Until 11 November 2020, the Department for Business, Energy and Industrial Strategy (BEIS) is consulting on the draft Ecodesign for Energy-Related Products and Energy Information Regulations 2021. The consultation asks stakeholders to comment on the ecodesign and energy labelling proposals, BEIS's assessment of the costs and benefits and the intended timetable for reviewing the draft regulations after they came into force, noted in each product-specific section.
The Oil and Gas Authority (OGA) recently announced its offer for the award of 113 licences over 259 blocks or part-blocks to 65 companies. Licences were awarded in the OGA's 32nd offshore licensing round, which was launched on 11 July 2019 and closed for applications on 12 November 2019. The 32nd round saw the offer of 768 blocks or part-blocks, with acreage on offer in the Central North Sea, the Northern North Sea, the Southern North Sea and the West of Shetlands.
August 2020 saw the publication of two documents which will have a significant bearing on developments in the oil and gas industry in the next decade and are closely related. The Department for Business, Energy and Industrial Strategy published a response to its consultation on the reuse of oil and gas assets for carbon capture, usage and storage projects, while the Oil and Gas Authority published its final report on UK Continental Shelf energy integration.
The Department for Business Energy and Industrial Strategy is consulting on the proposed Offshore Oil and Gas Exploration, Production, Unloading and Storage (Environmental Impact Assessment) Regulations 2020. The consultation proposes no radical reform to the current environmental impact assessment (EIA) procedures. That said, the consultation proposes detailed changes to the current regulations which, if and when in force, will need to be reflected in developers' EIA procedures.
A recent Technology and Construction Court decision has considered whether energy-from-waste plants fall within the power generation exemption in Section 105 of the Housing Grants, Construction and Regeneration Act 1998. Such plants have a dual purpose of disposing of waste and producing energy, but Section 105 requires a court to determine the "primary activity" on such sites.
Ofgem recently published guidance on its Energy Regulation Sandbox Service. The sandbox is a service that enables innovators to try out new ideas with guidance and support from Ofgem and industry bodies. The changes that Ofgem has announced in relation to the sandbox have widened its remit and provided more flexibility to innovators. The most significant change is that rather than having to meet strict window-based deadlines, innovators can now access the service and submit applications at any time.
Energy Minister Kwasi Kwarteng recently announced a review into the existing offshore transmission regime to address the barriers that the current single radial connection approach presents to the further significant deployment of offshore wind. The review suggests that greater coordination between industry participants – particularly between electricity networks, offshore wind projects and interconnectors – may be possible from 2025 onwards.
The Department for Business, Energy and Industrial Strategy recently ran its Capacity Market consultation on future improvements. Following the consultation, the government will now seek to make the necessary amendments to the Electricity Capacity Regulations and the Capacity Market Rules, before the prequalification window for the T-4 2024/25 and T-1 2021/22 auctions open in Summer 2020.
A recent government consultation proposes a pivot towards support being made available to a wider set of renewable energy technologies – including established technologies such as onshore wind and solar photovoltaics and less established technologies such as floating offshore wind – together with an ongoing commitment to support conventional 'fixed-bottom' offshore wind. This article summarises the consultation's wider set of proposed changes.
The Department for Business, Energy and Industrial Strategy recently launched a consultation titled "Heat Networks – Building a Market Framework" alongside its report on "International heat networks: market frameworks review". The consultation is seeking views on various proposed policy options for the development of a heat networks regulatory framework. The outcome of the consultation remains an area of great interest for the United Kingdom's future development of low carbon heating.
The Oil and Gas Authority (OGA) recently launched a year-long UK Continental Shelf (UKCS) mediation pilot, which aims to test the extent to which mediation can assist in resolving disputes involving licences in the UKCS. The OGA has consistently emphasised that it would prefer to exercise its influencing rather than its regulatory role in assisting the industry to achieve the Maximising Economic Recovery Strategy for the United Kingdom, and sees mediation as a potentially helpful option.
The past 12 months have seen increased efforts by environmental activists to disrupt the business of oil and gas companies (or those associated with them) and draw attention to their campaigns against the use and production of fossil fuels. Public statements by groups such as Greenpeace and Extinction Rebellion suggest that this trend is likely to continue. Two recent cases provide some indication of the extent of any protection which may be sought from the courts in the event of disruption.
The Commercial Court recently decided that the right of non-operators to vote to remove an operator at will in a joint operating agreement (JOA) was not subject to any implied constraints, including good faith. As similar clauses are an option in the Association of International Petroleum Negotiators 2012 Model International JOA and continue to exist in a number of North Sea JOAs, this decision will be of wide commercial interest to operators and non-operators in the oil and gas industry.
The Crown Estate has confirmed that seven offshore wind extension projects will progress to the award of rights following the completion of its plan-level Habitats Regulation Assessment (HRA). Project-specific environmental assessments will be required for each site before the developers seek planning consents under the statutory planning process. Importantly, the plan-level HRA identifies mitigation measures that will be secured.
The Department for Business, Energy and Industrial Strategy (BEIS) recently published its proposals for business models for carbon capture usage and storage (CCUS). The CCUS forms part of BEIS's package of proposed measures to support the decarbonisation of the UK economy, which includes consultations on reusing oil and gas assets in CCUS projects, the regulated asset base model for nuclear and the facilitation of energy efficiency in the electricity system.
The Oil and Gas Authority (OGA) recently published its guidance on handling enquiries according to the Energy Act 2016. The guidance may prove useful to parties which find themselves subject to an enquiry, as it will provide them with an indication of the process that the OGA will follow. However, there are limits on the comfort offered by such an expectation, as the OGA has made clear that it will apply the guidance flexibly.
The Department for Business, Energy & Industrial Strategy (BEIS) recently launched a consultation on proposals regarding the consenting of large-scale electricity storage in England. As the current planning system does not distinguish between standalone and co-located storage technologies, storage developers must consider a number of issues to ensure that the electricity storage facility is consented lawfully. The BEIS's proposals provide much needed clarity in this regard.
Ofgem recently published its decision to launch a significant code review (SCR) into the electricity network access and forward-looking charging arrangements. The decision sets out the scope and guiding principles for the SCR, along with a timeline for the process. The aims of the SCR include encouraging the better use of existing network capacity and minimising future network costs.
Ofgem recently published its 'minded to' decision on its Targeted Charging Review. The decision sets out Ofgem's view that the residual aspect of electricity transmission and distribution network charges should be based on fixed tariffs for different classes of consumer rather than the other options under consideration (eg, usage during periods of peak demand). Ofgem also proposes to remove most of the remaining embedded benefits enjoyed by smaller distribution-connected generators.
Ofgem has published guidance for operators of essential services (OES) in the energy sector. The guidance aims to support OES in meeting their cybersecurity obligations under the Network and Information Systems Directive and the implementing UK law, the Network and Information Systems Regulations 2018. OES must now adhere to a timeline to demonstrate their compliance and work with Ofgem to make any necessary changes.