UK: Energy Update - 4 December 2013

Last Updated: 6 December 2013
Article by Shash Dayal

Welcome to the final edition of Field Fisher Waterhouse's Energy Update for 2013.

This month we consider: the recommendations in Sir Ian Wood's interim report on the offshore oil and gas industry in the UK.  We report on the findings of the review by regulators into allegations of gas market manipulation and consider price transparency regulations in Europe.  We examine the recent announcement of the cancellation of the Atlantic Array offshore wind farm and what this may mean for the UK's renewables target.  Cyber attacks are increasing against corporations and we consider how they may affect energy companies.  Finally, we consider the Council of European Energy Regulators (CEER) recent recommendations on gas storage.

As we approach the New Year, we look forward to Sir Ian Wood's final report and recommendations for the industry, how UK and European authorities deal with green energy and renewables policies in the face of the debate about their costs being passed on to end-users, the implications of new nuclear energy around the world and further developments in shale oil and gas both in the UK and globally.

We take this opportunity to wish you the very best for the festive season and look forward to updating you on energy issues in 2014.  

UK Offshore Oil and Gas – Sir Ian Wood's interim report published

Sir Ian Wood, recently retired Chairman of the Wood Group, has published his interim report revealing the economic and energy security opportunities still available from the UK's offshore oil and gas resources. The report entitled "UKCS Maximising Recovery Review" is the first of its kind in more than two decades.  Sir Ian interviewed 40 active companies in the oil and gas industry, representing more than 95% of UK Continental Shelf ("UKCS") production, while compiling the report.  He also spoke to key government figures and regulators from neighbouring countries such as Norway and the Netherlands.

Tim Bird, partner in Field Fisher Waterhouse's Energy and Natural Resources Group commented: "Although shale gas may be around the corner, the offshore reserves in the UKCS are here and now as far as the UK oil and gas industry is concerned.  We view the interim recommendations Sir Ian has put forward quite positively although it remains to be seen how effective the addition of another regulatory or arms length body in the energy sector will be.  In any event, a strategy to maximise the recovery from the UKCS is of vital economic importance both to the UK and to the international companies operating here and we look forward to Sir Ian's final set of recommendations and how they may be taken forward by the government."

Click here for the key themes, findings and recommendations of the interim report.

Regulators find no evidence of gas market manipulation in the UK

On 7 November 2013, the regulators Ofgem and the Financial Conduct Authority (FCA) announced that after conducting their review they had found no evidence of gas market manipulation following allegations by a former employee of ICIS-Heren (an energy price reporting agency). The allegations of market manipulation related to trading activities in September 2012.

Click here for more.

UK's £4bn Atlantic Array wind farm project axed: renewables target still on track?

RWE Innogy the developer of the proposed Atlantic Array, a £4bn wind farm project off the north Devon coast in the UK, has withdrawn from the project, saying that it would have been uneconomic to proceed. The cost of overcoming technical challenges in the Bristol Channel, including the deep water and adverse seabed conditions, meant the project had become prohibitive. Atlantic Array would have been one of the largest wind farms in the world with as many as 240 wind turbines generating up to 1,200 megawatts (MW) of power, supplying 900,000 households.

Commenting on the decision, the UK Government's Department of Energy and Climate Change said the decision not to proceed was made on purely technical grounds.  The UK is still expected to deploy significant amounts of offshore wind to meet the 2020 renewable energy target of 15 per cent introduced in the 2009 EU Renewable Directive.  The government's latest data show that in 2011 and 2012 an average of 3.94 per cent of energy consumption came from renewables, just below the 4.04 per cent target.  Offshore wind energy generation was 46% higher and overall wind energy generation capacity was 37% higher in 2012 than the previous year.

For more information on the UK's National Renewables Statistics data click here.

Energy industry is on alert against increasing cyber attacks

Governments the world over have been ramping up their digital agendas in recent months, each seeking to instil the importance of cyber security on citizens and businesses alike.  Attempts are being made to raise cyber security awareness, and essentially the message is that organisations must understand their networks, systems and data, and must take a proportionate, risk-based approach to keeping them secure. Resilient networks and systems must be in place.

This is especially important in the energy industry which has become increasingly vulnerable to cyber attacks by 'hacktivists', state-sponsored hackers and other cyber criminals who are all seeking to exploit network and system vulnerabilities.  Olivia Harrisson in Field Fisher Waterhouse's IP and Technology, Privacy& Information Law Group explores the implications of this for the energy industry. 

Click here for more.

Council of European Energy Regulators (CEER) Interim Report on Gas Storage

The Council of European Energy Regulators (CEER) published an interim report entitled "Changing storage usage and effects on security of supply" on 21 November 2013. The CEER believes that the demand side is likely to recover, as the intermittent character of renewables means that gas fired power plants will serve as a backup fuel to balance the electricity grid.  In its view, price will determine the competitive edge of storage flexibility.  According to the CEER, current storage capacity is sufficient to meet European gas demand in next five years.

The CEER recommends that (i) the market for storage should be disturbed as little as possible; (ii) any interventions taken should be appropriate for the national and regional flexibility markets and should be transparent and proportionate, not charging network users with unnecessary costs, which would inevitably be reflected in the price paid by final customers; (iii) interventions should not distort the market and should be in line with the overall storage access regime as defined at a national level; (iv) no measures should be introduced unless there is clear evidence that market failure will occur (which in its view does not appear to be the case); and (v) any possible intervention should fit with the concept of improving security of supply in the EU.

The final report from CEER is due in 2014.

Click here for a link to the interim report.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Shash Dayal
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions