Draft Electricity Market Reform Delivery Plan published for consultation The government has published a consultation on the level of financial support for renewable energy. The draft EMR Delivery Plan provides details on the support mechanism and draft strike prices for renewables investors, and aims to help incentivise up to £110bn of investment in new electricity infrastructure by 2020. The draft strike prices for renewable energy will apply to onshore and offshore wind, tidal, wave, biomass conversion and solar projects. The consultation closes on 25 September. A final version of the delivery plan will be published in December.
DECC report shows UK energy imports at ‘record levels’ last year A report by the Department for Energy shows that the UK remained a net importer of energy in 2012, with a dependency level of 43% – an increase of 6.9% from 2011 levels. This was accompanied by a fall in primary energy production of 10.7% in 2012 compared to a year earlier, despite consumption rising by 1.7%. The Digest of UK Energy Statistics report shows that renewable energy accounted for 11.3% of total electricity generation in the country in 2012 – up from 9.4% in 2011.
Heavy industry exemptions from ‘green’ policies The government has introduced proposals to allow heavy industry to avoid the costs of long-term, fixed price contracts for green electricity. These proposals are designed to ensure that the UK’s energy intensive industries are not made uncompetitive or forced to move production overseas as a result of rising energy prices. The Department for Business, Innovation and Skills, together with the Department for Energy and Climate Change has opened a consultation about the proposal which will run until 30 August 2013.
Smaller businesses and the energy market This month saw further progress towards creating a fairer energy market for smaller businesses. After pressure from the BCC and other trade associations, the main energy companies are starting to tackle the issue of auto-rollover; the process whereby business are automatically tied into costly long-term deals if they fail to cancel their contract within a set time. British Gas became the first energy supplier to commit to stop selling rollover contracts to business customers. If followed E.ON call for all energy companies to put an end to the practice.
Support for shale gas The UK’s fledgling shale gas industry received a boost this month when the Treasury announced that they plan to introduce a tax regime that will see shale gas producers pay 30 per cent tax on their profits, compared to the 62 per cent that the oil and gas industry has traditionally paid. The Treasury also reiterated plans to force shale gas companies to give local communities at least £100,000 per well in the hope of persuading them to allow fracking to proceed near their homes.
Oil and gas commission established An expert commission will be set up to examine how an independent Scotland could maximise the returns from North Sea oil and gas, the Scottish government has announced. A new paper has set out the SNP administration’s plans for the industry if it secures independence. The commission will be chaired by Melfort Campbell, who co-chairs Scottish Enterprise’s Oil and Gas Industry Advisory Group.
Upcoming developments
- Government announcement on gas storage
- Energy Bill to complete its Parliamentary stages and become an Act of Parliament
- Offshore wind industrial strategy
- Draft nuclear strike price to be published
- Oil & gas review interim conclusions will be published in the autumn
- A final version of the EMR delivery plan will be published in December.
For further information contact Tom Nolan at 020 7654 5824 or [email protected]
