Energy Eye – March 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.

12/03/2014

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 Capture and Storage    Energy Supply
   Electricity Market Reform    Finance
   Emissions    Green Deal
   Energy Efficiency    Renewable Heat
   Energy from Waste    Shale Gas
   Energy Policy    Wind Energy

 

Carbon Capture and Storage

DECC: Peterhead Carbon Capture and Storage Project: announces Front End Engineering and Design (FEED) study funding for the Peterhead Carbon Capture and Storage (CCS) Project, as part of the CCS Commercialisation Competition. The project will investigate capturing more than 85% of CO2 emissions that would otherwise be emitted to the air; this CO2 will then be transported by pipeline to the Goldeneye platform in the North Sea for storage in a depleted gas reservoir about 2.5km below the sea bed. The FEED study will allow a detailed programme of engineering, planning and financial work to finalise and de-risk all aspects of the proposal ahead of taking the final investment decisions. (24 February 2014)

European Commission: Report on the implementation of Directive 2009/31/EC on the geological storage of carbon dioxide (COM(2014) 99 final): the Carbon Capture and Storage Directive 2009/13 establishes a legal framework for the environmentally safe geological storage of carbon dioxide (CO2) to contribute to mitigating climate change. Member States were required to implement the Directive by 25 June 2011. This report looks at progress with implementation in all the member States, and also highlights specific implementation issues. (25 February 2014)

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Electricity Market Reform

Draft Renewables Obligation (Amendment) Order 2014: this draft Order, which is due to come into force on 1 April 2014, amends SI 2009/785 so as to implement some of the decisions made following a number of consultations relating to the transition from the Renewables Obligation (RO) to Contracts for Difference. The changes are made in order to prevent duplication of support between the RO and the new electricity market reform (EMR) arrangements under Part 2 of the Energy Act 2013, to provide for a choice of support under the RO or under the EMR arrangements in some circumstances, and to improve the reporting requirements on the use of biomass under the RO. (12 February 2014)

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Emissions

DEFRA: GHG reporting guidelines - 2014 update: seeks views on proposals to amend the guidance on the way that companies report renewable electricity that they specifically purchase from their electricity suppliers. DEFRA believes that some revision is possible that would enable companies to report a reduced emissions figure, based on purchased renewable electricity, without the need for the additional carbon offsets. In order to do so, their electricity supplier would need to hold the requisite number of Renewable Energy Guarantees of Origin (REGOs) and take out of use any Levy Exemption Certificates (LECs) associated with the electricity in order to prevent re-sale and double-counting. This would be termed a ‘contractual’ or ‘market-based’ reporting approach and would be a significant change for many reporting entities. It is also proposing to enable companies to reflect purchases of biogas and biomethane, if they hold corresponding documents certifying that the gas has been injected into the gas grid. The aim is that the updated guidance will provide maximum transparency for the public and users of greenhouse gas reports, while also giving fair recognition to companies for their purchase of renewable electricity; it will therefore use a ‘dual reporting’ approach that uses both the contractual / market-based reporting and the location-based reporting accounting methods. The consultation closes on 24 March 2014. (24 February 2014)

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Energy Efficiency

DECC: Smart Grid vision and routemap: a smart grid is a modernised electricity grid that uses information and communications technology to monitor and actively control generation and demand in near real-time. This paper sets out the wide ranging benefits that smart grids will bring, such as: minimising consumer bills; allowing consumers to play a more active role in managing the energy system; increasing energy security; helping to facilitate the integration of low carbon technologies; and supporting economic growth. (27 February 2014)

DECC: Finalising CRC simplification – Treatment of renewable energy & the metallurgical and mineralogical sectors: Government response: in November 2013 the Government consulted on plans to simplify the CRC Energy Efficiency Scheme in order to incentivise the uptake of on-site renewable self-supplied electricity and to introduce an exemption to energy supplied to metallurgical and mineralogical processes. It also proposed amending the 2013 CRC Scheme Order to avoid the double counting of third party energy supplies under the CRC, Climate Change Agreements and EU Emissions Trading Schemes, and to allow more flexible and greater organisational disaggregation by CRC participants. This response states that the Government now intends to implement the proposals as set out in the consultation document. It is also making a few technical improvements to the 2013 Order, which are set out in Annex 1. (25 February 2014)

Environment Agency: H2 Energy Efficiency: seeks views on guidance for combustion and energy from waste plants (with a thermal input of 20 MW or more) on carrying out cost-benefit assessments of opportunities for combined heat and power or recovery of heat from industrial processes. This is in line with the requirements of Art.14(5-8) of the Energy Efficiency Directive 2012/27 which will be implemented by an amendment to the Environmental Permitting Regulations 2010. The Agency wishes to make sure that it has specified the right approach to carrying out the cost-benefit assessment, and that it has included the right parameters and values. The consultation closes on 11 April 2014. (27 February 2014)

DECC: The future of the Energy Company Obligation: seeks views on proposals to reduce pressures on consumer bills and ensure the Energy Company Obligation (ECO) provides value for money for energy consumers, whilst continuing to help tackle fuel poverty, support the development of a sustainable energy efficiency supply chain and improve the energy efficiency of our housing stock. The key proposals include the extension of the scheme to 2017, modifying the eligibility criteria for Carbon Saving Communities Obligation and allowable primary measures under Carbon Emissions Reduction Obligation (CERO) to ensure it is easier and cheaper to deliver, and to reduce the 2015 CERO obligation by 33%. It also puts forward a number of other improvements to ECO based on the experience of delivering the scheme since it commenced at the beginning of 2013. These include proposals to make ECO easier to administer, easier for customers to understand, and easier to access in rural and off-grid areas. The consultation closes on 16 April 2014. (5 March 2014)

CRC Energy Efficiency Scheme (Amendment) Order 2014 (SI 2014/502): this Order, which comes into force on 1 April 2014, amends SI 2013/1119 in order to finalise simplification of the non-domestic CRC Energy Efficiency Scheme for its second phase. The Order introduces an exclusion from the Scheme for energy used in metallurgical and mineralogical processes, and makes a number of other technical amendments to the 2013 Order to make the wording of the regulations clearer for participants. These include clarification that an English local authority is not a public body for the purposes of the Scheme in respect of the schools which it maintains. (10 March 2014)

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Energy from Waste

DEFRA: Energy from waste – A guide to the debate: in the 2011 Waste Review, the Government set the goal of ensuring that recovery of energy from waste and its place in the waste hierarchy is understood and valued by households, businesses and the public sector in the same way as reuse and recycling. This guide aims to help deliver that goal by providing a credible reference document to inform discussions and decisions relating to energy from waste. It highlights key environmental, technical and economic issues, and identifies options that could be considered and some of the main points where decisions can be influenced. This revised version of the guide includes an additional chapter which considers the future policy direction for energy from waste, identifying underlying principles that are likely to continue as key considerations for both government and the sector in the future. (26 February 2014)

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Energy Policy

DECC: Green Growth Group Ministers' statement on climate and energy framework for 2030: Environment ministers from 13 countries have called on member states and the European Council to agree an ambitious and cost-effective 2030 climate and energy framework, including a binding domestic greenhouse gas target of at least 40%, as a matter of urgency, or risk undermining commercial sector confidence, deferring critical energy investments, increasing the cost of capital for these investments, and undermining momentum towards a global climate deal. (3 March 2014)

ECN: On the design of an EU climate and energy policy framework for 2030 - with special reference to renewable energy: this paper from the Dutch energy research institute assesses some key instruments for EU climate and energy policies towards 2030 with special regard for dedicated stimulation of the share of renewable energy in the EU’s energy mix. The paper looks at which headline targets and instruments would enable effective climate policy, whilst serving the three so-called trilemma pillars of energy policy well. The key question on headline targets is whether a binding GHG emissions reduction target for 2030 suffices or, alternatively, that it is to be complemented with other headline targets with special reference to the uptake of renewables. (3 March 2014)

DECC: Transfer of energy-using products work to DECC: announces that policy responsibility for regulation of energy-using products will transfer from DEFRA to DECC from 3 March 2014. This covers the negotiation and oversight of the implementation of EU regulations covering a range of products that consume energy, such as the Ecodesign Directive 2009/125 for Energy Related Products, which sets minimum environmental performance standards, and the Energy Labelling Directive 2010/30 which sets out labelling requirements.  (3 March 2014)

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Energy Supply

DECC: A consultation on proposals to amend domestic energy supply licence conditions - requiring provision of key energy data in a machine readable format: seeks views on the Government’s proposed implementation of licence modifications to require energy suppliers to provide key, personalised energy data to their customers in a machine readable format, for example in a QR code, printed on all energy bills and statements of account. The Government believes exercising this power under the Energy Act 2013 provides a low cost opportunity to put consumers in a better position to choose the best tariffs for them. The consultation closes on 21 April 2014. (10 March 2014)

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Finance

HC Environmental Audit Committee: Green finance: this report examines the green finance gap, with investments currently running at less than half of the level needed to deliver the decarbonisation implicit in national and international emissions reduction targets. It states that more must be done to secure the required levels of green investment in areas such as low-carbon energy generation, energy efficiency, and transport. The Green Investment Bank has made a good start but it needs to be able to borrow to significantly enlarge the scale of its work. While the Government’s Community Energy Strategy addresses a number of the concerns raised during this inquiry and includes provisions likely to boost local schemes, the Committee is concerned that recent proposals from the European Commission may slow the transition to a low-carbon economy. The Government should work with the Commission to ensure proposals to reduce the threshold for small-scale feed-in tariffs are not carried through because they risk undermining the viability of community schemes. Priority needs to be given to securing early State Aid approval for the Green Investment Bank to invest in community energy and ensuring that all local authorities have the tools and resources to play a full part in making such schemes a widespread and successful part of the UK energy mix. (6 March 2014)

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Green Deal

DECC: The Green Deal – Cashback for energy-saving home improvers: updated guidance on the scheme that helps people to install energy efficiency measures by providing them with money back on the contributions they make towards improvements. The changes include increases to the amount of money consumers get back on some Green Deal measures, such as double glazing, solid wall insulation and ‘room in roof’ insulation (e.g. for those with loft conversions). (18 February 2014)

DECC: Green Deal Communities – Update: announces the first six schemes to be supported under the Green Deal Communities Fund. The initiative provides funding for local authorities, working with their partners, to support their ambitious and innovative street/area based proposals to deliver Green Deal plans to as many households as possible. The funding can also be used to support households who choose to self-finance measures (4 March 2014)

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Renewable Heat

Draft Domestic Renewable Heat Incentive Scheme Regulations 2014: these draft regulations, once in force, establish a Domestic Renewable Heat Incentive to facilitate and encourage the renewable generation of heat by giving subsidy payments to owners of eligible plants that generate heat from eligible renewable sources for domestic properties. They give functions to Ofgem to administer the scheme. They also specify the eligibility criteria for plants generating heat and set out participants' ongoing obligations. They also confer functions on the Secretary of State in relation to the review of the scheme and the preparation of quarterly forecasts which are used for tariff-setting. (11 February 2014)

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Shale Gas

International Centre for Trade and Sustainable Development: The shale gas revolution – Implications for sustainable development and international trade: this paper examines how the contribution of shale gas exploration to global climate change and effect on international trade is becoming increasingly complicated and indeterminate. Shale gas is transforming energy prices, industrial competitiveness, and geopolitics in a number of countries and further investigation and safeguards are needed to ensure that the shale gas “revolution” fosters, rather than hinders, sustainable development. The paper sheds light on these complex issues and calls on governments, industry and international agencies to evaluate the full effects of shale gas on the environment and climate change to determine how it can best fit into a sustainable development agenda. (11 March 2014)

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Wind Energy

Offshore Wind Programme Board: Annual report: the OWPB was established in November 2012 to identify and remove barriers to deployment of offshore wind generation, to share best practice across industry, and to bring forward innovative and collaborative solutions to build a competitive UK-based supply chain. It aims to deliver cost reduction and enable growth of a competitive UK-based supply chain as the industry grows and matures. This report highlights the Board's achievements in its first year, which has focused on establishing and embedding the work of the OWPB, and engaging across the sector to develop momentum in tackling the challenges and barriers to cost reduction and delivery of economic benefit to the UK. It also sets out its plans for 2014. (19 February 2014) 

DBIS: UK offshore wind supply chain – Capabilities and opportunities: presents a first map of the UK offshore wind supply chain in the UK and demonstrates the UK’s opportunities for future growth. The report highlights large future opportunities for the UK, not only in turbine supply, but in balance of plant components such as foundations and substations, and in the on-going operations and maintenance activity. (6 February 2014)

DECC: Offshore wind – Key facts: this factsheet covers capacity and pipeline, generation and industrial opportunity. It also has a map showing developments. (19 February 2014)

IEA: Technology roadmaps – How2Guide for wind energy roadmap: this is the first in the IEA's  new series How2Guides that address the need for more focused guidance in the development of national roadmaps, or strategies, for specific low-carbon technologies. It provides a comprehensive overview of potential barriers to wind deployment, as well as possible actions for addressing them – taking into account local conditions, drivers and barriers, including public acceptance issues. (10 March 2014)

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