Directive: this note explains how the Government is implementing the requirements of Art.6 of Directive 2012/27, which requires “central government departments” in EU member states to purchase highly energy efficient products, services and buildings, as set out in Annex III. This is a qualified duty and authorities do not have to buy the default product, service or building where this is not cost effective or does not allow effective competition. The PPN sets out  how organisations must comply with the requirements of the Article for purchases made on or after 5 June 2014. (3 June 2014)

Bevan Brittan byte size procurement updates: we have published five more articles in our "byte size" legal update series, in which we look at the new Public Sector Directive and deconstruct it into a topic based approach. For each topic we provide a brief explanation of the most relevant new and updated provisions in the new Directive. We also highlight some of the practical implications of those provisions:

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Renewable Energy

Ofgem: Feed-in Tariff – Guidance for renewable installations (Version 6.1): provides an overview of the FIT scheme, its eligibility criteria and explains the process of seeking accreditation and preliminary accreditation. This document is intended for owners, or potential owners, of Solar PV and wind installations with a Declared Net Capacity (DNC) over 50kW up to a Total Installed Capacity (TIC) of 5MW, and all anaerobic digestion and hydro installations up to a TIC of 5MW, who want to benefit from the FIT scheme. (23 May 2014)

Renewable Heat Incentive Scheme (Amendment) Regulations 2014 (SI 2014/1413): these regulations, which come into force on 28 May 2014, amend the RHI Regulations 2011 (SI 2011/2860) in order to improve the scheme and increase deployment of renewable heating technologies in the non-domestic sector. The main changes relate to: expansion of the non-domestic scheme; tariff review; changes to rules on public grants; clarification of eligibility rules; and budget management. (27 May 2014)

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Shale Gas

DECC: Consultation on proposal for underground access for the extraction of gas, oil or geothermal energy: seeks views on proposals to reform the procedure for gaining underground access to oil or gas deposits and geothermal energy. The consultation examines the existing procedures by which companies who wish to extract oil, gas or geothermal energy obtain access to underground land, and the problems raised by these procedures. It sets out the policy position in relation to underground access rights for shale and geothermal operations, with proposals for: uderground right of access for shale gas and deep geothermal operations only below 300m; a voluntary community payment of £20,000 per lateral well; and a clear notification system to alert local people. The consultation closes on 15 August 2014. 
There is also an Underground drilling fact sheet. (23 May 2014)

FoE: All that glitters – Critique of fracking regulation: Ministers and the fracking industry have made assurances that fracking in the UK will be safe because we have ‘gold standard’ regulation, avoiding the dangers of fracking experienced in other countries. This report argues that far from being ‘gold standard’, much of UK fracking regulation is inadequate, flawed or ineffectively applied and enforced. Some potential impacts are simply not considered at all. This exposes the country to unacceptable risks to the local environment and health and from rising carbon emissions. There is also an executive summary. (3 June 2014) 

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Solar Energy

DECC: Consultation on changes to financial support for solar PV: seeks views on measures to support rooftop deployment of solar PV and to rein in the growth of large solar PV projects. It proposes: 

  • closing the RO in Great Britain to solar PV capacity greater than 5MW from 1 April 2015; 
  • keeping the RO open for projects under 5MW which are not eligible for the new Contracts for Difference (CfDs); projects above 5MW will be able to apply for CfDs; 
  • grace periods for developers who have made significant financial commitments to projects on or before 13 May 2014 allowing them to enter the RO after 1 April 2015; 
  • splitting the stand-alone and greater than 50kw FITs degression band into two new bands to encourage more deployment of building mounted solar PV.

The consultation closes on 7 July 2014. (13 May 2014)

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Wind Energy

Scottish National Heritage: Siting and designing wind farms in the landscape: provides advice on the siting and design of wind farms in Scotland’s landscapes, drawing on two decades of experience of planning for wind farms by SNH, planning authorities and landscape assessors. It advises on how wind farms can be designed to best relate to their setting and minimise landscape and visual impacts. It does not refer to wider technical design considerations (such as wind speed, access to grid) or to other natural heritage issues (such as impacts on birds, other wildlife and habitats) which are also of importance. Part 2 on spatial planning has been removed and will be updated following publication of the new Scottish Planning Policy later in 2014. (May 2014)

Renewable UK: Local supply chain opportunities in onshore wind – Good practice guide: this guide aims to encourage the development of the onshore wind supply chain throughout the UK. It provides developers, operators, contractors and the wider supply chain with practical advice on capitalising on the commercial opportunities that onshore wind brings, both locally and nationally. It highlights innovative approaches taken by developers and contractors in identifying and utilising local suppliers in the development of their projects to ensure that the environmental benefits of renewable energy are complemented by economic benefits. (5 June 2014)

DECC: Driving down the cost of offshore wind: announces that the offshore transmission regime has been extended, enabling more winds farms to be brought in to the competitive system. Investors are now able to bid competitively to maintain and run the high voltage cables and infrastructure between offshore wind farms and the grid, making offshore wind less costly to develop. It also means that projects can move ahead at a faster pace and electricity can be brought onto the grid more quickly. The regime has also been expanded to give wind farm developers the option of asking a winning bidder to construct the transmission assets, as well as maintaining and running them. This means developers will not have to tie up their capital in connecting infrastructure and can plough their funds into constructing more offshore wind farms. (10 June 2014)

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