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 latest Capacity Market changes, CCUS cluster sequencing, consultation on the new UK ETS and much more.

Capacity Market
Government responds to proposals for improvements to the Capacity Market

The Government has issued a response to the Department for Business, Energy and Industrial Strategy (BEIS) consultation on proposals on incremental and technical improvements to the Capacity Market in 10 areas. The Government has now laid legislation in Parliament to amend the capacity market rules and the electricity capacity regulations inorder to implement the proposals.
BEIS, 21 June 2021

BEIS publishes letter to National Grid ESO with plans to hold Capacity Auctions

BEIS has published a letter it has sent to National Grid Electricity System Operator (ESO) setting out the government’s plans to hold two Capacity Market auctions in 2022. The T-1 auction, for 2022 to 2023, and a T-4 auction, for 2025–2026 in the auction window beginning on 1 September 2021. A letter that considers the auction parameters has also been published.
BEIS, 16 June 2021

CCUS Cluster Sequencing

There are exciting times ahead as the UK government sets out how it will support the first industrial clusters using carbon capture, use and storage. Big emitters of CO2 should apply now to be part of it. We look at how the process works and what financial support is on offer.

Electric Vehicles
Connecting electric vehicle chargepoints to the electricity network

A guide to the electricity connections process for those looking to install electric vehicle charge points at their business or site.
BEIS, 16 June 2021

Emissions Trading
BEIS issues consultation on carbon leakage risk

BEIS is seeking views on the risk of carbon leakage due to the indirect emission cost from the UK Emissions Trading Scheme (ETS) and compensation price support (CPS) mechanism plus feedback on sector eligibility and scheme design. The consultation closes on 9 August 2021.
BEIS, 14 June 2021

Energy Regulation
The Ecodesign for Energy-Related Products and Energy Information Regulations (SI2021 / 745)

These Regulations provide new Ecodesign and Energy Labelling requirements for certain energy-related products that are placed on the market in Great Britain. They update existing Ecodesign requirements to increase the minimum energy performance and set material efficiency of electric motors, household washing machines/washer-dryers, household dishwashers, household refrigeration and electronic displays. The Regulations further introduce Ecodesign requirements which set minimum energy performance and material efficiency standards for welding equipment and commercial refrigeration for the first time. The Regulations also introduce Energy Labelling requirements for commercial refrigeration to enable consumers to discern the most energy efficient products on the market. The Regulations partly came into force on 17 June 2021 and fully on 1 July 2021.
Explanatory Memorandum

Maximising Non-Domestic Smart Meter Consumer Benefits: Consultation onimproving the data offer and enabling innovation

BEIS is seeking views on proposals to help non-domestic smart meter customers save energy and manage costs through use of the data from their smart meters. The proposals would:

  • require energy suppliers to provide non-domestic smart meter customers with regular free information about their energy consumption, based on the data from their smart meter;
  • make it easier for non-domestic customers to share their data with third party innovators (acting with their consent) to support energy saving and net zero initiatives; and
  • make it easier for third parties acting with customer consent to access the data they need to enter the market and deliver services to non-domestic smart meter customers

The consultation ends: 24 September 2021.
BEIS, 5 July 2021

Ofgem consultation on proposal to review competition in the electricity connectionsmarket for RIIO-ED2

An Ofgem consultation is seeking views on its proposed approach to reviewing the level of competition in the electricity distribution connections market, in order to inform its design of RIIO-ED2 connection outputs and incentives. Consultation ends: 13 August 2021.
Ofgem, 18 June 2021

Consultation on changes to Ofgem's Enforcement Guidelines and Sectoral PenaltyStatement

Ofgem is seeking views on the revised versions of its Enforcement Guidelines and the Sectoral Statement of Policy in relation to financial penalties and consumer redress. The responses will help them to ensure that their enforcement processes are relevant and adaptable in the current energy market. Consultation ends: 4 August 2021.
Ofgem, 9 June 2021

Smart Meter Policy Framework Post 2020: Government Response to a Consultationon Minimum Annual Targets and Reporting Thresholds for Energy Supplier

Responding to the BEIS consultation 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, the Government confirms, amongst other things, the extension of the current "All Reasonable Steps" obligation for 6 months to 31 December 2021, with the new Framework commencing on the 1 January 2022.
BEIS, 1 June 2021

Energy Storage
BEIS launches competition for longer duration energy storage projects

BEIS has launched two competitions looking at the development of innovative longer duration energy storage projects. Stream one is for pre-commercial demonstrator grants, whilst Stream two focuses on first-of-a-kind full-system prototypes. A competition event will be held on 17 June 2021 and applicants must register for the competition by 2 pm on 23 July 2021. Full proposals must be submitted by 2pm on 13 August 2021.
BEIS, 7 June 2021

Statutory updates to the Combined Heat and Power Quality Assurance (CHPQA)Standard

The Combined Heat and Power Quality Assurance (Temporary Modifications) Regulations 2021 (SI 2021 / 656) were made on 18 May 2021 and update the definition of the CHPQA Standard in the relevant RO and EPS legislation for 12 months to provide a temporary easement in the certification process for CHP operators directly impacted by COVID-19 to ensure they receive continued financial support. The RHI Modification Regulations make similar changes to the relevant RHI legislation.

The Climate Change Levy (General) (Amendment and Modification) Regulations 2021 (SI2021 / 675) also amend the Climate Change Levy (General) Regulations 2001 (S.I.2001/838) to update references in those Regulations to the Combined Heat and Power Quality Assurance Standard (“CHPQA”) and to certificates issued under it.
Legislation.gov.uk, June 2021

Government launches consultation on Warm Home Discount scheme

BEIS is seeking views on proposals to extend, expand, and reform the Warm Home Discount scheme to 2026. This follows regulations (SI 2021/667) which amend the WHD Regulations to run the scheme until 31st March 2022 and additionally make some amendments to the operation of the scheme. The regulations came into force on 25 June 2021 and the consultation to extend the scheme closes on 22 August 2021.
BEIS, 28 June 2021

BEIS publishes guidance documents for Low Carbon Hydrogen Supply 2Competition

BEIS has published a series of documents providing more information about the Low Carbon Hydrogen Supply 2 Competition. This includes for Stream 1 and Stream 2 and a Stakeholder Engagement Day questions and answers document to provide more information about the competition.
BEIS, 25 June 2021

Statement on bilateral energy relationship issued by the UK / Norway

The UK Secretary of State for Business, Energy and Industrial Strategy (BEIS), Kwasi Kwarteng, and the Norwegian Energy Minister, Tina Bru, held their first in-person meeting in Oslo. The Ministers published a joint statement confirming the importance of the bilateral energy relationship, as both countries recover from the coronavirus pandemic and tackle climate change.
BEIS, 28 June 2021

Council agrees on new rules for cross-border energy infrastructure

The European Council has announced it has reached a general approach on the revision of the Trans-European Networks for Energy (TEN-E) Regulation. The objective of the revised TEN-E regulation is to modernise, decarbonise and interconnect the EU’s cross-border energy infrastructure in order to help the EU achieve its 2050 climate neutrality objectives.
European Council, 11 June 2021

Net Zero
End to coal power brought forward to October 2024

The deadline to phase out coal from Great Britain's energy system has been brought forward by a year, highlighting the UK’s leadership to go further in driving down emissions and tackling climate change.
BEIS, 30 June 2021

CCC 2021 Progress Report to Parliament

The Climate Change Committee (CCC) has published its annual assessment of UK progress in reducing emissions and biennial assessment of progress in adapting to climate change.
Climate Change Committee, 24 June 2021

Net Zero Governance - call for evidence

A Business, Energy and Industrial Strategy Committee inquiry on net zero governance will examine the leadership and co-ordination which will be needed by government to deliver onthe UK’s commitment to reach net zero by 2050. Consultation ends: 27 August 2021.
UK Parliament, 24 June 2021

Great Britain on track for zero carbon electricity periods by 2025

National Grid ESO has announced that Great Britain’s electrical system is on track and will be capable of delivering fossil free carbon emissions for short periods by 2025. This would be a significant enabler in reaching zero carbon electricity generation by 2035.
National Grid ESO, 15 June 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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