The Energy Bill 2015/2016 - Key Policy Area Fact Sheets Published

On 12 January 2016 the Department of Energy and Climate Change ("DECC") published  fact sheets providing an overview of key policy areas in the Energy Bill 2015/2016 and Keeling Schedules to illustrate how primary legislation would be amended by clauses in the Bill.

The Energy Bill was introduced into the House of Lords on 9 July 2015 and having progressed through the parliamentary process, is due to have its second reading in the House of Commons on 18 January 2016.

The Bill will deliver on the Government’s key energy commitments of:

  • the continued support of development of North Sea oil and gas;
  • allowing local people to have a greater say on new onshore windfarm applications; and 
  • closing the Renewables Obligation scheme to new onshore wind from April 2016.

The fact sheets cover four key areas and can be found at the links below:

1. The Oil and Gas Authority ("OGA") and Wood Review Implementation

The OGA was established as an Executive Agency of DECC on 1 April 2015.  The Energy Bill will formally establish the OGA as an independent regulator, in the form of a government company, charged with the asset stewardship and regulation of domestic oil and gas recovery.  The OGA will be given additional powers including: access to company meetings; data acquisition, retention and transfer; dispute resolution; and sanctions. It''s focus will be on maximising the economic recovery of the UK''s remaining reserves.

2. Fees Schemes for Environmental Regulation of Offshore Oil and Gas;

In line with Government policy, DECC has sought to recover the cost of environmental regulation from industry where this is considered to be a practical option. Following a review of fees schemes relating to the environmental regulation of offshore oil and gas by DECC in Autumn 2014, it was found that whilst the majority of the cost recovery was properly covered, there were elements for which the Secretary of State did not have the requisite legislative power to charge. The Energy Bill seeks to redress these elements and provide the necessary power to charge going forwards, as well as retrospectively validating past charges.

3. Onshore Wind Planning

The Government made a manifesto commitment to decentralise decision making on new onshore wind farms as it believes new wind farms should only get the go-ahead if supported by local people.  Clause 79 of the Energy Bill changes the law  to remove the need for the Secretary of State’s consent for large onshore wind farms (over 50 Mega Watt) under the Electricity Act 1989.  Instead local authorities in England and Wales (or potentially Welsh Ministers in the case of Wales) are the primary decision-makers for planning applications for new onshore wind farms, including those with a capacity greater than 50MW.  The effect of this provision and associated changes is to transfer the consenting of new onshore wind farms into the planning regime in the Town and Country Planning Act 1990.

The measures included within the Energy Bill will work in tandem with the new considerations set out in a written statement by the Secretary of State for Communities and Local Government on the 18 June 2015 which states that local planning authorities should only grant planning permission for onshore wind farm applications if: 

  • the development site is in an area identified as suitable for wind energy development in a Local or Neighbourhood Plan; 
  • and that following consultation, it can be demonstrated that the planning impacts identified by affected local communities have been fully addressed and therefore the proposal has their backing.

4. Onshore Wind Early Closure of Renewables Obligation

The government considers that there is enough onshore wind in the pipeline to meet its aim of 30% of electricity generation from renewable sources by 2020. On 18 June 2015, the Government announced proposals to close the Renewables Obligation (RO) to new onshore wind in Great Britain on 31 March 2016 (a year earlier than previously planned).  The Ministers therefore intend to re-introduce provisions into the Energy Bill to implement these measures.

In an effort to protect investor confidence associated grace period provisions have been proposed which will be re-introduced alongside the RO closure provisions. The grace period provisions are designed to give access to support under the RO to those projects which, as of 18 June 2015, already had: 

  • relevant planning consents
  • a grid connection offer and acceptance of that offer, or confirmation that no grid connection is required; and 
  • access to land rights.

Projects that qualify for the proposed early closure grace period will be able to accredit under the RO up to 31 March 2017, the original RO closure date. Such projects will be able to accredit by 31 March 2018 under one of the existing grace periods for projects affected by a grid or aviation delay provided they also satisfy the eligibility criteria for at least one of those grace periods.

The Keeling Schedules published by DECC on 12 January 2016, to illustrate how primary legislation would be amended by clauses in the Bill, cover the following primary legislation (Schedules accessible from the links below):

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