WELCOME TO OUR NEW MONTHLY ENERGY UPDATE, BRINGING YOU LINKS TO THE MAJOR DEVELOPMENTS RELEVANT TO THE INDUSTRY.
This December 2020 / January 2021 update includes: the National Security and Investments Bill; the Energy White Paper; the relaxation of planning requirements for energy storage; the 10 Point Plan; CfD consultation; smart meter installation targets; and the latest on water regulation.
The National Security and Investment Bill, introduced in the House of Commons on 11 November 2020, will bring in a stand-alone national security vetting regime to replace existing powers under the Enterprise Act 2002 to scrutinise mergers which give rise to national security considerations. Energy sector mergers are likely to be affected.
A Department for Business, Energy & Industrial Strategy consultation setting out the Government's proposed sector definitions for the types of entity that could come under the National Security and Investment Bill's mandatory notification regime. Energy companies are likely to get caught.
INFRASTRUCTURE PROJECTS AND ENERGY BREXIT BRIEFING
We have published a short briefing which sets out the key Brexit-related primary legislation, a summary of the Withdrawal Agreement, the recent Trade and Cooperation Agreement, and key information on data protection, energy aspects, transport aspects and subsidy control.
Detailed Government guidance on matters including trading gas and electricity with the EU, running an oil or gas business, generating low-carbon electricity and participation in the EU ETS and the new UK ETS can be found on the gov.uk website by searching Consultations – Policy Papers – Brexit.
In force: 2 December 2020. This removes the requirement to seek planning consent under section 36(1) of the Electricity Act 1989 for electricity storage, except pumped hydro storage, in England and Wales.
In force: 2 December 2020. This removes electricity storage, except pumped hydro storage, from the need to seek planning consent in accordance with the national planning regime (Nationally Significant Infrastructure Projects (NSIP) regime) under the Planning Act 2008 in England and Wales. Instead, planning consent for these types of development may be sought from the relevant Local Planning Authority under the Town and Country Planning Act 1990.
Updated guidance from OFGEM describes its process for determining disputes between the National Grid Electricity System Operator and participants in the capacity market.
The Department for Business, Energy & Industrial Strategy has launched a call for evidence on how the exemptions from the requirement for a licence for the generation, distribution and supply of electricity operate and whether amendments to the regime are necessary to reflect government aims and objectives. The current regime follows the Class (Exemption from the requirement for a licence) Order 2001, SI 2001/3270, which was last changed in 2007, despite the transformation of Britain's energy landscape. The consultation closes at 11.45 pm on 1 March 2021.
In force: 27 November 2020. These amend the Heat Network (Metering and Billing) Regulations 2014 to ensure that heat metering devices for each final customer are installed in buildings where it is technically feasible and cost-effective to do so, and ensure that compliance with the metering and billing requirements of the Regulations is enforced. This instrument extends mandatory billing and meter accuracy requirements to all customers in buildings where metering devices are installed. For background see our article All customer of heat networks in buildings may need a heat meter.
A consultation by the Department for Business, Energy and Industrial Strategy (BEIS) on the design of the proposed Green Heat Network Fund scheme, a capital grant funding programme to assist new and existing heat networks move to low and zero carbon technologies. The consultation seeks views on: the application and eligibility criteria for the scheme; the sources of thermal energy to be supported; the type of heat networks in scope; and finance and supply chain issues. Consultation ends: 29 January 2021.
A report by the Economy, Energy and Fair Work Committee analyses
the key provisions of the Heat Networks (Scotland) Bill 2020. The
Committee began taking evidence at Stage 1 on 23 June 2020. Read
our article on the Bill here.
NET ZERO TRANSITION
UK ENERGY WHITE PAPER: POWERING OUR NET ZERO FUTURE
The long-awaited Energy White Paper setting out future energy policy was finally published on 14 December 2020. For our summary and initial reaction see this article.
The UK's National Infrastructure Strategy was finally published on 25 November 2020, alongside Chancellor Rishi Sunak's Spending Review. The Spending Review, following closely after last week's Ten Point Plan for a Green Economic Recovery, didn't have much more to say on energy, but buried within the National Infrastructure Strategy are some clues on what the Energy White Paper is going to say.
10 POINT PLAN FOR GREEN RECOVERY
Boris Johnson has announced a Ten Point Plan for a Green Industrial Revolution, as a step towards the UK's net zero 2050 target and a roadmap for a green economic recovery from the coronavirus pandemic. Read our article that featured in Energy Voice here.
In partnership with Utility Week our colleagues in Energy & Utilities have penned a report which offers an insightful deep-dive into the proposed post-covid 'Green Recovery' and the associated opportunities for businesses in achieving our carbon neutral goals.
Our Energy & Utility legal specialists are producing an 8-part series of global webinars, which will investigate the transition and subsequent opportunities the energy transition has to offer. In case you missed our first sessions, you can listen to the recordings from the link above. Future sessions in Asia, Africa and the GCC will be running in 2021 and dates confirmed in due course.
OIL & GAS
ln force: In accordance with article 1(2). This establishes, under section 22 of the Petroleum Act 1987, safety zones with a radius of 500 metres from the specified point around the 11 subsea installations specified in the Schedule to this Order. Comes fully into force on the general coming into force date, where the installation arrives at its station before that date, and when the installation arrives at its station, in any other case.
This Department for Business, Energy & Industrial Strategy consultation seeks views on proposals to link the mutualisation threshold with the annual cost of the scheme to suppliers. This would increase the threshold to around £62 million, but it would rise or fall in future years as the cost of the scheme changes. This new arrangement would restore the balance of risk between generators and suppliers that was established when the mutualisation mechanism was first introduced. It would ensure that suppliers that met their obligation were not unduly exposed to the unmet obligations of their competitors. A second call for evidence relates to the way the mutualisation amount is calculated. Currently, the entire payment shortfall is mutualised once the level of default exceeds the threshold. BEIS think that it might be unfair on suppliers because it exposes them to the full cost of supplier default. The first consultation closes on 11 January 2021 whilst the second call for evidence closes on the 19 January 2021.
The fourth round of the Contracts for Difference (CfD) scheme, opening late 2021, will aim to double the capacity of renewable energy compared to the last round and expand the number of technologies supported. For more information see our article CFD Fourth Allocation Round and Supply Chain Policy.
A Department for Business, Energy and Industrial Strategy consultation seeks views on proposals for changes to Supply Chain Plans and the Contracts for Difference (CfD) contract. Consultation ends: 28 January 2021. For more detail see our article Contracts for Difference Fourth Allocation Round and Supply Chain Policy.
The Government has commissioned new research into space-based solar power systems that would utilise large solar power satellites to collect solar energy, convert it into high-frequency radio waves, and send it to ground-based receivers connected to the electrical power grid. The research will examine whether this renewable technology could offer a resilient, safe and sustainable energy source.
Scottish Government guidance for on-site operations,
construction and return to the office environment during
A Department for Business, Energy and Industrial Strategy publication provides guidance to facilitate successful smart meter installations in domestic new build premises.
CONSULTATION ON SMART METER POLICY FRAMEWORK POST 2020: MINIMUM ANNUAL TARGETS AND REPORTING THRESHOLDS FOR ENERGY SUPPLIERS
A Department for Business, Energy and Industrial Strategy consultation seeks views on annual tolerance levels associated with smart meter installation targets for energy suppliers in the UK and the level of reporting thresholds for large energy suppliers. Consultation ends: 15 January 2020. Read more detail from our article here.
In 2019, every English water company agreed a 'Public Interest Commitment' which included a pledge to reach net zero carbon on operational emissions by 2030. On 12 November 2020, the industry body Water UK launched its routemap to net zero by 2030 (Routemap). The plan requires reductions, increased use of renewables, sequestration of carbon and offsetting. The approach centres on collaboration, cross-sector working, partnerships and joined-up thinking. The message is simple - to get things done.
Following a June 2020 consultation, an OFWAT document, published alongside Consultation on regulatory reporting for 2020-21 - Responses, provides notice of and reasons for the changes to make to the regulatory accounting guidelines that water companies must follow in preparing their annual performance reports.
An OFWAT consultation is seeking views to inform its approach to assessing whether and how revisions to regulatory protections may be warranted in the business retail market in respect of risks of elevated customer bad debt resulting from the effects of the COVID-19 pandemic. Consultation ends: 22 January 2021.
A letter published by DEFRA regarding the green economic recovery regulatory assessment process.
An OFWAT document lays out, for stakeholders, how they expect water companies to engage with customers and stakeholders when developing their charging policy and charges, as well as its expectations around charges assurance. The document also summarises the charges information requirements on water companies and the timetable for publishing this information.
The Water Industry (Suppliers' Information) Direction 2020 has been approved by the Secretary of State for Environment, Food and Rural Affairs and the Welsh Ministers. The Direction comes into force on 1 January 2021.
CHARGING ARRANGEMENTS FOR NEW CONNECTION SERVICES FOR ENGLISH COMPANIES - COMPARATIVE ANALYSIS AND CONSULTATION - CONCLUSIONS
A OFWAT report sets out the conclusions of a consultation on its analysis of English companies' charging arrangements for new connection services.
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