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:

   Combined Heat and Power    Green Deal
   Community Energy    Health and Safety
   Contracts for Difference    Procurement
   Electricity Market Reform    Renewable Energy
   Emissions    Renewable Heat
   Energy Efficiency    Shale Gas
   Energy Supply    Smart Metering
   Enforcement    Solar Energy

Combined Heat and Power

DECC: Call for evidence – Tackling non-financial barriers to gas CHP: DECC projects that operation of gas CHP will continue to deliver carbon savings until the early 2030s. Its analysis suggests that gas CHP will become increasingly cost-effective under current policies between now and 2020, driven largely by changes in energy prices. However, research suggests that there are a number of non-financial barriers which might reduce or prevent deployment. This paper seeks evidence on barriers to deployment of gas CHP and on the effectiveness of a range of potential measures to address those barriers. The consultation closes on 30 March 2015. (9 February 2015)

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Community Energy

DECC: Win a share of £100k and cut your energy bills: invites community groups and other eligible organisations across England to apply for funding to develop innovative energy-saving ideas that could help slash energy bills. The competition is open to all community groups that are registered as legal entities. The successful applications will be able to demonstrate the biggest potential drop in energy consumption and bills. The closing date for applications is10 February 2015. (26 January 2015)

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Contracts for Difference

DECC: Non-delivery disincentive for contracts for difference: the Non-Delivery Disincentive sets out certain penalties where an applicant fails to sign a Contract for Difference (CFD) if offered one or fails to deliver. The policy is intended to incentivise applicants who have been successful in the allocation process to sign the CFD offered to them and to minimise the risk that those who enter into a CFD fail to deliver the project. This policy paper provides clarity to applicants to the CFD on how the penalties will apply in advance of the sealed bid submission window opening on 29 January 2015.  (28 January 2015)

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Electricity Market Reform

DECC: Electricity Market Reform – Capacity Market supplementary design proposals and transitional arrangements and proposed amendments to the Capacity Market Rules 2014 and explanation of some immediate amendments to the Capacity Market Rules 2014: sets out the Government's response to two 2014 consultations. The changes are set out in the draft Electricity Capacity (Amendment) Regulations 2015 which are expected to come into force in March 2015. The regulations amend SI 2014/2043 to enable electricity interconnectors to participate in the Capacity Market from 2015 onwards, and make a number of minor and technical amendments; they also amend SI 2014/3354 to set the settlement costs levy that funds the budget of the Capacity Market Settlement Body, as from 1 April 2015, and to correct a minor drafting error. (19 January 2015) 

DECC: Electricity Market reform – Consultation on Low Carbon Contracts Company’s and Electricity Settlements Company’s operational costs 2015/16: sets out the Government's response to the November 2014 consultation on the proposed 2015/16 operational cost budgets and resulting levies for the Low Carbon Contracts Company (LCCC) and the Electricity Settlements Company (ESC). These two Government-owned companies, which became operational on 1 August 2014, manage key mechanisms for implementing Electricity Market Reform. The LCCC manages and makes payments under Contracts for Difference to incentivise investment in low carbon technologies. The ESC is responsible for payment flows under the Capacity Market, including making capacity payments to capacity providers, controlling collateral and managing auction bid bonds. The operational costs of the companies are recovered through levies on electricity suppliers, as set out in legislation. Following the outcome of the consultation, the operational cost levy rates for 2015/16 will be set out in secondary legislation, which is intended to come into force by 1 April 2015. (19 January 2015)

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Emissions

DECC: Implementing the Emissions Performance Standard – Further interpretation and monitoring and enforcement arrangements in England and Wales: sets out the Government's response to the September 2014 consultation on proposals for the regulatory framework supporting introduction of the Emissions Performance Standard (EPS), which limits CO2 emissions from new fossil fuel power stations. The majority of the respondents broadly agreed proposals for EPS regulations and the Government therefore intends to proceed with the making of regulations on the basis set out in the consultation. (14 January 2015) 

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Energy Efficiency

DECC: Energy Performance Contract – Contract guidance note & model contract: this model contract is designed to assist public sector organisations retrofit their buildings by installing energy conservation measures to reduce carbon emissions and achieve substantial guaranteed annual cost savings. It has been developed from the GLA's RE:FIT EPC programme. The improvements are installed by Energy Service Companies that design and implement the energy conservation measures and guarantee the energy savings. The accompanying contract guidance notes provide organisations with help on understanding the structure and specific areas of the contract.
There is also a Guide to Energy Performance Contracting best practices that has been designed to help users identify points for consideration when using the contract, and is based on experience from similar successful projects.
(15 January 2015)

DECC: A guide to financing energy efficiency in the public sector: this updated guide outlines some of the ways by which public sector budget holders can secure funding for energy efficiency measures. The guide is intended to help public sector organisations better understand the benefits of energy efficiency, and help them to overcome the barrier that access to finance can sometimes present. (15 January 2015)

Draft Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015: these draft regulations, once in force, enable the tenant of a domestic private rented (PR) property to request their landlord’s consent to the tenant making energy efficiency improvements to the property, and place a duty on the landlord, and any superior landlord, not to unreasonably refuse consent to the improvements being made, with exemptions as to when such consent will not be considered to be unreasonably withheld. They also prescribe a minimum level of energy efficiency for domestic PR properties and non-domestic PR properties and provide that, subject to exemptions, a landlord may not: grant a new tenancy or renew an existing tenancy of a PR property after 1 April 2018, continue to let a domestic PR property after 1 April 2020 or continue to let a non-domestic PR property after 1 April 2023, where its energy performance falls below the minimum level of energy efficiency. They come into force on 1 April 2016, apart from Part 3 (minimum standards) which comes into force on 1 October 2016.
See also the draft Energy Efficiency (Domestic Private Rented Property) Order 2015 that prescribes additional tenancy types, so that properties let on those tenancies types are domestic PR properties for the purposes of these regulations. (5 February 2015) 

Carbon Trust: Guide to the Energy Savings Opportunity Scheme: the ESOS Regulations 2014 (SI 2014/1643) bring into force Art.8 of the EU Energy Efficiency Directive 2012/27, requiring all large businesses in the UK to undertake comprehensive assessments of energy use and energy efficiency opportunities at least once every four years. The deadline for the first compliance period is 5 December 2015, by which time qualifying businesses will have to achieve compliance with the regulations and notify the Environment Agency. This guide explains what’s required to comply and how buisnesses can take advantage of the real opportunities in ESOS. (22 January 2015)

Ofgem: Warm Home Discount guidance (WHD) for licensed electricity suppliers and licensed gas suppliers [version 4] – Draft for comment: seeks views on revised guidance. The proposed changes provide clarity on the administration of the WHD scheme in light of Ofgem's and suppliers' experience of the scheme so far. It also reflects changes brought in by the Warm Home Discount (Miscellaneous Amendments) Regulations 2015. The consultation closes on 23 February 2015. (26 January 2015)

Draft Warm Home Discount (Miscellaneous Amendments) Regulations 2015: these draft regulations, once in force, amend SI 2011/1033 to extend the operation of the Warm Home scheme for a further year, until 31 March 2016, and make some minor amendments to the operation of the scheme. They also make minor consequential amendments to the related Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011 (SI 2011/1830). (14 January 2015)

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Energy Supply

DECC: Electricity Demand Reduction pilot scheme – Participant agreement terms and conditions: this agreement commits a participant in the pilot scheme to a number of obligations, including installing and reporting Operational Verification for the measures they bid into the auction, measuring and reporting the capacity savings delivered and participating in the evaluation of the EDR Pilot. In exchange for full compliance, DECC will pay participants their winning bid price multiplied by the average capacity savings committed to in their successful application. More details are in the Participant Handbook. (6 February 2015)

DECC: Organisations benefit from UK’s first ever auction to reduce demand on electricity: announces the results of the Electricity Demand Pilot auction, the UK’s first ever auction to reduce demand for electricity at peak times. (4 February 2015)

DECC: Electricity Supply Emergency Code (revised January 2015): updated electricity supply emergency code that outlines the process for ensuring fair distribution nationally while still protecting those who require special treatment, where a prolonged electricity shortage affects a specific region, or the whole country. (20 January 2015)

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Enforcement

Draft Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015: these draft regulations create new criminal offences of wholesale energy market manipulation and insider dealing in wholesale energy market products, behaviour which is prohibited under the EU Regulation 1227/2011 on wholesale energy market integrity and transparency (REMIT). They give Ofgem new powers to prosecute people suspected of abusing the wholesale electricity and gas markets. For the purposes of these regulations, relevant products are wholesale gas and electricity products that meet the definition set out in REMIT. The behaviours captured are certain cases of insider dealing and market manipulation in relation to those products, where there is an appropriate link to the UK. These new offences supplement the existing civil enforcement regime for breaches of REMIT. The availability of criminal sanctions to address serious breaches of wholesale energy market rules is intended to ensure there is a suitably dissuasive and proportionate regime to deter and address wholesale energy market abuse. the Regulations are expected to come into force in April 2015. (22 January 2015)

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Green Deal

Ofgem: Green Deal Arrangements Agreement (GDAA) change proposal (CP) 0069 – Late payment of GDAA invoices: announces proposals to introduce a process into the GDAA that details the consequences of late payment of a GDAA invoice. Under the proposal, if a GDAA party does not pay the amount due within 20 working days of invoice, the GDAA Panel would be able to charge interest on the overdue payment together with an administration charge. This administration charge is proposed to be set by the GDAA Panel and notified to GDAA parties from time-to-time. This interest will be calculable from day-to-day at a rate per annum equal to 3% above base lending rate. (19 January 2015)

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Health and Safety

RenewableUK: Onshore wind health and safety guidelines: these guidelines aim to consider occupational health and safety risks in relation to onshore wind energy projects subject to the jurisdiction and scope of the Health and Safety at Work etc Act 1974 covering England, Scotland and Wales, and the Health and Safety at Work (Northern Ireland) Order 1978 in Northern Ireland. They acknowledge a collective responsibility for health and safety in the industry, and so support a strategic objective to enhance the overall health and safety performance of the sector. Part A sets the context for health and safety management in wind farm development, Part B sets out a generic lifecycle framework in order to identify, assess and manage the main health and safety hazards and risks that could reasonably arise in wind farm development, and Part C considers the most significant health and safety hazards and activities relevant to onshore wind projects. There is also a list of references and a glossary of terms and abbreviations. (3 February 2015)

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Procurement

Public Contracts Regulations 2015 (SI 2015/102): these regulations, which mainly come into force on 26 February 2015, implement the Public Procurement Directive 2014/24 in England, Wales and Northern Ireland, which provides modernised rules for the procurement of goods, services and works above certain thresholds by public authorities. The regulations also re-enact the relevant provisions of the Remedies Directives 89/665 (as amended) on remedies and review procedures for public procurement. They revoke and replace SI 2006/5. (5 February 2015)
For a detailed summary of the regulations see Bevan Brittan's Byte size procurement update 15: Public Contracts Regulations 2015 published.

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Renewable Energy

DECC: Electricity intensive industries – Relief from the indirect costs of renewables: sets out the Government's response to the July 2014 consultation on the eligibility and design features of a proposed scheme for providing relief for electricity intensive industries for the indirect costs of renewables policy. This document sets out the issues raised by stakeholders through the consultation and the Government’s response. Further detailed guidance will be issued later in the year, once DECC receives the necessary approvals including state aid approval from the European Commission. (19 January 2015)

Ofgem: Feed-in Tariff – Central FIT Register (CFR) user guide: Part 7, Switching FIT installations on the CFR: updated guidance to assist Licensed Electricity Suppliers to access and interact with the Central FIT Register (CFR), an electronic, web-based system used to manage the FIT scheme that Ofgem administers on behalf of DECC. This part covers: how the process of switching FIT installations takes place between two FIT Licensees in the CFR; and how to request, agree and confirm a switch. (21 January 2015)

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Renewable Heat

DECC: Renewable Heat Incentive call for evidence – Increasing the flexibility of financing options in the Domestic and Non-Domestic RHI: seeks information and evidence to inform the development of policy to amend regulations to allow additional financing options into the domestic RHI. The precise nature of the policy will depend on the nature of the responses received to this call for evidence. There are also a small number of questions on the non-domestic RHI, seeking initial views on whether there is a case for making any similar changes to the non-domestic scheme, prior to a formal consultation. The closing date for comments is 15 March 2015. (28 January 2015)

DECC: Evaluation of the Renewable Heat Premium Payment Scheme Phase Two: summarises the findings from an evaluation of Phase Two of the Renewable Heat Premium Payment Scheme (RHPP), conducted by ICF Consulting. The RHPP was a scheme that provided a grant towards the capital cost of installing renewable heating technologies in domestic properties. It was funded by DECC and administered by the Energy Savings Trust. Phase Two operated from April 2012 to March 2013. The evaluation examines the extent to which the Scheme met its objectives and the lessons that can be learnt to inform further development of the RHI. (28 January 2015)

Renewable Heat Incentive Scheme and Domestic Renewable Heat Incentive Scheme (Amendment) Regulations 2015 (SI 2015/145): these regulations, which come into force on 5 February 2015, amend the RHI Regulations 2011 ( SI 2011/2860) and the Domestic RHI Regulations 2014 (SI 2014/928), in order to introduce new sustainability requirements for both domestic and non-domestic schemes for participants who are using biomass, biogas or biomethane. (4 February 2015)
For a summary, see Ofgem's factsheet Non-domestic RHI regulations (February 2015) – proposed changes: Revised biomethane tariff and minor amendments.

Domestic Renewable Heat Incentive Scheme (Amendment) Regulations 2015 (SI 2015/143): these regulations, which come into force on 5 February 2015, amend SI 2014/928 in order to improve the Domestic RHI scheme established by those regulations and to make minor changes and clarifications to ensure that the regulations deliver the original policy intent. Under the scheme, owners of biomass plants, heat pumps and solar thermal plants which generate heat for domestic properties may receive payments at prescribed rates when the plant generates heat for that property. For full details of the changes, see the Explanatory Memorandum. (4 February 2015)

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Shale Gas

DECC: Shale developments to be banned in all UK national parks: announces the Government's commitment to formalise the safeguards on the development of the shale industry in the UK, including a new ban on fracking in National Parks, Areas of Outstanding Natural Beauty and Sites of Special Scientific Interest. (27 January 2015)

FoE: Making a better job of it – Why renewables and energy efficiency are better for jobs than fracking: this briefing critically examines the argument that fracking will create many thousands of well-paid jobs for local people. (19 January 2015)

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Smart Metering

DECC: Smart Metering Impentation Programme – January 2015 government response to parts of the previous consultations on: 1) Stage 4 Smart Energy Code (SEC) (June 2014) and 2) Additional SEC Content consulted on as part of the SEC 4 Part A Response:  provides the Government's response to specific areas of the June and November 2014 consultations. It provides the final policy position and associated legal text on: Test Certificates; User IDs, DCC IDs and Party IDs; and Compliance Policy Independence Arrangements (CPIA). These are areas for which an actual or possible early requirement has been identified. Conclusions on the remaining SEC 4 and 4A content will follow in due course. (November 2014)

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Solar Energy

Ofgem: Consultation on guidance – Renewables Obligation (RO): closure of the scheme to large-scale solar PV: seeks views on draft guidance explaining how Ofgem proposes to administer the upcoming closure of the Renewables Obligation schemes to large-scale (>5MW) solar PV from 1 April 2015, as provided for under the draft Renewables Obligation Closure (Amendment) Order 2015. The consultation closes on 25 March 2015. (28 January 2015)

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