Regulatory Timeline: Gas and Electricity

“The Energy Act continues to drive a huge amount of regulatory change in the energy industry with measures aimed at balancing security of future energy supply, upgrading infrastructure and protecting consumers, while supporting the decarbonisation of the economy.”

5 March 2015 – Capacity Market consultation

Deadline for responses to Government consultation on revisions to the Capacity Market Rules. The consultation covers proposals on:

• the definition of double subsidy in the Capacity Market Rules to remove the exclusion of organisations in receipt of certain research grants;
• the requirements to demonstrate eligibility for refurbishing status during pre-qualification;
• the appropriateness of the current tools for ensuring delivery;
• the participation of aggregated generation CMUs under 50MW;
• the timing of posting credit cover; and
• other technical amendments that seek to clarify the policy intent.

It is anticipated that Ofgem will consult on these during April 2015 and any amendments will be made in advance of July 2015.

13 March 2015 – Consultation on changes to the Domestic and Non-Domestic Renewable Heat Incentive

Responses to the Government consultation on proposed amendments to the Domestic and Non-Domestic Renewable Heat Incentive (RHI) Schemes are due by 13 March 2015. The changes would allow additional financing options, for example:

• in relation to the Domestic Scheme, by allowing third party organisations to contribute to the upfront costs of purchasing and installating the renewable heating system, in exchange for all or a proportionate share of the Domestic RHI payments; and
• in relation to the Non-Domestic Scheme, by enabling the scheme administrator to make payments directly to third parties.

18 March 2015 – Ofgem review of electricity connections market

Deadline for a consultation on the findings published by Ofgem in its review of the electricity connections market. The review looked at how competitive the market is, barriers to competition and necessary improvements .

Ofgem stated that, “While we have seen more progress over the last five years to increase competition, the network company remains the sole provider for a number of key parts of the connections process. The differences in how these services are provided across GB is another barrier identified.”

The consultation seeks views on the proposed next steps that distribution network companies must take within the next six months to help improve competitiveness.

27 March 2015 – CfDs

Last day for Contracts for Difference (CfDs) to be signed by successful applicants. Successful applicants should note the provisions of the Non Delivery Disincentive, which is reflective of the Government’s intention that successful CfD applicants commit to the CfD.

29 March 2015 – Green Hydrogen Standard: call for evidence

Hydrogen produced from low carbon sources may have significant potential as a fuel for transport, heat and power generation. Developing an industry-led standard for low carbon hydrogen could help develop a market for it among consumers specifically seeking ways of reducing their carbon footprint. DECC is working with industry to develop this standard and has issued a call for evidence on what constitutes ‘green’ in the context of this standard, which closes on 29 March 2015.

30 March 2015 – Tackling Non-Financial Barriers to Gas CHP

DECC call for evidence closes in relation to barriers to deployment of gas CHP and on the effectiveness of a range of potential measures to address those barriers.

31 March 2015 – Renewables Obligation

Further to the Renewables Obligation Closure Order 2014, no further ROCs for the generation of electricity by new solar projects with a total installed capacity of 5MW or above may be issued after 31 March 2015.

The draft Renewables Obligation Closure (Amendment) Order (the Amendment Order), which is expected to come into force imminently, proposes two potential grace periods that are intended to protect an applicant where either: the DNO is delayed in connecting the facility to the grid, or the applicant had committed a significant financial investment to the project, assessed at 13 May 2014. These require an application with the submission of specific supporting evidence to Ofgem. The Amendment Order also recognises that a grace period may be afforded where preliminary accreditation was obtained on or before 13 May 2014. Each grace period affords successful applicants an additional 12 months to obtain RO accreditation, taking the deadline for full accreditation to 31 March 2016.

31 March 2015 – Feed In Tariffs

Government response to Consultation on the transferability of rooftop Feed In Tariffs (FITs) accredited installations expected.

31 March 2015 – Proposed Licence changes to enhance the role of the system operator

Ofgem is expected to launch a consultation on licence modifications to introduce changes to the system planning and delivery arrangements for the GB electricity transmission infrastructure, so that they work better for both existing and future consumers.

31 December 2015 – Offshore Transmission Owner competition rounds update

Ofgem expects to announce the preferred bidders for the Westermost Rough and Humber Gateway offshore windfarms in 2015. The shortlisted bidders will go through to the final bid stage where Ofgem will appoint the Offshore Transmission Owner (OFTO) for each project, who will be granted a licence to own and operate the transmission links to the two offshore farms. The OFTOs will receive a guaranteed revenue stream for 20 years under the terms of their licence, subject to availability of the assets.