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 Reduction     Feed in Tariff
   Consumer Protection    Funding
   Electricity Market Reform    Heat Networks
   Emissions    Renewable Heat Incentive
   Energy Company Obligation    Renewables Obligation
   Energy Efficiency    Shale Gas
   Energy Supply    Wind Energy

Carbon Reduction

Committee on Climate Change: Clarifying the direction for low-carbon policy: this letter from the chair of the advisory Committee on Climate Change to the Energy Secretary Amber Rudd asks for clarification on a series of announcements about existing low-carbon policies that have been widely interpreted to have reduced the action being taken to meet the clear commitment to carbon budgets. As a package, they have raised questions over the future direction of low-carbon policies. (22 September 2015)

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Consumer Protection

DECC: Bonfield review terms of reference: DECC and DVLG have commissioned Dr Peter Bonfield to chair an Independent Review of Consumer Advice, Protection, Standards and Enforcement for UK home energy efficiency and renewable energy measures. Whilst the majority of installations are successful, there are a number of cases where consumers are dissatisfied. This review will draw together evidence in relation to weaknesses in the existing framework of standards and propose how it can be made more robust for consumers, while encouraging investment and promoting innovation. The review is expected to report by March 2016. These documents give details of Dr Bonfield's appointment and the review's terms of reference. (5 October 2015)

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Electricity Market Reform

DECC: Electricity Market Reform (EMR) annual update 2015: sets out the progress that the Government has made over the past year in implementing EMR under Part 2 of the Energy Act 2013. (15 October 2015)

DECC: EMR and FID Enabling for Renewables Evaluations – Government Response: sets out DECC's response to two independent evaluations by external consultants Grant Thornton and Poyry, covering the FID Enabling for Renewables process and the first rounds of delivery of the Contract for Difference and Capacity Mechanism interventions. These evaluations represent an independent view on the outcomes and learning from the early stages of implementation of these mechanisms. The evaluation reports are also linked from this page. (15 October 2015)

DECC: Capacity Market parameters: summarises the current process for setting Capacity Market parameters and sets out the evidence which informs these parameters. (15 October 2015)

DECC: Consultation on reforms to the Capacity Market: seeks views on a number of changes to the electricity Capacity Market. The most significant of these will ensure that new-build generating plant which win agreements in the CM auction face the right incentives and penalties to ensure that they deliver fully and according to their agreements. This is intended to ensure that the mechanism operates as intended to maintain high levels of security of supply. Other changes are simplifications or minor, incremental improvements to the process, reflecting stakeholder suggestions and formal evaluation following the first auction last year. The consultation closes on 10 December 2015. (15 October 2015)

DECC: CFD Supplier Obligation – Consultation on improving efficiency & transparency: seeks views on changes to the contracts for difference (CFD) Supplier Obligation. The amendments aim to lower the costs of CFDs that are passed onto consumers by improving the efficiency of the CFD Supplier Obligation design, improving the transparency around CFD costs, and making minor and technical amendments that clarify provisions in the regulations. There are also draft regulations showing the amendments. The consultation closes on 23 October 2015. (14 September 2015)

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Emissions

DEFRA: Draft Large Combustion Plants (Transitional National Plan) Regulations 2015: seeks views on draft regulations that will implement and regulate the Transitional National Plan for large combustion plants (LCPs) from 1 January 2016 to 30 June 2020. Under the Industrial Emissions Directive, certain LCPs can have an additional four and a half years in which to make the necessary investments in emissions abatement technology to achieve compliance with the stringent IED emission limits for three key pollutants (nitrogen dioxides, sulphur dioxide, and dust) through the operation of a TNP. The consultation closes on 26 October 2015. (14 September 2015)

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Energy Company Obligation (ECO)

Ofgem: Pathways to Compliance: Requirements for monitoring: outlines Ofgem's approach to dealing with poor performance for both technical and score monitoring of measures installed under ECO, i.e. where the monitoring requirement is not met or failure rates are unsatisfactory. It explains when Ofgem expects to act, and what suppliers need to do to avoid approval of measures being rejected or revoked. The pathways build on the core principles as detailed in the guidance. (12 October 2015)

Ofgem: Energy Company Obligation (ECO2) – Measures table: provides information on eligible energy efficiency measures which suppliers can use to meet their ECO2 obligations. Under ECO2, a wide range of energy efficiency measures can be installed. This page includes a non-exhaustive list of the information that energy companies need to include when they notify these measures. (1 October 2015)

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Energy Efficiency

HM Treasury: Reforming the business energy efficiency tax landscape: seeks views on policy proposals to simplify and improve the effectiveness of the landscape in supporting the Government’s objectives around simplicity, productivity, security of energy supplies and decarbonisation. The consultation closes on 9 November 2015. (28 September 2015)

Ofgem: Energy Company Obligation (ECO2) measures table: provides information on eligible energy efficiency measures which suppliers can use to meet their ECO2 obligations. (1 October 2015)

Association for Decentralised Energy: Less waste, more growth – Boosting energy productivity: this report looks at ways to improve the UK's energy productivity. It finds that there is an immense opportunity to improve energy productivity, cutting energy bills, creating jobs and building a stronger economy. Currently 54% of the energy used to produce electricity is lost by the time it arrives at a UK home or business, where further losses occur. This lost energy is worth £9.5bn a year, the equivalent of £354 per household, more than half the average home’s annual electricity bill. While not all energy waste can be stopped, there are immediate, practical, cost-effective steps which could save over £3bn a year. (1 October 2015)

ResPublica: After the Green Deal – Empowering people and places to improve their homes: this report from policy think tank ResPublica outlines a series of changes to re-energise the energy efficiency market, by engaging consumers, driving demand and effectively enabling people to improve their homes. It calls for number of revenue streams to be devolved to city regions, including stamp duty, land tax, revenue generated from low carbon taxes and levies and infrastructure funds. (23 September 2015)

The Climate Group: The Big Switch – Why it's time to scale up to LED lighting: this briefing is the first in a series which analyses the key non-technical barriers to the wide-scale adoption of LED street lighting and how these barriers can be addressed. The report reveals that major cities around the world want to upgrade to LED and that technological barriers for switching to LED have now been overcome. But in the run-up to COP21, cities want more support from government and financial institutions to refine business models and financing options to help make the switch. (24 September 2015)

Association for Decentralised Energy: Less waste, more growth – Boosting energy productivity: this analysis from a coalition of 14 organisations, led by the ADE, shows how the UK electricity system wastes £9.5bn from the loss of energy before it reaches homes and businesses.  The report calls for an increase in government ambition on energy productivity and sets out three recommendations that could transform this wasteful inefficiency into a huge growth opportunity for the UK economy. (1 October 2015)

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Energy Supply

DECC: Tackling poor customer service in the energy sector: announces new measures to investigate and tackle poor customer service from energy companies. The Government will work with Ofgem and Citizens Advice to strengthen the Energy Ombudsman’s role in identifying and addressing systemic industry-wide problems where customers are being treated badly by energy suppliers. The most common of these are failing to respond to customer complaints and delays in repaying overestimated bills. (5 October 2015)

DECC: Bill payers missing out on £2.2bn: reports that new figures estimate that 11m households stand to save £200 or more by switching their gas and electricity supplier. (9 October 2015)

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Feed in Tariff

Feed-in Tariffs (Amendment) (No.2) Order 2015 (SI 2015/1659): this Order, which comes into force on 30 September 2015, removes the ability of a prospective generator to apply for preliminary accreditation of an installation for FITs before the installation is commissioned by inserting a cut-off date of 30 September 2015 into art.9 of SI 2012/2782. It also inserts the same cut-off date into art.11 so that the eligibility date and the tariff date become the same date for installations preregistering after this cut-off date. The effect of these changes is that installations are no longer able to pre-accredit or pre-register onto a particular tariff before they are completed and ready to generate. (9 September 2015)

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Funding

HC Environmental Audit Committee: Future of the Green Investment Bank inquiry: the Committee has launched an inquiry into Government's decision to part-privatise the Green Investment Bank. The GIB launched in November 2012 as a fully government-owned institution with the aim of unlocking private investment in low-carbon and green sectors. In June 2015, the Secretary of State announced that GIB would be moved into private ownership, arguing that this would allow it to operate in a wider range of green sectors and to finance more projects. The Committee is inviting written submissions on this proposed privatisation. The closing date for comments is 15 November 2015. (15 October 2015)

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Heat Networks

DECC: Heat Networks Delivery Unit – HNDU Round 5: Overview: announces that the fifth Heat Networks Delivery Unit (HNDU) funding round is now open. The funding round is open to those local authorities in England and Wales who are seeking funding to undertake feasibility studies. This means that quality heat mapping and energy masterplanning must be completed in order for heat networks projects to be eligible for funding. The round closes on 1 November 2015. (6 October 2015) 

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Renewable Heat Incentive (RHI)

Ofgem: Non-domestic RHI guidance – Volume 1: Eligibility and how to apply: revised guidance on the Renewable Heat Incentive scheme that takes into account amendments to the scheme under the RHI (Amendment) Regulations 2015 which came into force on 5 October 2015. This volume sets out the eligibility requirements of the RHI and how applicants can become accredited or registered. See also Volume 2, which includes the ongoing requirements for RHI participants, information on how periodic support payments are calculated and paid, and our compliance and enforcement powers.
There is also an Easy guide to the Non Domestic RHI that provides an overview of the non-domestic RHI scheme, who it is for and how it works. (5 October 2015)

DECC: Domestic Renewable Heat Incentive (RHI) factsheet – Degression mechanism: explains how DECC will control expenditure for the domestic RHI through a process called degression, which works by gradually lowering the tariffs that are paid to new applicants as more renewable heating systems are installed. (30 September 2015)  

Ofgem: The Domestic RHI and understanding renewable heating offers: this factsheet sets out a basic overview of how third party finance and ownership arrangements fit with the Domestic Renewable Heat Incentive. It is aimed at homeowners looking into alternative funding offered by companies for the installation of renewable heating. (6 October 2015)

Ofgem: Domestic RHI – Third party finance and ownership arrangements: this factsheet sets out a basic overview of how third party finance and ownership arrangements fit in the Domestic Renewable Heat Incentive. It is for organisations such as companies or community groups that are planning to offer these funding packages to homeowners for the installation of renewable heating technologies. (1 October 2015)

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Renewables Obligation

DECC: Best deal for bill payers and investors as subsidies for onshore wind end: announces that the Government is to proceed with its commitment to end public subsidies for onshore wind farms, by closing the Renewables Obligation across Great Britain from 1 April 2016. It has tabled amendments to the Energy Bill that set out the grace period criteria. Projects that are eligible for the grace period will need to demonstrate that: 

  • they had planning consent as at 18 June; 
  • they have successfully appealed a planning refusal made on or before 18 June; or 
  • they have successfully appealed after not receiving a planning decision due by 18 June.

They will also need to show that they had a grid connection and land rights in place. Projects that have met all these criteria and can demonstrate that they have struggled to secure finance from lenders since 18 June will be allowed extra time but no longer than nine months.
Details are in the policy paper on Information on the proposed RO grace period for new onshore wind and the information paper on Government amendments to the Energy Bill 2015: Onshore wind and (8 October 2015)

DECC: Applying for a place within the 400MW cap on new build dedicated biomass projects (Renewables Obligation): the Government has introduced a cap of 400MW on the total new build dedicated biomass capacity in England and Wales that can expect grandfathered support under the RO. Once the 400MW cap is triggered, DECC will consider excluding any further new build dedicated biomass deployment from this grandfathering policy. This updated guidance sets out how to apply for a place within the cap. (28 September 2015)

Ofgem: Draft Renewables Obligation – Guidance for generators: seeks views on draft updated guidance for generators that receive or would like to receive support under the Renewables Obligation (RO) scheme in England, Wales, Scotland and Northern Ireland. It gives an overview of the support levels available, the types of generating technologies that might be eligible for the scheme and how eligible generators become accredited. It also sets out the information that Ofgem requires from generators to issue Renewables Obligation Certificates (ROCs) and explains how and when it issues ROCs. The consultation closes on 3 November 2015. (22 September 2015)

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Shale Gas

Task Force on Shale Gas: Assessing the impact of shale gas on climate change: the Task Force's third report looks at how the development of a shale gas industry in the UK would affect the UK's overall climate impact. Its overarching finding is that shale gas has a role to play as an interim baseload energy source in the UK energy mix over the medium term. Gas will be needed for several decades, for energy, electricity, heating, and industry; but it must not prohibit or slow the development of an effective renewables and low carbon energy industry. To ensure the longer-term adoption of renewables and low carbon energy, the Task Force is calling on Government to expedite the development of Carbon Capture and Storage, and measures should be taken to ring-fence Government energy revenue streams for investment in R&D and innovation in renewables and low carbon energy generation, storage and distribution. (16 September 2015)

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Wind Energy

DECC: Planning decision for Navitus Bay offshore wind park: announces that the Government has refused development consent for the proposed Navitus Bay offshore wind park off the Dorset and Isle of Wight coasts. (11 September 2015)

RenewableUK: State of the industry report 2014 – Wind energy in the UK: summarises the achievements of the wind energy sector over the last 12 months, set against a backdrop of policy uncertainty. The report argues that the wind sector has and continues to face a series of challenges, but it remains confident of its ability to deliver low carbon energy at best value to UK consumers, within a timescale that works for the country, while also delivering wider economic benefit. 
There are also factsheets on onshore wind and offshore wind. (6 October 2015)

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