Welcome to this month's Energy and Water update, keeping you up to date with the major developments you need to know.

All the key energy and water developments this month in one place. We cover the Future Systems Operator consultation, Smart Systems and Flexibility Plan, Energy Digitalisation Strategy and more.

Capacity Market
The Electricity Capacity (Amendment) Regulations 2021 (SI 2021/901)

These Regulations amend the Electricity Capacity Regulations 2014 (S.I. 2014/2043) in order to provide participants in the Capacity Market with greater flexibility when trading their Capacity Agreements and when appealing decisions made by the Capacity Market Delivery Body. The Regulations came into force on 27 July 2021 and implement the proposals for improvements response that we reported on last month.
Explanatory Memorandum 

Consultation: Capacity Market 2021: call for evidence on early action to align with net zero

A Department for Business, Energy and Industrial Strategy (BEIS) call for evidence on the capacity market is seeking views on improving delivery assurance and early actions to align the scheme with net zero. Consultation ends: 18 October 2021.
BEIS, 26 July 2021

Consultation on carbon capture usage and storage: amendments to Contracts for Difference regulations

A consultation by BEIS proposes amendments to the CfD regulations that will facilitate the award of the dispatchable power agreement (DPA) for power carbon capture and storage (CCS): retrofit CCS eligibility for a DPA; payment mechanism terminology; and non-pipeline shipping. Consultation ends: 8 September 2021.
BEIS, 21 July 2021

Guidance published on new carbon capture technologies

The Environment Agency has published guidance on carbon capture as part of its aim for a net zero future.
The Environment Agency, 19 July 2021

Electric Vehicles
Electric vehicle charging final report

The Competition and Markets Authority (CMA) has published its final report in relation to a market study into electric vehicle charging in the UK.
CMA, 23 July 2021

Role of vehicle-to-X energy technologies in a net zero energy system: call for evidence

BEIS has published a call for evidence to investigate the role of vehicle-to-X technologies in a net zero energy system, and possible barriers to their widespread use. The consultation closes on 12 October 2021.
BEIS, 20 July 2021

Zero emission vehicles: First Report of Session 2021-22

A Transport Committee report on zero emission vehicles concludes a clear policy framework is essential to ensure that industry can deliver the vehicles and charging infrastructure required. It sets out a number of recommendations to Government to boost the production and purchase of electric vehicles, including work with the National Grid to map national coverage to eradicate "not-spot" areas and identify locations where the Grid will not cope with additional usage.

For further Electric Vehicle developments generally, see Key Transport Developments in July 2021.

Energy Regulation
Domestic energy retail consultation: Opt-in switching and testing opt-out switching

A BEIS consultation proposes to create a framework to introduce an opt-in switching scheme, where households on the most expensive tariffs are offered a simple method of switching to a cheaper tariff. As part of considering how default arrangements might be reformed to enable greater competition, opt-out switching will also be tested, where, unless they choose not to be, consumers who have not switched for a while are switched to a competitive new contract. Consultation ends: 15 October 2021. 
BEIS, 23 July 2021

Energy retail market strategy and extension to the Energy Price cap beyond 2023

BEIS has published its energy retail strategy. This describes how, by setting a framework that incentivises energy companies to innovate for and engage with their customers, BEIS will work with the market to journey to a net-zero energy system. Alongside the strategy, BEIS also published a letter announcing proposals to enable future extensions of the Energy Price Cap beyond 2023, if needed.
BEIS, 23 July 2021

Consultation on future energy system operator

A joint BEIS and Ofgem consultation on proposals for an expert, impartial Future System Operator (FSO) with responsibilities across both the electricity and gas systems, to accelerate progress towards net zero while maintaining energy security and minimising costs for consumers. Consultation ends: 28 September 2021.
BEIS, 20 July 2021

Consultation on Design and Delivery of the Energy Code Reform

A joint BEIS and Ofgem consultation seeks responses on a proposed institutional governance framework for the energy codes. The consultation also seeks opinions on: detailed elements of the proposals that were not addressed in the previous consultation; and the impact assessment which sets out some of the estimated costs and benefits of the proposed reforms. Consultation ends: 23.45 on 28 September 2021.
BEIS and Ofgem, 20 July 2021

Consultation on Design of the Energy Company Obligation

A BEIS consultation on its proposed amendments to the Energy Company Obligation (ECO) scheme for the next scheme (ECO4), due to begin in April 2022. Consultation ends: 23.45 on 31 August 2021.
BEIS, 20 July 2021 

Transitioning to a net zero energy system: smart systems and flexibility plan 2021

BEIS and Ofgem have published the Smart Systems and Flexibility Plan, which sets how the UK will transition to a smart, flexible, decarbonised energy system.
BEIS & Ofgem, 20 July 2021 

Ofgem issues consultation on proposed changes to the development of offshore energy networks

Ofgem has published a consultation on the Offshore Transmission Review. The consultation focuses on three work streams of the review including; Early Opportunities, Pathway to 2030, and the Multi-Purpose Interconnectors. The consultation closes on 8 September 2021.
Ofgem, 14 July 2021

Consultation on Access and Forward-looking Charges Significant Code Review

A consultation highlighting Ofgem's minded-to proposals relating to fast-tracked areas of the Access and Forward-looking Charging Significant Code Review, including proposals for: distribution connection charging, definition and choice of access rights, and transmission charging for small distributed generation. Consultation ends: 25 August 2021.
Ofgem, 30 June 2021

Consultation on Consolidated Segmental Statement

A consultation highlighting final proposals on various aspects of the Consolidated Segmental Statement including scope, auditing and additional information. Consultation ends: 11 August 2021.
Ofgem, 30 June 2021

Energy Storage
Call for evidence on facilitating the deployment of large-scale and long-duration electricity storage

A BEIS call for evidence on barriers to the deployment of large-scale and long-duration electricity storage, and on different strategies for supporting the deployment of these technologies. Consultation ends: 28 September 2021.
BEIS, 20 July 2021

Net Zero
Consultation outcome: Enabling a high renewable, net zero electricity system

A Government response to the BEIS December 2020 consultation on the design of its renewable support schemes, published alongside the call for evidence on facilitating the deployment of large-scale and long-duration electricity storage (see Energy Storage above). 
BEIS, 26 July 2021

Strategy and Action Plan published on digitalising Britain's energy system for net zero

The Energy Digitalisation Strategy for digitalising the Great Britain energy system to encourage innovation, decrease bills and drive decarbonisation. The strategy has three core areas of focus: providing leadership and coordination; ensuring regulation and policies incentivise digitalisation; and collaborating with the sector to develop digital tools and infrastructure.
BEIS, Ofgem & Innovate UK, 20 July 2021

Joint call for evidence on decarbonisation readiness

A joint BEIS and Welsh Government consultation seeks views on an expansion to the 2009 Carbon Capture Readiness requirements for power plants. Consultation ends: 22 September 2021.
BEIS & Welsh Government, 14 July 2021

Scottish Real Estate
Scottish Building Regulations - Proposed Changes to Energy Standards and associated topics

A Scottish Government consultation proposes changes to energy standards within Scottish building regulations, including related topics such as ventilation and overheating. It also sets out proposals for the installation of electric vehicle charge points in parking spaces for new residential buildings and new and existing non-residential buildings. Consultation ends: 15 October 2021.
Scottish Government, 23 July 2021

Domestic Energy Performance Certificates (EPC) reform: consultation

A Scottish Government consultation setting out proposals to change the Energy Performance Certificates (EPC) format leading on from proposals set out in the draft Heat in Buildings Strategy to reform the EPC framework.
Scottish Government, 23 July 2021

Ofwat consults on the 2024 water sector price review (PR24)

Ofwat has issued a paper, PR24 and beyond: Creating tomorrow, together, inviting contributions and submissions from the water sector. The paper outlines Ofwat's initial views on the framework for PR24 and future price reviews which ultimately aims to create value for customers, communities and the environment.  

Our article outlines the four key themes that will feature in PR24 and Ofwat's thinking behind them.

Business retail market: Customer bad debt – Decision and consultation

An Ofwat report, following a consultation in March 2021 on the business retail market and customer bad debt, setting out Ofwat's decisions concerning the 2% threshold, the form of regulatory protection, and the sharing parameters and the steps Ofwat plans to implement its decisions.
Ofwat, 26 July 2021

Ofwat consultation on regulatory reporting requirements for new appointees in 2021-22

A consultation on the regulatory reporting requirements for new appointees in the 2021-22 reporting year follows a previous consultation on the monitoring and reporting approach for new entrants to the water sector (new appointees). Consultation ends: 30 August 2021.
Ofwat, 13 July 2021

Key Contacts

Richard Goodfellow

Richard Goodfellow

Head of IPE and Co-head of Energy and Utilities
United Kingdom

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Anna Sweeney

Anna Sweeney

Principal Knowledge Lawyer, Projects & Infrastructure

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