Policy context

EU legislation

Draft EU Directive

On 23 January 2008 the European Commission published a comprehensive package of proposals for low carbon energy policy, covering; renewable energy, carbon capture and storage, the EU Emissions Trading Scheme and burden sharing between member states to reduce greenhouse gas emissions.

An agreement was reached in March 2007 to cut greenhouse gas emissions by 20% by 2020 which could increase to 30% if an international agreement on climate change measures post 2012 is reached and source a fifth of Europe's energy requirements from renewable sources by the same date.

The draft directive provides a framework for achieving an EU target of securing 20% of all its energy from renewable sources by 2020. In particular it proposes that the UK sources 15% of all it's energy (covering electricity, hat and transport sectors) from renewable sources by 2020. This is an extremely challenging target, as the UK share in 2008 is less than 2% and lower than all of the major European countries.

Directive http://ec.europa.eu/energy/climate_actions/doc/2008_res_directive_en.pdf
BERR website http://www.berr.gov.uk/energy/sources/renewables/strategy/page43356.html

UK legislation

UK Energy Bill
The energy bill, which should receive royal assent by summer 2008, will implement the legislative aspects of the UK 2007 Energy White Paper. The energy bill, alongside the planning and climate change Bills, is intended to underpin the long-term delivery of the government's energy and climate-change strategy. It will put in place new legislation to enable private-sector investment in carbon capture and storage, and strengthen the renewables obligation to drive greater and more rapid deployment of renewable energy in the UK.

The 2003 Energy White Paper accepted the recommendations of the Royal Commission on Environmental Pollution of a need to stabilise greenhouse gas emissions. It set an aspiration for the UK to reduce carbon emissions by 60 per cent and create a low-carbon economy by 2050. This was restated as a policy goal in the government's 2006 energy review, and the subsequent Energy White Paper, published on 23 May 2007. 

BERR website  http://www.berr.gov.uk/energy/bill/page40931.html

The Climate Change Bill
The Climate Change Bill aims to create a long-term legal framework to reduce the UK's carbon dioxide emissions through domestic and international action by at least 60 per cent by 2050 and 26-32 per cent by 2020, against a 1990 baseline. The bill was presented to parliament in November 2007 and will be passed in 2008.

DEFRA website http://www.defra.gov.uk/Environment/climatechange/uk/legislation/index.htm

Planning Bill
The Planning Bill will implement proposals in the May 2007 Planning White Paper, Planning for a Sustainable Future, to streamline the planning system and introduce a new system for nationally significant infrastructure planning.

CLG website http://www.communities.gov.uk/planningandbuilding/planning/planningpolicyimplementation/reformplanningsystem/planningbill/ /reformplanningsystem/planningbill/ 

Housing and Regeneration Bill
The Housing and Regeneration Bill is intended to drive forward the government's pledge to build three million greener, more affordable new homes by 2020. The bill will require developers to indicate whether a sustainability assessment has been made, and, if it has, provide the information to the purchaser. The assessment would provide an in-depth green rating for new homes, showing how they rate on energy, water and waste. The government has also consulted on its Housing Green Paper, Homes for the Future, which included the launch of an invitation for local authorities and developers to propose new eco-town schemes, designed to reach zero-carbon standards and provide between five and twenty thousand new homes each. 

Bill - http://services.parliament.uk/bills/2007-08/housingandregeneration.html
Green Paper http://www.communities.gov.uk/publications/housing/homesforfuture

UK Government Policy

Building a Greener Future Policy Statement - zero carbon development
In the 2006 energy review the government committed to bring forward new measures to move towards making all new developments carbon neutral. A set of policy measures, including the tightening of building regulations to make all new housing carbon neutral by 2016, was set out in the government's policy statement, Building a Greener Future.  Part L of the building regulations is to be tightened to reduce carbon emissions by an additional 25 per cent in 2010, 44 per cent in 2013, and achieve zero-carbon development by 2016.

Policy statement http://www.communities.gov.uk/publications/planningandbuilding/building-a-greener

The government also announced in the 2008 budget, an ambition for all new non-domestic buildings to be zero carbon from 2019, and new public sector buildings from 2018.
2008 Budget - http://www.hm-treasury.gov.uk/media/4/7/bud08_chapter6.pdf

Planning policy statements
The government has laid out guidance on how the planning system should assess renewable energy projects in Planning Policy Statement 22 (PPS22).
The recent supplement to PPS1, Planning and Climate Change, sets out how planning should contribute to reducing carbon emissions and stablising climate change.  This guidance is a paradigm shift from the previous "Merton rule" approach, which encouraged onsite renewables, giving more powers to local authorities to require higher energy standards. The new policy supports a plan-led approach to help establish energy networks through new developments.  It shifts focus from purely on-site renewables to renewables and low-carbon energy, and also emphasises a shift towards wider networks and neighbourhood-scale decentralised energy sources. It brings the supply from and to existing development into the scope of planning. This now means that developers and local authorities should be considering onsite renewables for all new developments, and it gives local authorities stronger powers to require this.

Renewable heat policy
According to the government, almost half of all UK CO2 emissions arise from the use of heat for space and water heating and industrial processes. In the 2007 Energy White Paper, Meeting the Energy Challenge, the government committed to "...conduct further work into the policy options available to reduce the carbon impact of heat and its use in order to determine a strategy for heat." At the beginning of 2008, BERR, DEFRA and CLG published the ‘Heat call for evidence' to assist them in developing a strategy on heat. The document set out their understanding of the opportunities and prospects for renewable heat and some of the barriers that prevent the greater use of renewable heat. It asked for views about the technologies available and which offer the most efficient and practical contribution to achieving national aims.
Heat Call for Evidence http://www.berr.gov.uk/energy/sources/heat/page43671.html

Microgeneration strategy
In March 2006 government published its strategy on microgeneration. The objective of this strategy is to create conditions under which microgeneration becomes a realistic alternative or supplementary energy generation source for the householder, for the community and for small businesses. Twenty five key actions were identified, which government committed to implementing by April 2008.

Microgeneration strategy http://www.berr.gov.uk/energy/sources/sustainable/microgeneration/strategy/page27594.html
Implementation progress http://www.berr.gov.uk/energy/sources/sustainable/microgeneration/strategy/implementation/page36314.html

Delivery mechanisms

The Renewables Obligation

Renewable energy technology is often more expensive to install than conventional energy generation equipment, so the main focus of government policy has been to find ways of supporting investment in renewables, in a way that will encourage those costs to come down over time. The main mechanism used to do this is the renewables obligation (RO). The RO places a requirement on electricity companies to increase the percentage of power supplied from renewable sources every year, from 4 per cent currently to 20 per cent by around 2020. Companies that do not do this are fined. This means that each unit of renewable electricity is worth approximately 3-5 pence more than conventional electricity. This extra income allows private developers to attract loans and investment to cover the higher cost of installing renewable-electricity-generating equipment. To check out recent renewable obligation certificate prices go to   http://www.nfpa.co.uk/index.html                        

The RO has been very successful at stimulating new development in landfill gas and onshore wind energy, because they are established, relatively low-cost technologies, but the less mature and more expensive technologies such as wave and tidal energy have not particularly benefited. This led the government to announce a number of proposals for changes to the renewables obligation in the 2006 energy review. These changes would provide differentiated support levels to different renewables technologies (see table below) and give additional certainty on long-term renewable obligation certificate prices. The overnment published its response to a consultation on these changes in January 2008, but new primary legislation will be required to make these changes, so they will not be introduced until April 2009 at the earliest.

Proposed renewables obligations banding

Band	Technologies	Level of support ROCs/MWh
Established 1	Landfill gas	0.25
Established 2	Sewage gas, co-firing on non-energy crop (regular) biomass	0.5
Reference	Onshore wind; hydro-electric; co-firing of energy crops; EfW with combined heat and power; geopressure; other not specified	1.0
Post-Demonstration	Offshore wind; dedicated regular biomass	1.5
Emerging	Wave; tidal stream; fuels created using an advanced conversion technologies (anaerobic digestion; gasification and pyrolysis); dedicated biomass burning energy crops (with or without CHP); dedicated regular biomass with CHP; solar photovoltaic; geothermal, tidal Impoundment (e.g. tidal lagoons and tidal barrages (<1GW)); and microgeneration	2.0

 

BERR response to consultation: http://www.berr.gov.uk/files/file43545.pdf

 

The Renewable Transport Fuel Obligation

The Renewable Transport Fuel Obligation Programme will, from April 2008, place an obligation on fuel suppliers to ensure that a certain percentage of their aggregate sales is made up of biofuels. The effect will be to require 5 per cent of all UK fuel sold on UK forecourts to come from a renewable source by 2010. This represents the maximum biofuel content allowed by European Specifications to be sold on the forecourts as standard petrol or diesel. The RTFO expects to reduce the carbon emissions from road transport in 2010 by approximately 0.7 - 0.8 million tonnes, equivalent to taking 2.6 - 3.0 million tonnes of carbon dioxide. 

Dft website - http://www.dft.gov.uk/pgr/roads/environment/rtfo/ 

 

The Code for Sustainable Homes and future guidance for non-domestic buildings

In December 2006 government launched the Code for Sustainable Homes, a national standard for sustainable design and construction of new homes. From April 2007 the developer of any new home in England can choose to be assessed against the code, and in February 2008 the government confirmed mandatory rating against the code will be implemented for new homes from 1 May 2008.

The code measures the sustainability of a new home against categories of sustainable design. It uses a 1 to 6-star rating system to communicate the overall sustainability performance of a new home, with minimum standards for energy and water use at each level. The code will give new homebuyers better information about the environmental impact of their new home and its potential running costs, and offer builders a tool with which to differentiate themselves in terms of sustainability.

The Code for Sustainable Homes http://www.planningportal.gov.uk/england/professionals/en/1115314116927.html

In relation to non domestic buildings, a new version of BREEAM will be introduced in 2008 by the Buildings Research Establishment (BRE) and will set new level of "outstanding". It will bring the scheme into closer alignment with the Code for Sustainable Homes and set minimum standards for CO2 reduction for the higher levels. BREEAM 2008 should become a driver for low-carbon commercial development and is expected to be the precursor to a new Code for Sustainable Non-Domestic Buildings.

BRE news - http://www.breeam.org/newsdetails.jsp?id=466

 

Energy Performance Certificates

From April 2008, all new residential homes marketed for sale in the UK must have an energy pperformance certificate, which details the energy efficiency of the home to prospective buyers, as part of the Home Information Pack (HIP).  This energy labelling will become mandatory for non-domestic dwellings over time: large non-dwellings (>10,000m2) from April 6th 2008, medium non-dwellings (>2,500m2) from July 1st 2008 and other non-dwellings, from October 1st 2008.

HIPs http://www.breeam.org/newsdetails.jsp?id=466

 

Permitted Development

An amendment to the General Permitted Development Order came into force on 6^th April 2008, which will make solar pv and thermal systems, ground and water source heat pump and flues forming part of a biomass heating or combined heat and power system permitted development. This means that planning permission will normally no longer be required to install these technologies. There are however a number of caveats about the size, scale and location of these technologies, including that the changes only apply in England, so it is always worth checking with the relevant local authority.

 

Office of public sector information http://www.opsi.gov.uk/si/si2008/em/uksiem_20080675_en.pdf

 

Carbon Emissions Reduction Target (CERT)

The CERT scheme, which came into effect 1 April 2008, doubles previous obligations on energy companies (EEC) to help people make their homes more energy efficient and reduce household emissions and will be a major driver of energy efficiency and domestic micro-renewables over the next three years.

The total investment is estimated at around £1 billion a year for three years. Forty per cent of the work to reduce emissions will be targeted at the over 70s and people on low incomes.

http://www.energysavingtrust.org.uk/housingbuildings/localauthorities/newsitems/certupdate/