by Hardwick Legal | Dec 23, 2020 | Purpose Built (LexisNexis)
<article><section><p>Energy Law analysis: Ofgem has been reviewing its approach to supplier licensing, with the aim of improving suppliers’ financial resilience and enhancing customer protections. Having consulted on the proposed changes earlier this year, Ofgem confirmed on 26 November 2020 that it would introduce a package of reforms relating to energy suppliers’ ongoing regulatory requirements and arrangements for their exit from the energy supply market. In this analysis, Louise Dalton and Thomas Forman of CMS Cameron McKenna Nabarro Olswang consider the key principles of the package of reforms and what these mean for energy lawyers.</p></section></article><section><section></section></section><h2>Original news</h2><p>Ofgem releases its decision on the new approach to supplier licensing, <a href="https://www.lexisnexis.com/uk/lexispsl/energy/document/412012/linkHandler.faces?psldocinfo=Supplier_Licensing_Review_ongoing_requirements_and_exit_arrangements&ps=null&bct=A&homeCsi=0&A=0.22482118652623895&urlEnc=ISO-8859-1&&remotekey1=DIGEST-CITATION(LNB%20News%2027/11/2020%2015)&remotekey2=All%20Subscribed%20Current%20Awareness%20Sources&dpsi=0S4D&cmd=f:exp&service=QUERY&origdpsi=0S4D" title="References to">LNB News 27/11/2020 15</a>.</p><p><em>The Office of Gas and Electricity Markets (Ofgem) has published its decision regarding the new approach to undertake for supplier licensing. The reforms aim to encourage further responsible risk management, to enhance governance and accountability, and to improve market oversight. It follows two consultations, one undertaken in October 2019 on the requirements for active suppliers and exit arrangement and another one held in August 2020 on Ofgem’s policy proposals. The new requirements are to take effect from 22 January 2020, and the Customer Supply Continuity Plans requirement on 18 March 2021. Views can be submitted until 22 January 2021 on the Financial Responsibility Principle guidance found in the Appendix 3 of the decision.</em></p><h2>What are the key principles of the reforms?</h2><p>These reforms will take effect through changes to electricity and gas supply licence conditions. The changes are intended to promote more responsible risk management, improve governance and accountability, increase Ofgem’s ability to oversee energy supply markets effectively and reduce the cost burden and disruption caused when suppliers exit the market. Guidance has been published to accompany two of the proposals, the Financial Responsibility principles and milestone assessments. Ofgem is also considering further reforms on other aspects of market regulation in 2021. The reforms put forward by Ofgem should be considered together as a package and will function </p>
Source: LexisNexis Purpose Built
Supplier Licensing Review—ongoing requirements and exit arrangements
by Hardwick Legal | Dec 22, 2020 | Purpose Built (LexisNexis)
<section><p><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">Environment analysis: Beth Bradley and Rachel Hoyland, partner and senior associate at Hill Dickinson, discuss the legal framework surrounding the decarbonisation of </span><a id="ORIGHIT_1" name="ORIGHIT_1" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><a _.hitnav="Y" name="HIT_1" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">shipping, </span><a id="ORIGHIT_2" name="ORIGHIT_2" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><a _.hitnav="Y" name="HIT_2" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">net </span><a id="ORIGHIT_3" name="ORIGHIT_3" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><a _.hitnav="Y" name="HIT_3" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">zero </span><a id="ORIGHIT_4" name="ORIGHIT_4" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><a _.hitnav="Y" name="HIT_4" style="font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;"></a><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">shipping pledges and the impact of Brexit on decarbonising efforts.</span><br></p></section><section><section><h2><mark id="CITEID_911284"></mark>What is the legal framework surrounding decarbonising of <a id="ORIGHIT_5" name="ORIGHIT_5"></a><a _.hitnav="Y" name="HIT_5"></a>shipping? How much of the world’s emissions stem from <a id="ORIGHIT_6" name="ORIGHIT_6"></a><a _.hitnav="Y" name="HIT_6"></a>shipping?</h2><p>In 2018, 2.89% of the world’s human generated greenhouse gas (GHG) emissions came from <a id="ORIGHIT_21" name="ORIGHIT_21"></a><a _.hitnav="Y" name="HIT_21"></a>shipping with 1,076 million tonnes of emissions being produced by the industry, a 9.6% increase from the last reported position of 977 million tonnes in 2012 (the fourth International Maritime Organisation (IMO) GHG Study, August 2020).</p><p>At international level, decarbonisation of the <a id="ORIGHIT_22" name="ORIGHIT_22"></a><a _.hitnav="Y" name="HIT_22"></a>shipping industry is regulated by the IMO, the division of the United Nations responsible for <a id="ORIGHIT_23" name="ORIGHIT_23"></a><a _.hitnav="Y" name="HIT_23"></a>shipping. In 2018 the IMO set goals in relation to decarbonisation of the industry and adopted an Initial Strategy to accomplish its aims. It is now developing regulations which will drive the industry to meet those goals. However, while <a id="ORIGHIT_24" name="ORIGHIT_24"></a><a _.hitnav="Y" name="HIT_24"></a>shipping is often excluded from national level regulations on the basis that it is a global industry, there is nothing to stop states developing their own decarbonisation goals and regulations applicable within their territories and to <a id="ORIGHIT_25" name="ORIGHIT_25"></a><a _.hitnav="Y" name="HIT_25"></a>ships flying their flag.</p><p>Indeed, the EU recently voted to include <a id="ORIGHIT_26" name="ORIGHIT_26"></a><a _.hitnav="Y" name="HIT_26"></a>shipping emissions in the EU ETS, meaning that, from 1 January 2022, many <a id="ORIGHIT_27" name="ORIGHIT_27"></a><a _.hitnav="Y" name="HIT_27"></a>ships calling in the EEA to load or discharge cargo or passengers will be obliged to pay for CO2 emitted. This is a decision which has been welcomed in some quarters, on the basis that it will accelerate decarbonisation of the industry, and criticised in others, on the basis that it may undermine internationally co-ordinated efforts to regulate emissions </p></section></section>
Source: LexisNexis Purpose Built
Shipping and net zero
by Hardwick Legal | Dec 22, 2020 | Purpose Built (LexisNexis)
<article><section><p>Energy Law analysis: On 14 December 2020, the Department for Business, Energy and Industrial Strategy (BEIS) <a href="https://www.lexisnexis.com/uk/lexispsl/energy/document/281955/61HH-1X53-GXFD-81YF-00000-00/BEIS-publishes-White-Paper-on-powering-UK%E2%80%99s-net-zero-future">published the long awaited Energy White Paper</a>. The White Paper seeks to build on existing policy commitments set out in the Prime Minister’s ten-point plan for a Green Industrial Revolution and the National Infrastructure Strategy and presents a vision of how the UK intends to make the transition to net zero by 2050. BEIS estimates that the measures in the White Paper could reduce emissions across power, industry and buildings by up to 230MtCO2e in the period to 2032 and support up to 220,000 jobs per year by 2030. In this analysis, Michelle Davies, Jean Pascal Boutin and Simon Davies of Eversheds Sutherland consider some of the key measures announced in the White Paper and their expected impact on the energy sector.</p><h2>What were the key measures announced?</h2><p>Set within the context of three distinct themes, <strong>Energy Transition</strong>, <strong>Green Recovery from Coronavirus (COVID-19)</strong> and <strong>Consumer Protection</strong>, the <a data-sf-ec-immutable="" href="http://www.gov.uk/government/publications/energy-white-paper-powering-our-net-zero-future" target="_blank" title="Opens in a new window">Energy White Paper</a> contains a wide raft of proposals and commitments, which are at various stages of development and implementation. Furthermore, a number of these measures are subject to separate consultations/industry calls for evidence or reiterate commitments that had already been announced publicly. Set out below are a selection of the key measures announced, each of which are expected to have a significant impact on the energy sector:</p><ul><li><strong>renewable power generation</strong>: BEIS is targeting 40GW of offshore wind by 2030, including 1GW floating wind, alongside the expansion of other low-cost renewables technologies. This ambitious target is a fourfold increase on 2020 capacity and set to be further supported by the Contract for Difference (CfD) scheme. This reiterates the strategic importance of offshore wind as a renewable technology which can drive deep reductions in carbon emissions at a low cost, although the government is also re-opening the CfD scheme to onshore wind and solar PV generation projects for the </li></ul></section></article>
Source: LexisNexis Purpose Built
The Energy White Paper—powering our net zero future
by Hardwick Legal | Dec 4, 2020 | Purpose Built (LexisNexis)
<p>Last week Ruth Jaun, a Lexis Energy PSL, gave a presentation at a Young UKELA seminar on the basics of Renewable Energy. During the seminar Ruth provided a comprehensive overview of the UK market and regulatory framework for renewable energy, as well as insight into the key recent developments in the sector. The event provided an excellent introduction for anyone who is new to energy law, or those keen to learn more about recent developments in this practice area. </p><h2><strong>What is renewable energy?</strong></h2><p>Defined in the <a href="https://www.lexisnexis.com/uk/lexispsl/energy/docfromresult/D-WA-A-CCAY-AUUU-MsSWYWC-UUW-UZEYAAUUW-U-U-U-U-U-U-AZUEVCZVUW-AZUDUBDWUW-WZWADBEBD-U-U/1/linkHandler.faces?psldocinfo=Renewable_Energy_Directive_2009_28_EC_snapshot&linkInfo=F%23GB%23EU_DIR%23num%2532009L0028%25&A=0.9410177280484586&bct=A&risb=&service=citation&langcountry=GB">Renewable Energy Directive</a> (RED) as ‘energy from renewable non-fossil sources’, renewably generated energy includes energy which is conventionally generated (such as wind, solar and hydropower) as well as less mainstream sources (ex: aerothermal, geothermal or biomass). <br></p><p>The RED definition was transposed into UK legislation via the <a href="https://www.lexisnexis.com/uk/lexispsl/energy/docfromresult/D-WA-A-WW-WW-MsSWYWC-UUA-UZEYAAUUW-U-U-U-U-U-U-AZUEVCYEZC-AZUDUBEDZC-WZWADZZDZ-U-U/1/linkHandler.faces?psldocinfo=Renewable_Energy_Directive_2009_28_EC_snapshot&linkInfo=F%23GB%23UK_SI%23num%252011_243s_Title%25&A=0.7353720950992103&bct=A&risb=&service=citation&langcountry=GB">Promotion of the Use of Energy from Renewable Sources Regulation 2011</a>. Although RED has since been recast, the new Directive will not come into force until after the end of the Brexit transition period. <br></p><p>As of 2019, renewable energy made up around 31.7 % of electricity generation in the UK, with the highest contributions from onshore and offshore wind and bioenergy (including biogas and energy from waste). Ruth noted that while this number is not insignificant, it will need to increase as part of the steps the UK is taking to become carbon neutral by 2050, a target enshrined in the Climate Change Act 2008. </p><p><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">Aside from the UK government’s legally binding commitment to carbon neutrality, investments in this sector are also being driven by consumer and stakeholder pressure, a trend which was compounded by the COVID-19 pandemic and the resulting drop in industrial demand for fossil-fuel sourced energy.</span><br></p><h2><strong>The renewable energy market and regulation in the UK</strong></h2><h2><strong></strong></h2><p>During her lecture Ruth also provided a high-level overview of the key participants in the energy sector, including:</p><ul><li><strong>Energy sector regulators</strong>, namely GEMA whose functions are performed through Ofgem. Ofgem administers many of the renewable electricity subsidy schemes discussed further below</li><li><strong>Energy generators</strong>, who own, finance and operate renewable energy generation plants </li><li><strong>Participants in the transmission system</strong>, which take high voltage electricity from where it is generated to where it is needed. Energy transmission can happen through onshore networks, which are owned and maintained by district-specific TOs (ex: National Grid TO for England and Wales) or offshore transmission systems, for which ownership is appointed by c</li></ul>
Source: LexisNexis Purpose Built
Renewable energy – what is it and where is it going?
