Update: Legislation for the period ending 28 November 2008

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LEGISLATION

GOVERNMENT BILLS

There are no relevant Government Bills before Parliament, as at 28 November 2008.

PRIVATE BILLS

There are no relevant Private Bills before Parliament, as at 28 November 2008.

PRIVATE MEMBERS' BILLS

There are no relevant Private Members' Bills before Parliament, as at 28 November 2008.

ACTS

Energy Act 2008

The Energy Act 2008, which received Royal Assent on 26 November 2008, includes provisions relating to (i) gas importation and storage (including carbon capture and storage), (ii) renewable energy (including reform of the Renewables Obligation (RO)) and (iii) the decommissioning of nuclear, offshore renew¬able energy and oil and gas installations.

The updated RO provisions are intended to enable newer renewable technologies to develop, such as offshore wind and tidal power, and will assist in implementing a new regime to provide the necessary infrastructure to trans¬mit electricity from offshore renewables to the onshore electricity supply network through the construction of a European 'sub-sea' grid. Under the updated RO regime, the use of newer renewable technologies will be incentivised over other more established methods. As of April 2009, renewable technologies will be placed in one of four bands, namely: (i)'established' (which is further divided into sub-categories 1 and 2), (ii) 'reference', (iii) 'post-demonstration' and (iv) 'emerging'. So, for example, energy produced from landfill gas (which will fall into category 1 of the 'established' band) will receive 0.25 Renewables Obligation Credits (ROCs)/MWh while tidal barrages and anaerobic digestion (which are categorised as 'emerging' band technologies) will receive 2.00 ROCs/MWh. ROCs generated by these various renewable sources will, as before, be the means by which electricity suppliers meet their given RO targets.

Importantly, the Act also includes a 'feed-in'tariff scheme for small-scale renewable energy projects, which is to be implemented by 2010. This scheme rewards microgeneration of renewable energy (such as mini-turbines fitted to residential houses) by paying a premium for any excess energy generated which is returned to the national grid. By adopting this scheme, the UK will be following in the footsteps of Denmark, Germany, France and Spain.

Climate Change Act 2008

The principal objective of the Climate Change Act, which also received Royal Assent on 26 November 2008, is to place a legal obligation on the Government to reduce carbon dioxide and other greenhouse gas (GHG) emissions in the UK by at least 26 per cent by 2020 and 80 per¬cent by 2050 (against 1990 levels). The Act creates a system of 'carbon budgets', which will set limits on the net UK carbon account. These 'carbon budgets' are to cover a five-year period, the first running from 2008-12. The Secretary of State is under a duty to ensure that the net UK carbon account stays within budget.

The Act also gives the Government the power to create new emissions trading schemes. The first of these is due to come into force in 2010 when the Carbon Reduction Commitment (CRC) is expected to be implemented. This will impose an obligatory emissions trading scheme on large non-energy-intensive companies and organisa¬tions in the UK - such as large offices, retailers, banks, hotels, supermarket chains, rail operators, hospitals and universities. A limit will be placed on the amount of carbon dioxide these companies and organisations can emit every year. If they emit more than they are allowed to, they will have to buy additional carbon allowances and if they emit less, they will be able to sell their surplus allowances to those who have exceeded their caps. The performance of companies subject to the CRC will be ranked in a publicly available 'league table'. Their position will depend upon how well they perform in reducing their emissions. A company's ranking in the 'league table' will also dictate if it receives a bonus or is required to make a penalty payment.

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