Energy Eye – September 2015

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.

10/09/2015

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:

   Carbon Capture and Storage    Feed in Tariff
   District Heat Networks    Procurement
   Energy Efficiency    Renewables
   Energy Policy    Shale Oil and Gas
   Environmental Taxes    Wind Energy

Carbon Capture and Storage

DECC: Carbon Capture and Storage knowledge sharing – Commercial, project management and lessons learned: Health, safety and environmental report: describes how Shell demonstrate the systematic management of health, safety and environmental risks specific to the Peterhead Carbon Capture & Storage Project through compliance with internal Health, Safety, Security, Environmental and Social Performance Management System procedures. It forms part of the Government's commitment to sharing the knowledge from UK CCS projects and to learning from other projects around the world, so as to help accelerate CCS cost reduction. (25 August 2015)
DECC has published a full list of key knowledge deliverables for the Carbon Capture & Storage projects at Peterhead and White Rose CCS projects.

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District Heat Networks

DECC: Low carbon pioneer cities Heat Networks Project – A process evaluation: this project provided grant funding to cover the costs of feasibility work to investigate the potential for heat networks in five of England’s core cities, top help them move towards the deployment of low carbon heat networks. It also provided expert advice and guidance to the cities. This evaluation by Sheffield Hallam University looks at the extent to which the project helped local authorities to overcome barriers to developing low carbon heat networks, which practices have worked well, and the local context that has driven (and affects) the development of heat networks. (3 September 2015)

DECC: Evaluation of the Heat Networks Delivery Unit: the HNDU is a specialist unit established in 2013 to address the capability and capacity issues faced by local authorities when developing heat networks.This report presents the findings and conclusion from the first wave of evaluation research that aims to: help refine future activity; provide formal accountability for the spend to date; inform wider DECC and other government departments work; identify where cross-government engagement is required to support the development of heat networks; and help local authorities improve their approach to developing such projects. (3 September 2015)

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Energy Efficiency

DECC: Residents across England win share of £25 million to warm their homes: announces that 20 local authority projects have been awarded funding from the £25m Central Heating Fund to support people living in homes that are not connected to the gas grid. The funding will enable the local authorities to install central heating systems in local fuel poor households. (2 September 2015)

DECC: Household energy efficiency national statistics user consultation: seeks views on proposals to change the frequency, format and content of DECC’s national statistics on the Green Deal, Energy Company Obligation and Insulation statistics. The consultation aims to review the impacts of these proposals on key users of the statistics, as well as to improve DECC’s understanding of who uses the statistics, and for what purpose. The consultation closes on 30 September 2015. (20 August 2015)

ClientEarth: Planning and reporting obligations of the Energy Efficiency Directive after 2020: this briefing looks at some aspects of the current EED planning and reporting regime and its influence on the future shape of energy efficiency governance. In particular, it considers whether EED planning and reporting obligations continue after 2020 and if so, are legislative amendments necessary to make changes to the EED post-2020 reporting; and whether it is possible to move EED planning and reporting obligations out of this Directive without turning it into an empty shell without any content. (6 August 2015)

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Energy Policy

ClientEarth: The effect of state aid governance on EU climate and energy policy: State aid rules are very important in the climate and energy context due to the high number of new and innovative technologies (e.g. technologies in the renewable energy or energy efficiency markets) which require support before they are fully market competitive. The use of state aid rules could be a powerful tool to further the EU’s climate and energy goals. This paper outlines how the use of State aid rules is not being used nearly as effectively as possible. (26 August 2015)

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Environmental Taxes

HMRC: Climate change levy (CCL) – Informal consultation on the transitional arrangements for removing the CCL renewables exemption: gives information about the withdrawal of the CCL exemption for renewable source energy and seeks views about the transitional period that will allow electricity utilities to supply renewable source electricity generated before 1 August 2015 and to redeem the associated levy exemption certificates (LECs). The consultation closes on 31 October 2015. (7 August 2015)

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Feed in Tariff 

DECC: Consultation on a review of the Feed-in Tariffs scheme: seeks views on a set of measures to control costs under the Feed-in Tariff, including revised tariffs based on updated technology cost data, a more stringent degression mechanism and deployment caps leading to the phased closure of the scheme in 2018-19. It proposes that if such measures cannot put the scheme on an affordable and sustainable footing, then there should be an end to generation tariffs for new applicants as soon as legislatively possible (January 2016). It also proposes other measures to ensure the scheme is more closely aligned with other DECC policy. The consultation closes on 23 October 2015. (27 August 2015)

DECC: Government response to the consultation on changes to Feed-in Tariff accreditation: sets out the Government's response to the July consultation on proposed action to limit the risk to bill payers of a deployment surge under the FIT scheme through the removal of pre-accreditation and the tariff, and the tariff guarantee aspect of pre-registration. The document summarises the responses that have been received and sets out next steps. It announces that, following the consultation, the Government has decided to remove the ability to pre-accredit under the FIT scheme from 1 October 2015. It will also remove the ability to receive a tariff guarantee through pre-registration, though the beneficial energy efficient aspects of pre-registration will remain available. The effect is that renewable energy projects in development will no longer be able to obtain an early guarantee of the tariff they will receive. A draft revised FIT Order has been laid before Parliament. (9 September 2015)

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Procurement

Cabinet Office: UK transposition of new EU Procurement Directive – Utilities Contracts Regulations 2016: seeks views on draft regulations that implement the Utilities Directive 2014/25 in the UK from 18 April 2016. The Government is consulting on whether the draft Regulations transpose the Directive effectively and in the best way.  
The Cabinet Office is also consulting on draft Concession Contracts Regulations 2016 that implement the Concessions Directive 2014/23. Both consultations close on 18 September 2015. (21 August 2015)

Cabinet Office: Public Contracts Regulations 2015 – Guidance on 'public/public' contracts: guidance on Reg.12 of the 2015 Regulations, which sets out new provisions that codify, clarify and develop the case law on whether contracts between public bodies should be subject to the public procurement rules or not. The new rules also cover the circumstances where either vertical or horizontal arrangements fall outside the rules. (26 August 2015)

CCS: Procurement Policy Note 14/15: Supporting apprenticeships and skills through public procurement: this PPN requires departments, their executive agencies and non-departmental public bodies to consider the opportunity for apprenticeships and skills development in their contracting requirements. These changes apply to contracts with a full life value of £10m or more with duration of 12 months and above. Businesses bidding for relevant contracts will need to propose the number of apprenticeships they expect to create in fulfilling the contract. This projection will be reviewed as part of the tender evaluation process and written into the ensuing contract. The contracting authority will take action if the supplier does not meet its commitment. (27 August 2015)

CCS: Procurement Policy Note 15/15 – EU statistics on utilities procurement: Annual return for calendar years 2013 and 2014: explains the requirement for annual statistical returns on utilities procurement contracts awarded in 2013 and 2014. This exercise is for utility sector entities only and not for public bodies purchasing utility products or services (gas, electricity, etc). Annual statistical returns should be made through the Crown Commercial Service system by 25 September 2015. (4 September 2015)

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Renewables

Ofgem: Comment period on our 2015-16 administration costs for the Renewables Obligation (RO): sets out Ofgem's proposed administration costs for the Renewables Obligation for 2015-16. The letter lists what the charges cover and provides a breakdown of costs for 2015-16. The closing date for comments is 30 September 2015. (2 September 2015)

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Shale Oil and Gas

DECC / DCLG: Shale gas and oil policy statement: set out the steps that the Government is taking to support its policy that there is a national need to explore and develop the UK's shale gas and oil resources in a safe, sustainable and timely way. This statement should be taken into account in planning decisions and plan-making. (13 August 2015)

DCLG: Amendment to permitted development rights for drilling boreholes for groundwater monitoring for petroleum exploration – Government response to the consultation and Invitation for views on further amendments to permitted development rights for petroleum exploration site investigation and monitoring: sets out the Government's response to the March 2015 consultation on proposals to amend permitted development rights (PDR) for mineral exploration to enable the drilling of boreholes for groundwater monitoring for petroleum exploration. Following consideration of the representations received, it is now seeking views on further PDR amendments for petroleum exploration for the drilling of boreholes for seismic investigation and monitoring and for the location and appraisal of shallow mine workings. It also discusses an extension of the proposed duration of the permitted development right for the drilling of boreholes for ground water monitoring in respect of petroleum exploration. The new consultation closes on 24 September 2015. (13 August 2015)

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Wind Energy

Policy Exchange: Powering up – The future of onshore wind in the UK: this report examines the future of onshore wind as one of the major low carbon energy generation opportunities in the UK. It examines the case for continuing the deployment of onshore wind, and reviews the latest onshore wind policy announcements. It then outlines a series of recommendations to continue the deployment of onshore wind, but in a form where subsidies are progressively removed and communities have more of a say. It estimates that the cost of onshore wind could continue to fall from £85/MWh to approximately £60/MWh by 2020 as a result of using larger turbines in high wind speed areas of the country, predominantly Scotland. This would put the cost of onshore wind in the same league as a new gas plant and significantly cheaper than offshore wind, biomass, or even nuclear. The paper says that in order to achieve these cost reductions, new onshore wind projects should be allowed to continue to take part in the Government’s Contract for Difference (CfD) auction mechanism. (28 August 2015)

DECC: Planning decisions for six Powys, Mid-Wales infrastructure projects: announces that following a combined public inquiry, the Secretary of State has refused consent under s.36 of the Electricity Act 1989 for five wind farms in Powys and has granted s.36 consent and deemed planning permission for repowering one wind farm. She has also refused consent for an overhead power line connection. See the decision letters for details. (7 September 2015)

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