Energy And Water Need To Know - December 2021 / January 2022

EMR DB seeks feedback on methodology for Capacity Market de-rating factors

The Electricity Market Reform Delivery Body (EMR DB) has published a consultationconcerning changes to the methodology used to calculate Capacity Market de-ratingfactors for some embedded conventional generation technologies. The consultation looksat the input assumptions to the modelling and the methodology to calculate de-ratingfactors for reciprocating engines and energy from waste generating technologies.
Consultation ends: 17 February 2022.
EMR DB, 26 January 2022

BEIS letter confirms Capacity Market auction parameters for T-1 and T-4 auctions

A letter has been sent by the Secretary of State for Business, Energy and IndustrialStrategy confirming adjustments to the Capacity Market auction parameters for the T-1auction for the 2022–2023 and the T-4 auction for the 2025–2026 delivery years. For the T1auction, BEIS has confirmed a target volume of 5.361GW while for the T-4 auction, the settarget volume is 42.1 GW. Updated Capacity Market auction guidelines have also beenpublished by National Grid ESO.
Department for Business, Energy and Industrial Strategy (BEIS), 25 January 2022

Contracts for Difference and Capacity Market scheme update 2021

An annual update to Parliament on the progress made by government on the policymechanisms implemented under the Electricity Market Reform programme.
BEIS, 14 December 2021

Capacity Market: new technologies 2021 – consultation outcome

A summary of responses to the BEIS' request for information about emerging generatingtechnologies which:

• are capable of contributing to security of supply;
• are not already a Generating Technology Class; and
• may be eligible to participate in future capacity market auctions.

BEIS, 1 December 2021

BEIS issues update on the T&S

TRI business model BEIS has published an update building on previous Transport and Storage (T&S) businessmodel publications and provides further details on the T&S Regulatory Investment (TRI)model. The January 2022 update also includes an indicative Heads of Terms document.
BEIS, 7 January 2022

Consultation outcome: Electric vehicle smart charging

The Department for Transport and Office for Zero Emission Vehicles has published the finaloutcome of its consultation on electric vehicle smart charging. The outcome sets out thegovernment’s response and policy proposals.
The Department for Transport and Office for Zero Emission Vehicles, 21 December 2021

The Electric Vehicles (Smart Charge Points) Regulations 2021 (SI 2021/1467)

The purpose of this instrument is to introduce regulations which require domesticand workplace electric vehicle (EV) charge points to include smart functionality. It will alsomandate that these charge points must meet specified cybersecurity requirements andoperate in certain ways to protect the stability of the electricity grid and to protectconsumers. The regulations come into force on 30th June 2022.
Explanatory Memorandum

The Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2021 (SI2021/1455)

This instrument coming into force on 7 February 2022 makes various technical andoperational amendments to the UK Emissions Trading Scheme. The Instrument amendsthe 2020 Order and includes a small number of further scheme improvements, followingtargeted consultation with affected parties. Provision is made for installations in the hospitaland small emitter opt-out scheme to apply to increase their emissions targets; forinstallations that exceed the thresholds for that opt-out scheme and the ultra-small emitteropt-out scheme to benefit from free allocation when returning to the main scheme; tocorrect the methodology for calculating the entitlement to free allocation of certain aircraftoperators; and to clarify the rules for the use and reporting of aviation biofuels.
Explanatory Memorandum

Towards a market for low emissions industrial products: call for evidence

A consultation seeks evidence on the design and implementation of policies that canencourage the market for low emissions industrial products to grow. Consultation ends: 28February 2022.
BEIS, 6 December 2021

The Renewable Transport Fuel Obligations (Amendment) Order 2021 (SI 2021/1420)

This instrument increases the Renewable Transport Fuel Order (RTFO Order) obligationlevel in article 4 by a total of 5 percentage points in the period up to 2032, and updatesthe sustainability and greenhouse gas emissions criteria that renewable fuels must meetto receive Renewable Transport Fuel Certificates. In force: 1 January 2022.
Explanatory Memorandum

The Green Gas Support Scheme Regulations 2021 (SI 2021/1335)

These Regulations establish the Green Gas Support Scheme (GGSS) which is a schemeto facilitate and encourage renewable generation of heat by the production of biomethaneby anaerobic digestion for injection into the gas grid. The scheme provides support forbiomethane producers through a tariff based mechanism, and is funded by levy paymentscollected from licensed gas suppliers. In force: 30 November 2021.
Explanatory Memorandum

Ofgem publishes green gas levy guidance

This guidance outlines Ofgem’s administration of the Green Gas Levy (GGL). Within thedocument Ofgem have provided details of the obligations for new, current and formerlicenced gas suppliers and this supersedes the version published in November 2021.
Ofgem, 26 January 2022

Recovering the costs of heat networks regulation

A BEIS consultation sets out its proposed approach to recovering the costs of heatnetworks regulation. Consultation ends: 16 February 2022.
BEIS, 29 December 2021

Consultation outcome: Heat networks: building a market framework

BEIS has published a summary of responses to its February 2020 consultation stating theywill continue to engage with industry and consumer groups as they advance the policy andissues emerge. The department will consult further on the policy proposals for secondarylegislation. We will be publishing an article on this development shortly so watch this space.
BEIS, 29 December 2021

£5 million funding to produce hydrogen from biomass

On 12 January 2022, the UK Government launched a new programme to help developinnovative technologies to produce hydrogen gas from sustainable biomass andwaste. This will, if it proves successful and commercially viable, give owners and investorsin biomass and waste plants such as anaerobic digestion plants a 'net-zero' revenuestream as an alternative to biogas and biomethane. In our article, we take a look at whatfunding is available and what technologies can apply.

Call for evidence: Hydrogen and carbon capture in Scotland

A Scottish Affairs Committee call for evidence as part of its inquiry into hydrogen andcarbon capture in Scotland. The Committee seeks evidence on Scotland's role in hydrogenproduction including opportunities for carbon capture utilisation and storage. Consultationends: 1 March 2022.
Scottish Affairs Committee, UK Parliament, 6 January 2022

Enabling or requiring hydrogen-ready industrial boiler equipment: Call for evidence

A BEIS call for evidence to provide insight on the development of possible options relatingto hydrogen-ready industrial boiler equipment. It covers: the definition of hydrogen-ready;whether such equipment would enable cheaper and faster fuel switching; if governmentshould encourage hydrogen-ready boiler equipment; and the role of the supply chain andhow to exploit the economic opportunities. Consultation ends: 14 March 2022.
BEIS, 20 December 2021

Nuclear Safeguards (Fees) Regulations 2021 (SI 2021/1406)

These Regulations come into force on 1st April 2022 and provide details of when and bywhom fees are payable in relation to the functions performed by or on behalf of the Officefor Nuclear Regulation (ONR) in connection with nuclear safeguards under or in connectionwith The Nuclear Safeguards Act 2000, the Nuclear Safeguards Regulations and the 2013Act on or after this date.
Explanatory Memorandum

NAO report on the decommissioning of the AGR nuclear power stations

A National Audit Office (NAO) report examines whether the outcome of the Department forBusiness, Energy and Industrial Strategy’s negotiations with EDF Energy, and subsequentpreparations for defueling and deconstruction, are likely to lead to better value for moneywhen decommissioning the Advanced Gas-cooled Reactor (AGR) fleet.
NAO, 28 January 2022

UK Government confirms £100m of funding for continued development of Sizewell C

Plans to build a new nuclear power plant in the UK have been backed by £100 million ofgovernment funding to support the continued development of the Sizewell C project inSuffolk. The funding commitment will be used to continue the development of the projectwhich will aim to attract further financing from private investors and/or government. It isexpected Sizewell C could produce 3.2 GW of electricity powering the equivalent of around6 million homes, providing increased longer-term energy resilience.
BEIS, 27 January 2022

Radioactive wastes from fusion energy: preliminary position paper

A policy paper on the implications for decommissioning, radioactive waste management,and radioactive waste disposal associated with fusion energy.
Committee on Radioactive Waste Management, 6 December 2021

Nuclear Decommissioning Authority: Draft Business Plan 1 April 2022 to 31 March2025

A Nuclear Decommissioning Authority's (NDA) consultation seeks views on its draftbusiness plan for April 2022 to March 2025. It sets out what the main activities will be toadvance the NDA's important clean-up and decommissioning work over the next threeyears, and what funding will be available for them. Consultation ends: 31 January 2022.
NDA, 6 December 2021

OGA publish consultation response and new Governance Guidance

The Oil and Gas Authority (OGA) has published its response to its consultation onproposed Governance Guidance, conducted between 20 September and 12 November2021. The response summarises the feedback received and the OGA's responses to thefeedback. The OGA has also published new Governance Guidance, alongside itsresponse.
OGA, 13 January 2022

Designing a climate compatibility checkpoint for future oil and gas licensing in theUK Continental Shelf

A BEIS consultation seeks comments on the design of a new climate compatibilitycheckpoint for new oil and gas licensing in the UK Continental Shelf. Consultation ends: 28February 2022.
BEIS, 20 December 2021

Regulation of energy efficiency in existing nondomestic buildings: call for evidence

A call for evidence seeks evidence of existing approaches to improve the energy efficiencyand drive the conversion of non-domestic buildings to zero emissions heating sources. Thisincludes examples which can operate at the level of individual buildings, building groups orregions. Consultation ends: 21 February 2022.
Scottish Government, 6 December 2021
Scots Law

Ofgem publishes update to Access and Forward-Looking Charges Significant CodeReview

Ofgem has published a further consultation on its key policy areas within the scope of itsAccess and Forward-looking Charges Significant Code Review. This latest consultationdetails Ofgem's updated position in response to the feedback it has previously received andreaffirms the high-level proposals put forward for distribution connection charging andaccess rights. The consultation also outlines that Ofgem no longer intend to direct changesto transmission network use of system charges under the Access SCR, including theapplication of these charges to small distributed generators. Consultation ends: 21February 2022.
OFGEM, 24 January 2022

Building energy market resilience

In response to a rise in global energy prices, Ofgem have published a suite of documentsaimed at: strengthening suppliers’ financial resilience so that they can cope with high andmore volatile energy prices, and potential adjustments to the price cap methodology so thatit can continue to protect consumers at times of high price volatility without creatingunsustainable risks for suppliers.
Ofgem, 15 December 2021

Energy pricing and the future of the Energy Market

The Business, Energy and Industrial Strategy Committee is holding an inquiry on Energypricing and the future of the Energy Market. The Committee’s inquiry on the retail energymarket follows unprecedented surges in wholesale energy prices since the summer andwith a number of firms going out of business.
UK Parliament, 9 December 2021

ScotWind offshore wind leasing outcome

Crown Estate Scotland has announced the outcome of its application process forScotWind Leasing.
Crown Estate Scotland, 17 January 2022

Ofgem guidance updated for feed-in tariffs scheme

Ofgem has updated two guidance documents on the feed-in tariffs (FiT) scheme. The firstconcerns renewable installations whilst the second guidance concerns the duties of licensed electricity suppliers.
Ofgem, 14 December 2021

Community benefits and engagement guidance for onshore wind

Guidance on community benefits and engagement for onshore wind farm developers,communities living in the locality of a wind farm and local authorities.
Department for Business, Energy & Industrial Strategy,13 December 2021

Scottish Budget 2022 to 2023

The Scottish Budget announced in the 2021 Budget:

• £336 million for energy efficiency, and low carbon and renewable heat -cutting emissions, making homes warmer, tackling fuel poverty and creating jobsacross Scotland, including £160 million to support those least able to pay forhome energy improvements and tackle fuel poverty;
• £60 million for large scale heat decarbonisation projects. This will allow theGovernment to double and refocus grants for energy efficiency and heat measures,including heat pumps, open to all households, and drive forward a commitment todecarbonise the heating of one million homes, and the equivalent of 50,000 non-domestic buildings, by 2030.
• £53 million across a range of energy transition and industrial decarbonisation projects,including £20 million in a range of Energy Transition Fund projects in the north-east, toensure Scotland’s energy sector plays a leading role in the development anddeployment of new, low carbon projects and the creation of new, green jobs.

Scottish Government, 9 December 2021

Consumer Scotland (Designated Regulators) Regulations 2021 (SSI 2021/465)

These Regulations specify who is a “designated regulator” for the purposes of section 9 ofthe Consumer Scotland Act 2020 (asp 11) (“the Act”). Consumer Scotland may issue anotice requiring designated regulators to provide information to ConsumerScotland. Regulation 2 specifies the Drinking Water Quality Regulator for Scotland and theWater Industry Commission for Scotland as designated regulators for the purposes ofsection 9 of the Act. In force: 1 April 2022.
Policy Note
Scots Law

Consultation under section 12A of the Water Industry Act 1991 on proposedmodification to Condition C of English water companies' licences

An Ofwat consultation invites comments on its proposal to modify condition C of eachEnglish water company’s Instrument of Appointment (licence). Condition C relates toinfrastructure charges and was intended to apply to agreements made prior to April 2018.As currently worded, the condition might apply in certain other circumstances. Consultationcloses: 11 March 2022.
Ofwat, 27 January 2022

PR14 Review

An Ofwat paper presents its findings on the impact the 2014 price review (PR14) had onthe sector during the 2015-20 period.
Ofwat, 13 January 2022

Net zero principles position paper

An Ofwat position paper sets out expectations in three key areas to guide water companyplanning on net zero. It details Ofwat's expectations for action in relation to net zero targetsetting; scope of action on net zero; and prioritising the reduction of Greenhouse Gas(GHG) emissions.
Ofwat, 6 January 2022

PR24 and beyond: Discussion paper on risk and return

An Ofwat discussion paper provides emerging thinking on its approach to risk and return forthe next price review of water companies in England and Wales in 2024(PR24). Consultation ends: 2 February 2022.
Ofwat, 9 December 2021

Assessing base costs at PR24

An Ofwat consultation outlines its current thinking on its approach to assessing base costs at PR24. It seeks detailed feedback on: principles of PR24 base cost assessment;approach to developing and selecting econometric wholesale base cost models; andimproving the cost adjustment claim process. Consultation ends: 3 February 2022.
Ofwat, 9 December 2021

Proposed approach to funding bioresources activities at PR24

An Ofwat consultation on additional information that companies would be expected toprovide alongside their regulatory reporting for 2021-22 to improve econometric costbenchmarking models and on more detailed proposals for a new approach to howbioresources activities could be funded at PR24. Consultation ends: 10 February 2022.
Ofwat, 9 December 2021

Customer bad debt - Consultation on adjustment to REC price caps from April 2022

An Ofwat consultation seeks views on the proposal to temporarily amend the Retail ExitCode (REC) with effect from April 2022. Consultation ends: 12 January 2022.
Ofwat, 7 December 2021