Energy Eye - December 2015

Publications, legislation, cases and other policy developments in England and Wales relevant to those interested in the energy sector.

15/12/2015

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:

 

 Climate Change  Procurement
 Electricity Market  Renewable Energy
 Energy Policy  Smart Metering
 Environmental Taxes  Wind Power
 Finance   

Climate Change

European Commission: Historic climate deal in Paris – EU leads global efforts: gives details of the historic agreement in Paris, where 195 countries adopted a new universal, legally binding global climate deal. The ambitious and balanced agreement sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to well below 2°C. See also the DECC press release: World agrees historic global climate deal.
The text of the draft Paris Agreement on Climate Change is on the UNFCCC COP21 website. (12 December 2015)

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Electricity Market

DECC: Securing future electricity supply: announces the conclusion of the second Capacity Market auction, securing capacity for 2019/20. The auction attracted enough bidders to secure the capacity needed at a competitive price – 46.354GW at a price of £18/kW. (11 December 2015)

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Emissions

Large Combustion Plants (Transitional National Plan) Regulations 2015 (SI 2015/1973): these regulations form part of the implementation of the recast Industrial Emissions Directive 2010/75 in the UK. Article 32 of the Directive allows Member States to exempt combustion plants which are specified in a Transitional National Plan (TNP) from the requirement to comply with emission limit values for certain pollutants in Article 30(2) during the period from 1 January 2016 to 30 June 2020. The UK's was submitted to the European Commission on 20 October 2015 and these Regulations give effect to the exemptions permitted under Article 32 in relation to the plants specified in it. The regulations come into force on 31 December 2015 and cease to have effect on 31 October 2020. (4 December 2015)

DECC: UK small emitter and hospital opt-out scheme: sets out the policy and process for eligible UK installation operators to apply for exclusion from Phase III (2013-2020) of the EU Emission Trading System under Art.27 of the revised EU ETS Directive 2003/87. (4 December 2015)

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Energy Policy

DECC: New direction for UK energy policy: the Energy and Climate Change Secretary Amber Rudd has set out her vision for an energy system that puts consumers first, delivers more competition, reduces the burden on bill-payers and ensures enough electricity generation to power the nation. These include a consultation in Spring 2016 on proposals to close coal-fired power stations by 2025, and restrict their use from 2023. (18 November 2015)

Policy Exchange: Governing power – Improving the administration of the energy industry in Great Britain: this report highlights the complex network of organisations that govern energy policy, regulations and rules. The paper finds that there are over 30 bodies responsible for the delivery of energy policy, the management of industry codes of practice and the operation of the energy system, with an estimated cost of > £600m a year. It calls on the Government to use the Spending Review as an opportunity to rationalise the energy landscape by having an "bonfire of the energy quangos". It suggests that they are replaced by three bodies: an energy delivery body, an industry codes body and an independent systems operator. (10 November 2015)

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Environmental Taxes

HMRC: Climate Change Levy – Transitional period for removal of renewables exemption: the Finance (No. 2) Act 2015 removed the exemption from the Climate Change Levy for renewable source electricity (RSE) supplied under a renewable source contract if the electricity was generated on or after 1 August 2015. The Summer Budget 2015 announced that there would be a transitional period from this date during which time electricity suppliers could continue to exempt eligible RSE generated before that date. This note explains draft cl.59 of the Finance Bill 2016 that legislates for an end date of the transitional period of 31 March 2018. This means that, providing relevant conditions are met, electricity utilities will be able to continue to apply the exemption until 31 March 2018 when it will cease to exist. (9 December 2015)

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Finance

HM Treasury: Spending Review and Autumn Statement 2015: the Chancellor has published his Spending Review, setting out Government money will be allocated over the next five years. Key points for energy are:

  • DECC's day-to-day spending will fall by 22%;
  • spending on energy research is to be doubled; 
  • the current Energy Company Obligation (ECO) scheme will be replaced from April 2017 with a new cheaper domestic energy efficiency supplier obligation which will run for 5 years;
  • the Government will shortly publish a response to the consultations on changes to the Renewables Obligation and Feed in Tariffs schemes, detailing how to implement cost control on these schemes. If the proposals are implemented, this will save the average household around £6 and the average small business user £500 on their energy bills in 2020-21;
  • extension of the Warm Home Discount to 2020-21 at current levels of £320m a year, rising with inflation; 
  • increase in funding for the Renewable Heat Incentive to £1.15bn by 2020-21, while reforming the scheme to deliver better value for money; 
  • the Government will commit up to 10% of shale gas tax revenues to a Shale Wealth Fund, which could deliver up to £1bn of investment in local communities hosting shale gas developments, in the North of England and other shale-producing regions..

See also the press release: Department of Energy and Climate Change's settlement at the Spending Review 2015. (25 November 2015) 

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Procurement

CCS: Public Contracts Regulations – New subcontracting provisions: the Public Contracts Regulations 2015 provide some additional obligations and flexibilities to enable further transparency and oversight of the working practices of the subcontracting chain, which implement the subcontracting provisions in the new Procurement Directive. There are also new obligations to meet the Government’s policy on prompt payment of invoices. This  guidance explains the new rules on implementing the subcontracting provisions. (9 December 2015)

CCS: Procurement Policy Note 17/15 – Standard EU forms and notices for public procurement: announces that the new standard forms and notices for procurements under the Public Contracts Regulations 2015 have been published in the Official Journal of the EU. Contracting authorities should use the new standard forms and notices for procurements under the Public Contracts Regulations 2015. They should stop using the current forms and notices as soon as the new ones become available on Tenders Electronic Daily (TED) eNotices or via TED e-Senders system. Note that the commencement date of 3 December in the PPN is incorrect - the Commission Implementing Regulation 2015/1986 actually comes into force on 2 December 2015. (2 December 2015)
See our Procurement Alert: New standard form OJEU notices published.

CCS Procurement Policy Note 18/15 – New threshold levels 2016: sets out the new threshold levels to apply for the purposes of the Public Contracts Regulations. The note also contains information relevant to utilities as defined by the Utilities Contracts Regulations. The new threshold levels come into force from 1 January 2016. (9 December 2015)
See also our Revised EU public procurement thresholds summary that sets out the key thresholds for public sector purchasers.

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Renewable Energy

European Commission: Preparation of a new Renewable Energy Directive for the period after 2020: seeks views on the new renewable energy directive (REDII) for the period 2020-2030, foreseen before the end of 2016. The bioenergy sustainability policy, which will form part as well of the new renewable energy package, will be covered by a separate public consultation. The consultation closes on 10 February 2016. (18 November 2015)

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Smart Metering

EIB: British homes to get smart meters under EUR 315 billion Investment Plan for Europe: announces that more than 7m smart meters will be installed in homes across Great Britain under a new £1bn mass roll-out programme backed by the European Investment Bank alongside six commercial banks and Infracapital. The European Investment Bank (EIB) will provide £360m to this initiative that will significantly increase the roll-out of smart meters to reduce energy use and help households save money. The programme is a key part of the scaling up the use of smart meters in Britain, and one of the largest smart meter schemes in Europe to date. The roll-out will be managed by Calvin Capital, a leading funder, owner and manager of gas and electricity meters.  Individual meters will then be used by customers of energy suppliers. (3 December 2015)

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Wind Power

Jones v Mordue [2015] EWCA Civ 1243 (CA): J, a landowner, appealed against the decision to quash the grant of planning permission for the erection of a single wind turbine. M, the chairperson of a local group of objectors, had successfully argued that the turbine would impinge on views of a Grade II* listed church and other listed buildings. The deputy judge had accepted M's submission that the inspector had failed to demonstrate in the reasons he gave that he had complied with his duty under s.66(1) of the Planning (Listed Buildings and Conservation) Act 1990 to have special regard to the desirability of preserving the setting of the church and other listed buildings by giving considerable weight to the desirability of preserving that setting.
The court held, allowing the appeal, that the deputy judge had read too much into the judgment in the East Northamptonshire case.The court in that case had not intended to state an approach to the reasons required to be given by a decision-maker dealing with a case involving application of s.66(1) of the 1990 Act which was at variance from, and more demanding than, that stated in Save Britain's Heritage v Number 1 Poultry Ltd [1991] 1 WLR 153 and South Bucks DC v Porter (No. 2). Applying the correct approach in the present case, as set out in Save Britain's Heritage and South Bucks DC v Porter (No. 2), it could not be said that the reasoning of the inspector gave rise to any substantial doubt as to whether he erred in law. On the contrary, the express references by the Inspector to both Policy EV12 and para.134 of the NPPF were strong indications that he in fact had the relevant legal duty according to s.66(1) in mind and complied with it. The inspector was lawfully entitled to assess that the harm to the setting of the listed buildings was outweighed by the environmental benefits from the turbine. The inspector had clearly considered that there were good reasons to depart from the relevant policies in the development plan, for the reasons he explained. That was an entirely lawful exercise of planning judgment by him. (3 December 2015)

Martin v Secretary of State for Communities and Local Government [2015] EWHC 3435 (Admin) (Admin Ct): M applied for judicial review of the inspector's decision to grant the third defendants planning permission for the erection of a wind turbine on their land in Devon. The site was a kilometre from a listed scheduled ancient monument; there were also listed buildings nearby. English Heritage and Dartmoor NPA  objected on the grounds of the harmful impact on heritage assets. M contended that that the inspector had failed to give proper and adequate reasons for his decision, because he did not grapple with the question of whether he had enough information about heritage assets and the likely effects of the development on their settings and significance.
The court held, refusing the application, that the inspector's reasoning was a full and clear discussion of the issues he had to resolve in deciding whether planning permission ought to be refused on grounds relating to heritage assets. It comfortably met the requirement for intelligible and adequate reasons. (27 November 2015)

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