Transcript UK Initiatives (1)

The Carbon Reduction Agenda
Charles Smith
August 2008
E: [email protected]
Overview
 EU Initiatives
 UK Initiatives
 Scottish Initiatives
 Brodies work in this area
THERE IS AN ENORMOUS AMOUNT GOING ON
EU Initiatives (1)
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January 2008 package
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Draft Renewable Energy Directive
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EU target of 20% renewable energy by 2020 (2005 8.5%)
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Renewable energy covers electricity, heat and transport
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Targets are set for individual member states (UK must rise from 1.3% at
2005 to 15% by 2020: meeting this will be hard)
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The EU-wide target has been shared out among MS using a GDP per
capita calculation
EU Initiatives (2)
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Draft Emissions Trading Directive
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European Union Emissions Trading Scheme (EUETS)
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Third phase to run from 2013-2020
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Aim to cap emissions from regulated installations at 21% below 2005 levels
by 2020
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Central EU allocation of allowances
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More use of permit auctions (100% for the power sector, except for CHP
where free)
EU Initiatives (3)
 80% free allocation for other sectors, but to be reduced by equal
annual amounts to 0% by 2020
 Proposed extension to the aluminium, non-ferrous metals and
chemicals sector
 Third phase eight years long – aim is to provide certainty/stable
carbon market
 Second phase (2008-2012): aviation will be included from 1/1/12
EU Initiatives (4)
 Carbon Capture and Storage (CCS) – proposed Directive
 Aim to remove technical and legal barriers
 Exploration permits for suitable storage sites
 EU legislation to be amended to accommodate CCS, eg IPPC, EIA,
waste and water
 Post-closure liabilities to be addressed – ultimately will rest with
Member States
EU Initiatives (5)
 Revised guidelines on Environmental State Aid (April 2008)
 Guidelines increase the amount of Environmental State Aid which
can be granted
 Generally 10% increase on previous levels
 In some (limited) cases where there has been a competitive bidding
process, 100% State Aid may be granted, ie 100% of the additional
costs beyond “conventional” project cost
UK Initiatives (1)
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The Climate Change Bill
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Currently before Westminster
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CO2 emissions reduction of “at least” 60% on 1990 levels by 2050
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Rolling carbon budgets of five years duration
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Statutory Committee on Climate Change established – will provide advice
and guidance to Government
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Annual “open and transparent” reporting to Parliament
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Bill also introduces paving legislation for carbon reduction trading schemes,
the first of which will be…
UK Initiatives (3)
 The Carbon Reduction Commitment (CRC)
 Will apply to users of more than 6,000 MWh electricity per annum
and which have half-hourly electricity meters – eg banks, high street
retailers, BT, Royal Mail etc
 Auctioning and trading of allowances
 Intended to capture organisations not currently covered by EUETS
 Will not apply to organisations with more than 25% of their
emissions covered by Climate Change Agreements
 Emissions regulated under EUETS will be excluded
UK Initiatives (4)
 Very small sources of energy use will also be excluded – the CRC
requires only that 90% of total emissions are captured
 Will apply to local authorities and hospitals (full details not yet clear)
 Will apply to all central Government departments whether or not
they satisfy the criteria
 Annual auction of allowances – likely price for the first three years of
£12 per tonne of CO2
UK Initiatives (5)
 Auction revenue to be returned to participants based on league table
performance – league table will take account of so-called “early
action”
 CRC to commence 1 January 2010
UK Initiatives (6)
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Energy Bill
Provisions for an offshore transmission licensing regime
UK provisions in respect of carbon capture and storage
Designed to take early action to fit within the UK Government’s CCS
demonstration project (4 projects shortlisted June 2008)
 Reform of the Renewables Obligation (assists renewably-sourced
electricity)
 RO is to be banded
 More or fewer certificates made available according to
commercialisation level of technologies
UK Initiatives (7)
 Work also being done on heat (as opposed to electricity)
 UK Government “call for evidence” – views on the potential for
renewable heat and incentives required to promote it
 Similar activity in Scotland – report from the Forum for Renewable
Energy Development in Scotland
 We need to produce more renewable heat to meet the EU 2020
target for UK of 15% renewable energy
UK Initiatives (8)
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Carbon Emissions Reduction Target – 3 yr programme
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Requires “lifetime” savings of 154 mt CO2
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Replaced the Energy Efficiency Commitment from 1 April 2008
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Obligates electricity and gas suppliers with 50,000 or more domestic
customers – energy efficiency/low carbon measures to be made available
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Effectively doubles activity compared to the EEC
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Low income groups and the elderly are priorities
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Suppliers to achieve at least 40% of their carbon emissions reduction
obligation in those priority groups
Scottish Initiatives (1)
 Commitment to a renewable future
 Nuclear currently ruled out, but additional non-renewable (coal/gas)
capacity also needed, given expected closures in next decade
 Scottish Climate Change Bill consultation closed April 2008
 Target of 80% reduction in greenhouse gas emissions by 2050
 Bill to be published in autumn 2008
Scottish Initiatives (2)
 Renewables Obligation is devolved
 Not expected that RO will be radically different from elsewhere in the
UK, but may be certain differences in bandings
 Carbon Reduction Commitment is supported by the Scottish
Government
 Not expected to differ materially from elsewhere in the UK
Scottish Initiatives (3)
 Targets
 50% of all Scottish electricity (NB, not energy as a whole) generation
to come from renewable sources by 2020
 Interim target of 31% by 2011 (quite possible this will be met)
 Note: electricity is 20% of total energy use, heat nearly 50% and
transport the remainder
Scottish Initiatives (4)
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Planning for sustainable development/renewable energy
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SPP1 (references sustainable development) and SPP6 (renewables)
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Use of planning powers by local authorities to secure low/zero carbon
development – 15% extra CO2 reductions beyond Building Regs 2007 CO2
standard
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100% CO2 reduction for new residential developments by 2016, 60% by
2013, 30% by 2010
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New non-domestic developments to be zero carbon by 2019 (UK Budget
2008)
Brodies work in this area (1)
 Advisory work on law and policy
 Work with a number of public sector bodies on the establishment
and structuring of energy services companies (ESCOs) and on
the use of planning powers in respect of low carbon
development
 Advice on specific projects, eg district heating for a local authority
through an ESCO
 Advice to the ESCO sector on public and private sector projects
 Advisory work on legal issues relevant to carbon capture and
storage
Brodies work in this area (2)
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Project finance work on onshore windfarm developments
Contract work on small hydro developments
Planning and consenting advice on renewables developments
Work for landowners on renewables
Due diligence work on possible acquisitions of renewable asset
portfolios
 Advisory work for banks on carbon offset products
Brodies work in this area (3)
 Our own carbon reduction agenda initiative “Sustain”
 Brodies’ carbon footprint
 Use of paper (double-sided printing, recycled paper)
 Recycling of materials/waste
 Departmental focus groups
 More to follow
The Carbon Reduction Agenda
Charles Smith
August 2008
E: [email protected]