Energy Eye - May 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.

12/05/2014

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:

   Bio-fuels    Procurement
   Electricity Market Reform    Renewable Energy
   Energy Efficiency    Shale Gas
   Energy Supply    Smart Meters
   Heat Networks    Solar Energy

Bio-fuels

DECC: Small businesses given boost to generate bioenergy from wetlands: announces that three British companies (AMW IBERS, Natural Synergies and AB Systems) have been awarded a share of over £1.3m to spur on innovation in turning reeds and rushes from wetlands into bio-energy. (17 April 2014)

HMRC: Biofuels and other fuel substitutes (Notice 179E): this notice gives details of the various biofuels and their excise duty rates. It also explains the roles and responsibilities of producers (and in some cases, users) of these products. It cancels and replaces the August 2011 version. (1 April 2014)

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Electricity Market Reform

DECC: Implementing Contracts for Difference – Policy and drafting update: explains the development of, and the Government's policy approach to, the latest version of the Contract for Difference (CfD), which represents the terms that will be offered by the CfD Counterparty Company Ltd to Generators following successful allocation for CfD projects. The CfD now includes additional provisions that seek to ensure it is flexible, investable and remains robust throughout its life. DECC will continue to work with industry and interested parties on the development of the outstanding areas of the CfD. The revised contract, standard terms and conditions, draft Allocation Framework and other related documents are on the DECC website. (23 April 2014)

Ofgem: The change process for the Capacity Market Rules guidance: seeks views on draft guidance which explains how Ofgem expects to manage the Capacity Market Rules change process. The consultation closes on 22 May 2014. (17 April 2014)

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Energy Efficiency

DECC: The UK’s National Energy Efficiency Action Plan and Building Renovation Strategy: this NEEAP sets out how the UK Government will comply with the Energy Efficiency Directive 2012/27 and explains how the implementation of the Directive will help the UK to realise this potential, building on the UK’s leadership on energy efficiency. The Government has also published its Building Renovation Strategy, which sets out the UK’s portfolio of policies that stimulate investment in energy efficiency building renovation, supported by an overview of the UK’s national building stock to help understand the opportunities for further cost-effective renovation. (30 April 2014)

DECC: £7600 to make your home more energy efficient: announces that from June 2014, householders will be able to get up to £7,600 back through a new Green Deal Home Improvement Fund (GDHIF) , enabling them to install a range of energy efficiency measures by providing them with money back on the contributions they make towards improvements. The GDHIF is designed to work alongside Green Deal finance; householders may consider the Green Deal finance option to help fund some of the cost of the installation, but they will not be required to do so in order to qualify for the GDHIF. Only Green Deal authorised installers and providers may register to deliver the scheme. There is also a Guide to the Green Deal Home Improvement Fund and FAQs. (1 May 2014)

Ofgem: Energy Companies Obligation (ECO) – Guidance for suppliers (Version 1.1a): guidance to suppliers on the requirements of ECO in accordance with legislation and Ofgem's administrative processes. This version takes account of recent changes to the Order and replaces all previous versions. Ofgem will apply the processes and policies described in this guidance to all notifications and applications received from suppliers on and after 1 May 2014. (1 May 2014)

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Energy Supply

DECC: Energy switching times to halve by end of year: the Energy Secretary has announced that energy companies have confirmed that they are committed to reducing the time it takes to switch energy supplier from 5 weeks to 2.5 weeks by the end of 2014. The Government's long term aim is to get to 24 hour switching, supported by the roll out of 53m smart meters by the end of this decade. Ofgem will consult in May 2014 on the most effective and quickest ways to introduce next day switching. (21 April 2014)

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Heat Networks

DECC: Heat Networks Delivery Unit – Funding application: announces that Funding Round 3 is now open. The deadline for applications is 27 June 2014. The HNDU can provide up to a maximum of 67% of eligible project costs to local authorities for the development stages of heat network projects. (12 May 2014)

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Permitting and Licensing

DEFRA: Consultation on the applicability of integrated pollution prevention and control to onshore oil exploration activities: seeks views on proposals to clarify that the Environmental Permitting Regulations Part A(1)(h) does not apply to oil exploration activities on land because these activities are already effectively regulated by other regimes which protect the environment. Appendix 1 sets out the potential environmental impacts: it considers that such exploratory activities are of limited duration and the volume of oil extracted is low relative to that extracted during the production life of the well and so the regulatory burden associated with obtaining a Part A(1) permit under the EPR is disproportionate to the environmental risk. Moreover, there are other regulatory controls on oil exploration which provide protection for the environment as set out in Appendix 2. The consultation closes on 2 June 2014. (7 April 2014) 

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Procurement

Bevan Brittan byte size procurement updates: we have published the first three of our "byte size" legal updates, 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. The first three cover:

  1. Pre-procurement issues
  2. Statutory time limits under the Public Sector Directive 2014/24/EU – Open and Restricted Procedures
  3. Statutory time limits under the Public Sector Directive 2014/24/EU Part 2 – Competitive Dialogue Procedure and Competitive Procedure with Negotiation.

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Renewable Energy

Renewable Energy Association: REview – Renewable Energy View: 2014: this review gives an assessment of the UK renewable energy market, highlighting the close relationship between clear, stable policies and sustained growth and jobs in the renewable energy industry. It also features commentary pieces and case studies from across the renewable energy industry to give an impression of what it is like doing business in this sector of the UK’s growing green economy. Contributors range from renewable energy specialists to major organisations integrating renewables into their business operations, such as Siemens Financial Services and Tesco. (30 April 2014) 

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Shale Gas

Ernst & Young: Getting ready for UK shale gas – Supply chain and skills requirements and opportunities: this report details the supply chain and skills needed to develop shale gas reserves in the UK. The study was commissioned by UKOOG to identify any supply chain or skills blockages that will prevent the UK realising shale gas’s economic potential. It considers: what it will take to build a shale gas pad in the UK in terms of supply chain and skills; the UK's capabilities to do so; and what would be needed in order to fill the gaps and to stimulate the supply chain and skills the UK already has. (24 April 2014)

DECC: The Government’s response to the MacKay-Stone report – Potential greenhouse gas emissions associated with shale gas extraction and use: this is the formal response to the report by Professor David Mackay and Dr Timothy Stone that assessed the potential greenhouse gas emissions from production of shale gas in the UK . It states that the Government has accepted all the recommendations in the report and gives the Government's commitment to: 

  • pursue a detailed scientific research programme to monitor emissions relating to shale gas exploration and production, to increase the evidence base and inform regulatory monitoring;
  • require shale firms to use the best technologies available to capture emissions from operations; and
  • research with industry new techniques to minimise GHG emissions, water demand and vehicle movements.

 DECC has also announced a £2m competition by the Technology Strategy Board to support innovative ideas to produce or explore for shale gas, particularly focused on projects reducing environmental impact. (24 April 2014)

DECC: Guidance on the preparation of an environmental risk assessment of shale gas operations in Great Britain involving the use of hydraulic fracturing: guidance for operators who are required to carry out an initial or early-stage environmental risk assessment for shale gas operations, including fracking. it sets out reasonable expectations for such an assessment. (24 April 2014)

HL Economic Affairs Committee: The economic impact on UK energy policy of shale gas and oil: this report calls on the Government to do more to bring forward development of the UK’s shale gas and oil resource and ensure that the UK enjoys the substantial benefits shale gas can bring to the economy, to national energy security and to the environment. The Committee is disappointed that the exploratory drilling with hydraulic fracturing needed for shale gas development has hardly begun. It found that since the lifting of a moratorium on hydraulic fracturing in 2012, the Environment Agency has not received or approved a single application for the permits necessary for exploratory drilling. The report calls for a simplified and clear regulatory regime to encourage development of shale and reassure communities that risks of harm to the environment or human health are low. The Committee expresses concern that complex regulation may be causing unnecessary delays. It cncludes that the Government should make a sustained and concerted effort to get shale development moving within a robust and responsive regulatory framework, which needs to be directed from the top. (8 May 2014) 

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Smart Meters

Ofgem: Monitoring suppliers’ smart meter roll-out activities: seeks views on the initial data that Ofgem proposes to collect from suppliers on their roll-out activities. It also sets out its high-level plan for obtaining data from suppliers and the intention to issue a joint response to this open letter and the consultation on supplier reporting of smart meter roll-out plans. The consultation closes on 20 June 2014. (25 April 2014)

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Solar Energy

Solar Trade Association: BRE National Solar Centre biodiversity guidance for solar developments: expert guidance for planners, ecologists, developers, clients and landowners on how to optimise biodiversity on solar farms. It urges solar farms to be considered in the context of existing designated habitats and corridors to help improve the overall network of spaces for wildlife. The guide outlines the options for maximising this potential and explains a very wide range of habitat enhancements, from beetle banks to winter food planting for birds. (28 April 2014)

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