Transcript CCL, ROCs & Other Acronyms

CCL, ROCs & Other Acronyms
AL GORE I
Aspects Covered
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Background – climate change
CCL and ECAs
Renewables Obligation the RO
NFFO, ROCs, LECs, REGOs
CRC – the Carbon Reduction Commitment
Climate Change
Global CO2 emissions
How to tackle climate change
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Reduce man-made CO2 emissions
Reduce fossil fuel burn
Improve efficiency
Encourage renewable forms of energy
Incentives/Penalties
International Efforts
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UN Climate Change Conferences
1997 Kyoto Protocol – binding targets
Bali, Poznan, Copenhagen
‘Road maps’
UK policy and objectives
UK GHG Reduction Policies
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1989 Energy Act - Privatised the ESI - NFFO
2000 Climate Change Programme – CCL
2002 NETA and ROCs
Climate Change Act and Energy Act 2008
Energy Act 2011 – The Green Deal
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CCL - Climate Change Levy April
2001
Applied to energy supplied to
businesses
Charged On ‘taxable commodities’:
Electricity natural gas and other
hydrocarbon gases, coal and coke
Non-taxable commodities:
Oil, road fuel gas, heat and steam
Scheme administered by HMRC
Levels of CCL
• Adjusted by annual inflation
• 2011 rates:
Electricity
Natural gas
Liquid gases
Coal and coke
0.485p/kWh
0.169p/kWh
1.083p/kg
1.321p/kg
Reliefs from CCL
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Domestic consumers and charities are exempt
Good Quality CHP
Renewable electricity generation
Up to 80% relief for ‘sector agreements’
Revenue is recycled – 0.3% reduction in NI
ECA – Enhanced Capital Allowances
April 2001
• ECA Introduced at same time as CCL
• Energy Technology List on the DECC
website
• List is managed by the Carbon Trust for
Govt.
• Effectively a tax relief
• Company can write off whole of capital
cost in first year
Non-Fossil Fuel Obligation 1990
NFFO
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1989 Energy Act – mainly supported nuclear!
Electricity Suppliers obliged to buy tranches
Funded by the Fossil Fuel Levy per kWhe
Emphasis shifted to renewable energies
Replaced by Renewables Obligation in 2001
Renewables Obligation and ROCs
• NETA - new electricity trading arrangements
• Electricity Suppliers obliged to buy increasing
proportions of their supplies from ‘renewables’
• Intially 3% - rise to 15.4% in 2015/6
• Scheme administered by Ofgem who:
1 Accredit ‘renewable generators’
2 Set a ‘Buy-out Price’
3 Issue ROCS and collect/distribute the Buy-out
Fund
ROC banding – Introduced 2009
• Distinguishes between ‘maturity’ of
technologies:
Established Band
- 0.25
Reference Band
- 1.0
Post-demonstration - 1.5
Emerging
- 2.0
Renewable Obligation Certificates
• Awarded to the renewable generator
• ROCs carry a value separate from the
electricity supplied
• Generator can sell direct to a Supplier or put
them up for auction
• Also receive LECs and REGOs
Selling ROCs
• Generator can sell direct or put up for auction
• Auctions conducted monthly by the NFPA
• October 2011 prices have reached £46/MWh
Suppliers – Meeting the Obligation
• A Supplier must meet its obligation each year:
Obligation = Sales (MWh) x ROCs/MWh
Ofgem calculates ROCs/MWh – 0.124 for 2011/2
Suppliers – Meeting the Obligation
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Supplier can meet its obligation by:
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Buying total ROCs obligation
(direct/auction)
Paying a ‘buy-out price’ for its obligation
A mixture of 1 and 2 above
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Buy-out price fixed by Ofgem - £38.69/MWH
for 2011
ROCs - The Buy-out Fund & Recycling
• Ofgem collects monies paid for Buy-outs
• Size of the Buy-out Fund :
(Total UK Obligation-ROCs presented) x Buy-out price
• Recycle Value:
Value = Buy-out Fund/No. of ROCs presented
• Recycling payments made only to those who
Suppliers who presented ROCs
ROCs and Buy-out Recycling
CRC - The Carbon Reduction Commitment
• Applies to large organisations not covered by
Climate Change Agreements
• More than 6,000 MWH through ½ hourly
meters
• Carbon footprint
• Original plan to recycle monies
• Now a simple ‘tax’ at £12 per tonne of CO2