Welcome to our monthly Energy Update, bringing you links to the major developments relevant to the industry.


This month we cover the capacity market auction results, consumer protections against energy price rises, RHI regulations, the good news that CfD auctions will be every year, and more.

Capacity Market
T-1 Capacity Auction final results 2022–2023

The EMR Delivery Body has published the final auction report of the T-1 Capacity Auction for delivery date 2022–2023. The report states that 4,996.224 MW is procured across 226 CMUs and concluded that no CMUs were removed from the system by the National Grid Electricity System Operator.
EMR Delivery Body, 25 February 2022

Provisional report on T-4 Capacity Auction published

The Electricity Market Reform Delivery Body has published the T-4 Capacity Auction provisional results for delivery date 2025–2026. The results, which will remain provisional until confirmed by the Secretary of State on 4 March 2022 show that 42,364.314 MW was procured across 574 CMUs.
EMR Delivery Body, 22 February 2022

Consumer
Decision on short-term interventions to address risks to consumers from market volatility

An Ofgem document describes its decision to introduce two measures which, following its consultation on a range of potential temporary measures to enable domestic suppliers to better manage risks created by current wholesale market volatility, it believes are in consumers' interests. These are: a requirement for suppliers to make all tariffs available to new and existing customers; and a requirement for suppliers to pay a Market Stabilisation Charge when acquiring new customers.
Ofgem, 16 February 2022

Government Support for Energy Bills and the Cost of Living 

HM Treasury has published two factsheets detailing the Energy Bills Rebate and how the Government is providing £12 billion of support to relieve cost of living pressures with millions of households receiving £350 of government aid. The help will be targeted at working families, low-income households and the most vulnerable.
HM Treasury, 3 February 2022

Energy price cap to increase from April 2022

Ofgem has announced that the energy price cap will increase from 1 April 2022 for approximately 22 million customers. 
Ofgem, 3 February 2022

Electric Vehicles
Regulations: electric vehicle smart charge points

The Office for Product Safety and Standards (OPSS) has published guidance for sellers on the regulations covering electric vehicle smart charge points.
OPSS, Department for Business, Energy & Industrial Strategy (BEIS), and Office for Low Emission Vehicles, 3 February 2022

Infrastructure
Revised (Draft) National Policy Statement for Energy: Ninth Report of Session 2021-22

A Business, Energy and Industrial Strategy Committee report welcomes the Government's decision to revise its energy national policy statement (NPS) which will be used to approve the construction of major energy infrastructure projects. This revision comes after it was ascertained that the NPS should explicitly give greater weight to the "urgent" need to build new energy infrastructure that will increase the supply of low-carbon energy within the UK. The report also recommends that the wording of the NPS provide the Secretary of State with flexibility to consider and give consent to new technologies such as hydrogen and carbon capture and storage. It also suggested that the Government "reconsider" its decision to remove onshore wind from the NPS as onshore wind has been identified as a key component in the transition to net zero.
House of Commons Business, Energy and Industrial Strategy Committee, 25 February 2022

Draft Overarching National Policy Statement for Energy: In Focus

A House of Lords Library publication assesses the draft updates for a variety of energy-related national policy statements first introduced in 2011 which provide guidance for those involved in determining development applications for major infrastructure projects. The House of Lords was due to consider the Government's Draft Overarching National Policy Statement for Energy on 22 February 2022.
House of Lords Library, 3 February 2022

International Relations
UK and Belgium sign memorandum of understanding (MoU) on energy cooperation

The United Kingdom’s Minister for Energy Greg Hands and Belgium’s Minister for Energy Tinne Van der Straeten signed an agreement on energy cooperation on 23 February 2022. The memorandum of understanding deepens the UK and Belgium’s bilateral relationship and enables closer working on important energy priorities including: multipurpose electricity interconnection, offshore wind, low carbon hydrogen and carbon capture, usage and storage (CCUS).
Department for Business, Energy & Industrial Strategy, 24 February 2022

Oil & Gas
The Offshore Installations (Safety Zones) Order 2022 (SI 2022/115)

Article 2 of this Order establishes, under the Petroleum Act 1987 s.22, a safety zone having a radius of 500 metres from the specified point around the installation (which is a subsea installation) specified in the Schedule to this Order, stationed in waters to which s.21(7) of that Act applies (these include territorial waters and waters in areas designated under the Continental Shelf Act 1964 s.1(7)).
In force: 1 March 2022.
Explanatory Note

Draft Downstream Oil Resilience Bill: government response to the Business, Energy and Industrial Strategy Committee

The Business, Energy and Industrial Strategy Committee published its Fifth Report of Session 2021–22, Draft Downstream Oil Resilience Bill UK on 12 November 2021 and the government further issued a response by correspondence on 14 February 2022. This document sets out the Government’s response to the Committee.
The Business, Energy and Industrial Strategy Committee, 17 February 2022

Regulation
Energy supply and investment inquiry launched by Economic Affairs Committee

An Economic Affairs Committee inquiry seeks to establish whether the Government's energy strategy is delivering investment in an energy supply that is resilient, affordable and in line with achieving net zero emissions. Consultation ends: 11 March 2022.
The House of Commons Economic Affairs Committee, 10 February 2022

Ofgem publishes decision on strengthening milestone assessments and additional reporting requirements

This document sets out Ofgem's Decision to implement changes to existing rules governing milestone assessments and additional reporting requirements on energy suppliers (covering trade sales/purchases, Relevant Merger Situations and senior personnel changes) having consulted on proposals in December 2021.
Ofgem, 4 February 2022

RIIO-2 documents published by Ofgem

Ofgem has decided to implement the licence modification to the RIIO-2 Transmission, Gas Distribution and Electricity System Operator conditions, following a consultation. The licence modifications will come into effect on 1 April 2022.
Ofgem, 3 February 2022

Renewable Heat
The Domestic Renewable Heat Incentive Scheme and Renewable Heat Incentive Scheme (Amendment) Regulations 2022 (SI 2022/159)

These Regulations which were made on 17 February 2022 make amendments to the legislation concerning both the domestic and non-domestic Renewable Heat Incentive (NDRHI) schemes. The Regulations amend the NDRHI from 1 April 2022, to include:

  • the extension of commissioning deadlines by 12 months for non-domestic RHI technologies with eligible TG2, TG3 and extension applications, from 31 March 2022 to 31 March 2023, except those that would be eligible for the Green Gas Support Scheme (GGSS);
  • amendments to budget management provisions for shared ground loop systems that modify capacity;
  • mandatory annual maintenance checks on biomass boilers are to be carried out to an approved maintenance standard; and
  • updated references in the RHI Regulations 2018 to various standards.

Domestic RHI amendments legislate for the closure of new applications to the main domestic RHI scheme, and to new Metering and Monitoring Service Package applications at midnight at the end of 31 March 2022. The remaining provisions come into force on 1 April 2022.
Explanatory Memorandum

DRHI guide published by Ofgem

Ofgem has published a guide to making an application to the Domestic Renewable Heat Incentive (DRHI). The guide sets out information on applying, eligibility, required documentation and the application process The scheme is set to close to new applicants at midnight on 31 March 2022.
Ofgem, 9 February 2022

Renewables
Government boost for new renewable energy storage technologies

The Government has announced that £6.7 million funding has been awarded to 24 projects across the UK through the Longer Duration Energy Storage competition, to support the development of new energy storage technologies.
Department for Business, Energy and Industrial Strategy, 23 February 2022

Contracts for Difference auctions to be held annually

BEIS has announced that Contracts for Difference (CfD) auctions will be held annually, rather than every two years, speeding up the UK adoption of renewable power and boosting energy security. The change starts from March 2023 when the next CfD round opens.
BEIS, 9 February 2022

Scotland
Sectoral marine plan - offshore wind for innovation and targeted oil and gas decarbonisation: initial plan framework

The Initial Plan Framework (IPF) outlines the process for development of the Sectoral Marine Plan for Innovation and Targeted Oil and Gas (INTOG) Decarbonisation. The IPF also sets out the areas that will be used for future seabed leasing.
Marine Scotland Directorate & Energy and Climate Change Directorate, 22 February 2022

Heat in Buildings - Green Heat Finance Taskforce: terms of reference

The Scottish Government has set out the terms of reference of the Heat in Buildings: Green Heat Finance Taskforce group following the publication of the Heat in Buildings Strategy in October 2021.
Energy and Climate Change Directorate, 9 February 2022

Consumer Scotland Draft Workplan for Energy, Post and Water 2022-23: Consultation

The Energy and Climate Change Directorate has published a consultation paper outlining Consumer Scotland's role in the energy, post and water sectors; and Consumer Scotland's planned work as a consumer advocacy and advice group in these industries.
Consultation closes: 4 March 2022.
Energy and Climate Change Directorate, 2 February 2022

Water
Drainage and wastewater management plans: guiding principles for the water industry

These guiding principles set out the priorities and expectations against which both the governments and regulators will assess the drainage and wastewater management plans (DWMPs).
Department for Environment, Food & Rural Affairs, Welsh Government, Environment Agency, The Water Services Regulation Authority , and Natural Resources Wales, 16 February 2022

Consultation - Changes to the CAW version reference in 2020-25 PCs

An Ofwat consultation seeks opinions on a potential amendment to the reporting requirement for company performance commitments on greenhouse gas emissions/renewable energy, which it set in the final determination of price limits for 2020-25 (PR19). The consultation summarises Ofwat's analysis to date which conveys that there are benefits to moving to an updated version of the UK Water Industry Research's carbon accounting workbook (CAW). Consultation ends: 7 March 2022.
Ofwat, 14 February 2022

Draft eligibility guidance on whether business customers in England and Wales are eligible to switch their retailer

A draft Ofwat consultation document seeks views on proposed changes to its eligibility guidance on whether non-household customers in England and Wales are eligible to switch their retailer. 
Ofwat, 7 February 2022

UK Government announces that Ofwat must ensure that England’s water industry is doing more to protect the environment 

The Government is due to set out its Strategic Policy Statement (SPS), containing its priorities for Ofwat over the next five years. The SPS will confirm the expectation on water companies to be more ambitious in protecting the environment. 
Department for Environment, Food and Rural Affairs, 2 February 2022

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
Leeds

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