CM’s back, Easier Exemptions and Everyone wants Net Zero

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I do love watching a good game. The highs and the lows. The oh-so-nears and the nearly-thrown-aways. The cheering of the crowd as they watch their preferred team running towards the end-goal.

As purdah stops play in the House of Commons, all teams retreat and re-plan their strategy for getting through to the next round and we watch, yet again, to see whether we are blue or red, leave or remain, in or out.

Whether the outcome has significant impact on our industry remains to be seen, but it is unlikely that Climate Change will move far from the headlines: the government has ended all support for fracking and the current Chancellor has launched a review into funding Net Zero; in unusual spirit of agreement, the Labour Party have published an Energy Manifesto setting out plans to fast-track decarbonisation and reduce dependency on grid-supplied gas and power.

In the meantime, we cannot put policy-making on-hold indefinitely so as and when it’s possible, the various departments are still releasing consultations and responses. As we move forward into November, still members of the European Union, BEIS has published a partial response into the consultation on the future of Carbon Pricing in the UK.

This basically covers the technical consultation for implementing Phase IV of the EU ETS – not much will change and smaller emitters will still be able to undertake risk-based auditing rather than a full third-party verification.

Note, however, that if we leave the EU without a deal, these legal provisions will become irrelevant and we revert to the plan for a UK carbon tax. We recommend a read of our article What does the new Brexit deadline mean for the EU ETS, with input from carbon traders Redshaw Advisory for a simple explanation of what could happen with this.

In the meantime, the European Commission have approved a decision by the UK.

This is nothing to do with Brexit, but does mean we can get the Capacity Market up and running again. The scheme has been reinstated in its original form which means National Grid will now be collecting supplier payments dating back to November 2018. Hopefully your suppliers continued to bill for capacity market charges but if not, get ready for a year’s worth of back-bills (I don’t know of any suppliers who stopped, but if you are unsure, please ring and we will offer what support we can).

No-one wants to pay third party charges so the energy intensive industries will be relieved to note that government has set out plans to make the environmental levy exemptions easier to access. They held back, however, from lowering the energy intensity threshold or otherwise widening the scheme. With the exception of flour mills, which can now claim the benefits.

If you are not eligible for these exemptions and compensations but would like to reduce energy costs, BEIS are running workshops in London and Glasgow explaining how to access and comply with the CHPQA scheme. We highly recommend these to anyone responsible for, or considering, a CHP installation.

Or maybe your focus is on water efficiency right now? Never knowingly under-innovated, John Lewis has become the first high-street retailer to secure a water self-supply licence. We hope they are looking at how they can bring their own bills down and getting their water audits in place.

But, back to the sports. Whilst none of the home nations managed to lift the rugby union world cup, the proud nation of Wales has a different reason to celebrate. A report published last week by the Welsh Government show welsh generators produced enough renewable energy to meet over half of the nation’s power needs in 2018. In fact, there are nearly 69,000 renewable energy projects in Wales with a combined capacity of 3,900MW. 83% of the capacity is renewable power and 17% renewable heat.

Way to go Wales!

Til next time, if you have any questions, you know where we are.

All the best,

George

For more information, or to download this week’s full report, please log onto the ICON app.