Energy Eye – October 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.

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:

Community Engagement	Heat Networks
Competition	Procurement
Contracts for Difference (CfD)	Shale Gas
Emissions	Smart Meters
Energy Efficiency	Solar Energy
Energy Policy	Wind Energy
Feed in Tariff

Community Engagement

DECC: Community benefits and engagement guidance for onshore wind: DECC has published best practice guidance on community benefits and community engagement for onshore wind developers, communities living in the locality of a wind farm and local authorities. It provides communities with information as to what to expect, in terms of both engagement and community benefits, and when. The guidance include information about different types of community benefit, areas of fund spend and fund administration, and examples of good practice from around the UK. (7 October 2014)

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Competition

Ofgem: Update on competition in connections market review – Issues limiting effective competition: Ofgem is reviewing the market for new connections to the electricity distribution system. The first step in this review was a call for information about how well the market is working. Ofgem has concerns about how the market is working, based on the information provided to date. The issues highlighted in that consultation would appear to have a negative effect on competition, to the detriment of customers. It now seeks comments on its understanding of the issues raised in that consultation and to highlight any others that might be missing. Ofgem notes that a number of the issues around the DNOs' roles in the connection process are not new, and it questions why all DNOs have not already addressed them. It continues to encourage DNOs to take action, and invites them to explain any further changes that have been made to remove barriers to competition. The closing date for all responses is 4 November 2014. (7 October 2014)

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Contracts for Difference (CfD)

HC Public Accounts Committee: Early contracts for renewable electricity: this report sets out the Committee's finding from its inquiry into DECC's award of contracts in April 2014 to eight renewable electricity projects under an early version of the new Contracts for Difference scheme. It finds that, in awarding the contracts without price competition, DECC failed to adequately consider how to secure best value for consumers. In committing 58% of the total funds available for renewable contracts under these transitional arrangements, DECC has severely constrained the amount available to be awarded under new arrangements through price competition, reducing the opportunity to test the market and secure the best value for consumers. DECC also failed to defend consumers’ interest under the terms of these contracts. The committee makes a number of recommendations, including: 

• DECC must now seek to award the remaining funds using price competition;
• for future CfDs, DECC should ensure it requires information from project developers on projects’ costs and returns and includes contract clauses to allow it the opportunity to claw-back for consumers a share of any excessive profits;
• DECC should conducs and publish a robust evaluation of the actual benefits and costs of this scheme;
• DECC should ensure its future decisions on the budgets for support for different technologies and its process of allocating contracts are based on a clear understanding of how best to achieve the balance of technologies required to meet its strategic objectives at least cost for consumers;
• DECC must ensure the Counterparty Body is wholly independent of the industry and has the skills, resources and information it needs to manage all Contracts for Difference effectively and hold it to account for ensuring that the interests of consumers are fully protected.

(3 October 2014) 

DECC: Contract for Difference – Final Allocation Framework for the October 2014 Allocation Round: updates the Final Allocation Framework for the October 2014 allocation round, which opens for application on 16 October 2014. The five discrete and minor changes to the 1 September document are identified in the Framework revision notice. (2 October 2014)

DECC: Budget notice for CFD Allocation Round 1: sets out what is required of the Delivery Body for this allocation round, as per the Allocation Regulations 2014. The budget notice is accompanied by explanatory notes with respect to future allocation rounds and remaining budget, maxima and minima, and Scottish Islands Onshore wind projects. The budget notice should be read in conjunction with the explanatory notes. (2 October 2014) 

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Emissions

DECC: Implementing the Emissions Performance Standard – Monitoring and enforcement arrangements in England and Wales: the Energy Act 2013 established an Emissions Performance Standard (EPS) to limit carbon dioxide emissions from new fossil fuel power stations. The Act allows for limited tailoring of the arrangements in specified circumstances and for the creation of arrangements for monitoring and enforcement of the EPS. This consultation seeks views on aspects of the EPS, including: monitoring compliance; the operation of the Carbon Capture and Storage (CCS) project exemption; and arrangements where an existing coal power plant upgrades to supercritical technology or replaces a main boiler or installs an additional one. It also seeks views on a draft statement of policy relating to any future exercise of the Secretary of State’s power to modify or suspend the EPS. The Act provides that this power is exercisable in limited circumstances, where there is an electricity shortfall or a risk of one. The consultation closes on 5 November 2014. (25 September 2014) 

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Energy Efficiency

DECC: Warm Home Discount – Extension to 2015/16: sets out what the Warm Home Discount has achieved since its introduction in April 2011. It seeks views on proposals for changes to the scheme for 2015/16. The consultation closes on 13 November 2014. (2 October 2014)

DECC: Working draft of the Electricity and Gas (Energy Company Obligation) Order 2014: the Government's response to the consultation on the future of the Energy Company Obligation (ECO) set out changes to the current scheme which ends in March 2015, and the establishment of a new phase of the scheme, with new targets, for the period from April 2015 to March 2017. The draft Order relating to the changes to the current period of the scheme to 2015 has been laid in Parliament. The draft Order relating to the new phase of the scheme is expected to be laid in Parliament shortly, and in the meantime is available as a working draft subject to Parliamentary approval. (2 October 2014)
See also DECC: Government response to the discussion paper on converting SAP/RdSAP 2012 CO2e to SAP/RdSAP 2009 CO2 emissions on proposals to use a conversion factor to ensure obligated energy companies can report the CO2 savings of the measures installed once the updated version of RdSAP is launched later this year. This reponse confirms that the Government will adopt the conversion factor of 0.925, detailed under Option 1, as a weighted average conversion factor. The conversion factor will be provided for in an amendment to the current ECO Order and in the ECO Order 2015-17. Either SAP/RdSAP 2009 or SAP/RdSAP 2012 may be used to calculate scores until the end of the current ECO period on 31 March 2015; after that date SAP/RdSAP 2012 must be used. (2 October 2014)

DECC: An additional £100 million for household energy efficiency: announces that a new phase of the Green Deal Home Improvement Fund, designed to help people make energy saving improvements to their home, will open to households before the end of November 2014. This £100m funding is in addition to the £450m allocated to household energy efficiency over three years, which was announced in December 2013. Further details, including terms and conditions, rates and all measures to be covered, will be announced in November. (7 October 2014)

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Energy Policy

DECC: Speech to the Elmburst Energy Conference: text of speech by Baroness Verma to the Elmhurst Energy Conference for energy and sustainability professionals. She talks about the Government's energy efficiency policy, and highlights how they are working with industry, the public sector and the pirvate rented sector to create a truly energy efficient society. (19 September 2014)

DECC: Government response to the consultation on the Government Electricity Rebate: sets out the Government's response to the June 2014 consultation on the Government Electricity Rebate (GER). This aims to ensure that all eligible domestic electricity customers receive a £12 rebate on their bills in 2014 and 2015 to help lower the impacts of government environmental and social policy costs on consumer energy bills. It states that the GER will be delivered through electricity suppliers who will be responsible for delivering the GER to those customers it supplies with electricity on the qualifying date (12 October 2014 in scheme year 1 and 11 October 2015 in scheme year 2). Suppliers will have an obligation to take all reasonable steps to ensure that all their eligible customers are provided with the GER in the six weeks following the qualifying date. The Government will reimburse suppliers for the GERs they deliver to their eligible customers. (2 October 2014)
DECC has also issued Guidance for licensed electricity suppliers on how to comply with the Secretary of State’s Government Electricity Rebate (GER) Direction, which sets out the obligations on domestic electricity suppliers to deliver the GER. 

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Feed in Tariff

Ofgem: Essential guide to applying for preliminary accreditation under the Feed-in Tariff (FIT) scheme: provides a simple overview of the preliminary accreditation (PA) application process for ROO-FIT installations and what it requires. It explains what the applicant's responsibilities are and what they can expect from Ofgem’s ROO-FIT team. It advises on how to complete the questions in the application form that are often answered incorrectly, and has handy tips and specific examples to illustrate points to help applicants get their application right first time. (18 September 2014)

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Heat Networks

DECC: £9.4 million to boost low carbon heating: announces the 32 successful local authorities that will receive a share of £2.4m funding to support the development of heat network projects, designed to provide more efficient heat to buildings and potentially lower heating bills, through the Government’s Heat Networks Delivery Unit. The Government has also launched a £7m scheme offering developers across the UK the opportunity to compete for funding to develop new heat networks technologies, such as recovering industrial heat or energy from waste. The aim is to drive forward innovation by helping businesses create new technologies that work more efficiently, cut carbon emissions and cost less.(3 October 2014)

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Procurement

Cabinet Office: UK transposition of new EU Procurement Directives: seeks views on draft Public Contracts Regulations 2015 that implement the Public Procurement Directive 2014/24 in England, Wales and Northern Ireland. Once in force, the new regulations will replace the current Public Contracts Regulations 2006. The draft Regulations use a “copy out” approach to the transposition of the provisions of the Directive, which means that they follow the language, layout and numbering in the Directive as closely as possible. This approach, together with other helpful information on drafting, is explained in the Technical Note on Drafting that accompanies the draft Regulations. The consultation closes on 17 October 2014. (19 September 2014)
See our alert: New draft Procurement Regulations published.

Bevan Brittan: Byte size procurement update 11: The draft Public Contract Regulations 2015 – Implementing optional provisions: the Cabinet Office has launched a consultation on the draft Public Contracts Regulations that transpose Directive 2014/24. The draft Regulations include some additional provisions not in the Directive. This byte size update highlights some of the optional provisions which will be of particular practical interest to those working in procurement. (26 September 2014)

Cabinet Office: Procurement Policy Note 09/14: Use of Cyber Essentials scheme certification: the Cyber Essentials scheme defines a set of controls which, when properly implemented, will provide organisations with basic protection from the most prevalent forms of threat coming from the internet. There are two levels of certification: Cyber Essentials and Cyber Essentials Plus. Cyber Essentials is for all organisations of all sizes, and in all sectors. This PPN advises that the Government is making the scheme mandatory for central government contracts advertised after 1 October 2014 which involve handling personal information and providing certain ICT products and services. (26 September 2014)

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Shale Gas

DECC: Letter of response to the 'talk fracking' campaign: letter from Energy Minister Matthew Hancock setting out answers to questions on shale gas and fracking submitted via the 'my fracking questions' website. (15 September 2014)

DECC: Underground drilling access: sets out the Government's response to the May 2014 consultation on a proposal for underground access for the extraction of gas, oil or geothermal energy. The consultation document set out the technologies involved, including underground drilling, the existing framework for access, the potential options, and details of the proposed solution - that oil and gas and geothermal companies will be able to use underground land but only below 300m and they will still need to obtain all the necessary regulatory permissions, like planning and environmental permits. The Government states that, having carefully considered the consultation responses, it believes that the proposed policy remains the right approach to underground access and that no issues have been identified that would mean that the overall policy approach is not the best available solution. It will therefore put before Parliament primary legislation to implement these policy proposals. (25 September 2014) 

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Smart Meters

DECC: Consultation on transitional arrangements in the Smart Energy Code: seeks views on certain transitional arrangements with respect to the Smart Energy Code (SEC): proposed transitional drafting with respect to Communications Hubs forecasting; WAN coverage information; and service management. It also seeks views on a proposed new power allowing the Secretary of State to re-designate SEC subsidiary documents. The consultation closes on 31 October 2014. (3 October 2014)

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Solar Energy

DECC: Government response to consultation on changes to financial support for solar PV: sets out the Government's response to the May consultation on measures to control spending on new solar PV capacity above 5MW within the Renewables Obligation (RO) and to promote the deployment of mid-scale building-mounted solar PV in the small-scale Feed-in Tariff (FiT) scheme. It states that it has decided to close the RO to new solar PV generating stations above 5MW in scale from 1 April 2015 and to keep the RO open to new solar PV projects at or below 5MW until 31 March 2017. There will be a grace period to protect projects where significant financial commitments have been made on or before 13 May 2014, and a further consultation on an additional grace period for grid delay. It will not undertake a banding review of solar PV at this time – the conditions for a banding review should remain unchanged and solar PV will continue to be covered by the grandfathering policy of maintaining RO banding levels for accredited capacity.
DECC has now published the Further consultation on changes to financial support for solar PV, which seeks views on the introduction of a possible grid delay grace period for new solar PV capacity above 5MW under the RO and the proposed definition for other-than-stand-alone installations under the FiT scheme. The consultation closes on 24 October 2014. (2 October 2014) 

IEA: Technology roadmap – Solar photovoltaic energy: this report looks at global development and uptake of solar PV technology. It identifies priority actions for governments, industry, financial partners and civil society that will advance technology development and uptake to achieve international climate change goals of a 50% reduction in energy-related CO₂emissions by 2050. The roadmap’s vision extends to 2050 but highlights key actions for the next five years, deemed critical to achieving long-term emission reductions. (15 September 2014)

IEA: Technology roadmap – Solar thermal energy: this report looks at global development and uptake of solar thermal electricity (STE). It aims to provide encouragement and information to individual countries to elaborate action plans, set or update targets, and formulate roadmaps for concentrating solar power (CSP) technology and STE deployment. The roadmap’s vision extends to 2050 but highlights key actions for the next five years, deemed critical to achieving long-term emission reductions(15 September 2014)

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Wind Energy

Burbo Bank Extension Offshore Wind Farm Order 2014 (SI 2014/2594): this Order, which comes into force on 26 September 2014, grants development consent for, and authorises DONG Energy Burbo Extension (UK) Ltd to construct, operate and maintain, a generating station in the sea approximately 7km off the north Wirral coast, 8.5km from Crosby beach and 12.2km off the coast of Point of Ayr, Wales, being an extension to the existing Burbo Bank offshore wind farm located on the bed of Liverpool Bay, together with all necessary and associated development. (25 September 2014)

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