Energy Eye – January / February 2016

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 two months.

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	Metering
Contracts for Difference	Regulation
District Heating	Renewable Heat
Energy Efficiency	Solar Energy
Energy Policy	Wave and Tidal Energy
Feed in Tariffs (FITs)	Wind Energy
Funding

Carbon Capture and Storage

HC Energy and Climate Change Committee: Future of carbon capture and storage in the UK: this report scrutinises the Government's strategy for carbon capture and storage (CCS) in the light of its decision in November 2015 to pull funding for CCS at the last minute. It warns that this decision will delay the development of the technology in the UK and could make it challenging for the UK to meet its climate change commitments agreed at the Paris COP21 summit. It recommends that DECC devise a new strategy for CCS in conjunction with a new gas strategy and that it engage with the National Infrastructure Commission to explore options for the development of CO2 transport and storage. The Commission should consult on whether developing CCS infrastructure should be one if its priority areas. (10 February 2016)

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Contracts for Difference

DECC: Contracts for Difference: standard terms and conditions, December 2015 update: these updated draft terms show the changes made to the contract compared with the version consulted on in March 2015, and reflect the positions set out in the Government response published in June 2015. In addition, the Sustainability Criteria in Annex 7 of the Standard Terms and Conditions have been revised to ensure continuing compatibility with the standard included within the amended Renewables Obligation Order 2015 (SI 2015/1947). (17 December 2015)

DECC: CFD Supplier Obligation – Consultation on improving efficiency and transparency: Government response: sets out  the Government's response and next steps to the September 2015consultation that proposed a series of technical amendments to the CFD supplier obligation with the aim of reducing costs to consumers through improving efficiency and transparency. The Electricity Supplier Payments (Amendments) Regulations 2016 have now been laid before Parliament, bringing the measures into effect from 1 April 2016. (25 January 2016)

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District Heating

DECC: Heat pumps in district heating – Final report: sets out the results of research into the ways in which heat pumps can be integrated into heat networks, to understand which types of scheme could be economically and environmentally beneficial in a UK context. The results are presented in this report in terms of the cost premium of each scheme compared to a conventional district heating network, the CO2 emissions reduction, and the cost of CO2 saved. There is also a collection of case studies from the UK and Europe. (11 February 2016)

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Energy Efficiency

DECC: Electricity Demand Reduction Pilot Scheme Phase II – Participant agreement terms and conditions: revised draft Participant Agreement setting out the commitments that successful participants will be required to deliver in order to be able to receive any payment of the funding they were allocated in the auction. (1 February 2016)

Mayor of London: MD1606 London Boiler Cashback Scheme: announces the Mayor's decision to approve expenditure of up to £2.8m to undertake a pan-London boiler scrappage scheme (the London Boiler Cashback Scheme) starting in early February 2016, along with the award of a contract of up to £148,000 to the Energy Savings Trust for the administration of the scheme. (1 February 2016)

DECC: What the Government is doing to keep your energy bill down: information for domestic energy users on how Government is keeping bills as low as possible by encouraging more competition, making switching energy supplier easier and controlling public subsidies paid for through energy bills. (22 January 2016)

DECC: Implementing energy savings opportunities: this guide provides an overview of the steps that businesses can take to maximise the impact of their ESOS assessment. It will help organisations follow best practice around the implementation of energy saving opportunities. (13 January 2016)

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Energy Policy

DECC: Energy Bill 2015/16 relevant documents: these fact sheets provide an overview of policy areas in the Bill, together with Keeling Schedules that illustrate how primary legislation would be amended by clauses in the Bill. (12 January 2016)

House of Commons Library: The Energy Bill 2015-16 – Background and changes in the Lords: provides a summary of significant changes made to the Bill in the Lords along with relevant background information. (14 January 2016)

DECC: Draft legislation on energy: this policy paper sets out draft measures on supply and switching, smart meters and competitive tenders. It includes explanatory notes. (22 January 2016)

DECC: Towards a smart energy system: this report sets out some of the key challenges that the UK energy system faces as it seeks to power the economy and decarbonise cost effectively, and how a smart energy system, based around new forms of flexibility, could help deliver the Government's objectives. It sets out several areas that DECC will address further over the forthcoming year.  (17 December 2015)

HC Energy and Climate Change Committee: Our priorities for Parliament 2015-20: this report follows a consultation with the Committee’s stakeholders on its Priorities for Holding Government to Account. As a result of this work the Committee has set three strategic goals for its work over the course of the Parliament. The evidence gathered has also been used to inform the Committee’s programme of inquiries: the UK’s climate change targets will be a priority area of work in 2016, along with scrutiny of the Government's approach to decarbonising heat and transport. (18 December 2015)

HL EU Energy and Environment Sub-committee: EU energy governance: this report states that the EU-wide binding 2030 renewables targets will not be delivered unless they are backed-up by a monitoring and enforcement mechanism that acts as a guarantor for the agreement, and ensures that Member States share the effort equitably. It calls on the European Commission to ensure that proposals for a future energy governance framework include legal clarity, a respect for Member State sovereignty, a focus on security of supply, commitment to the consumer, real ambition for decarbonisation and increased regional co-operation. (18 December 2015)

DECC: What the Government is doing to secure investment in clean, secure and affordable energy: lists the top 10 things that the Government is doing to secure investment in clean secure energy. It was issued in response to a letter about energy policy in The Times on 26 January 2016. (26 January 2016)

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Feed in Tariffs (FITs)

DECC: Government response to the consultation on a review of the Feed-in Tariff scheme: sets out the Government's response to the August 2015 consultation. It announces: revised tariffs, including a new tariff for domestic-scale solar of 4.39p /kwh; deployment caps set to limit new spending on the scheme to £100m up to the end of 2018/19; and the reintroduction of pre-accreditation for solar PV and wind generators over 50kW and all hydro and anaerobic digestion generators. (17 December 2015)

Ofgem: Guidance on pausing the FITs Scheme: guidance for ROO-FIT generators and FIT licensees on the impact of the pause to the scheme that takes effect from 15 January 2016 until 7 February 2016 (inclusive). DECC introduced the pause to preserve the FITs budget before caps are introduced. (18 January 2016)

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Funding

DBIS: Enterprise Bill – Green Investment Bank: this factsheet outlines the measures in the Enterprise Bill relating to the Government plans to move the Green Investment Bank (GIB) into private ownership by removing statutory provisions that provide for state control over the corporate policy of GIB. This will enable the company to be re-classified to the private sector, and so be able to borrow and raise capital as appropriate to fund the green investment opportunities it finds, without impacting public sector debt. (15 December 2015)

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Metering

DECC: Government response to March 2015 consultation on non-domestic smart metering – The advanced metering exception: sets out the decision to extend the period in which suppliers may install advanced meters at non-domestic sites, from April 2016 to 28 April 2017 for large suppliers, and 17 August 2017 for small suppliers. (17 December 2015)

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Regulation

DECC: Consultation on ensuring regulation encourages innovation: seeks comments on how DECC’s and the OGA’s regulatory activities interact with innovation in the energy sector in the form of emerging technologies and new business models. It focuses on how legislation and enforcement frameworks can help support new technologies and business models to encourage growth, how new technology is likely to shape the energy sector and how regulators can better utilise new technologies to generate efficiency savings and reduce burdens on business. The closing date for comments is 11 February 2016. (15 January 2016)

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Renewable Heat

DECC: Evaluation of Renewable Heat Incentive (RHI): new reports show the positive impact of the RHI schemes, with the majority of accredited renewable heat installers reporting that the RHI had been wholly positive in its influence on the renewable heat technology market. The evaluation reports follow the Government’s commitment to increase funding for the RHI to £1.15bn in 2021 to ensure that the UK continues to make progress towards its climate goals while reforming the scheme to improve value for money, delivering savings of almost £700m by 2020-21. (11 February 2016)

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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 July 2015 consultation on proposals for controlling spending on solar PV projects of 5MW and below within the Renewables Obligation (RO). It announces that the RO will be closed to new solar PV capacity at 5MW and below from 1 April 2016. There will be grace period arrangements to protect developers who made a significant financial commitment on or before 22 July 2015 and developers who experience grid delay beyond their control. (17 December 2016)

DECC: Consultation on the levels of banded support for new solar PV under the Renewables Obligation: seeks views on proposals for reduced support under the Renewables Obligation for solar PV up to 5MW, to apply from 1 June 2016. It also sets out the proposed eligibility criteria for the banding reduction exception. The consultation closes on 27 January 2016. (17 December 2015)

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Wave and Tidal Energy

DECC: Review of tidal lagoons: announces an independent review into the feasibility and practicality of tidal lagoon energy in the UK, to improve understanding of how this technology could contribute to the future of the UK’s energy mix in the most cost effective way. The review will start in Spring 2016. It will help establish an evidence base to ensure all decisions made regarding tidal lagoon energy are in the best interest of the UK. (10 February 2016)

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Wind Energy

DECC: World’s largest offshore wind farm to be built in the UK: announces the Final Investment Decision for Hornsea One offshore windfarm off the coast of Lincolnshire, supported by a new Siemens blade factory in Hull, due to be built by the end of 2016. Hornsea One is expected to be fully operational in 2020. (3 February 2016)

Onshore Wind Generating Stations (Exemption) (England and Wales) Order 2016 (SI 2016/21): this order, which comes into force on 1 March 2016, modifies the Electricity Act 1989 by removing the requirement for onshore wind generating stations to apply to the Secretary of State for planning consent. It standardises the
planning consents process for onshore wind farms in England and Wales, regardless of their size, allowing them all to be determined within the Town and Country Planning Act 1990. (14 January 2016)

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