Renewable energy and carbon capture in United Kingdom

Renewable energy and carbon capture

Give details of the production and consumption of renewable energy in your country. What is the policy on renewable energy? Describe any obligations on the state and private parties for renewable energy production or use. Describe the main provisions of any scheme for registration of renewable energy production and use and for trade of related accounting units or credits.

The UK has an obligation to ensure that renewable energy accounts for at least 20 per cent of total energy needs by 2020, under the EU Renewable Energy Directive (2009/28/EC). This is incorporated into UK law via the Promotion of the Use of Energy from Renewable Sources Regulations 2011 (SI 2011/243). Each EU member state is also required to ensure that 10 per cent of its transport energy consumption comes from renewable sources by 2020.

BEIS reported in 2019 that renewable electricity generation in the UK increased by 3.8 per cent between 2017 and 2018 to 44.3GW. Renewable energy accounted for a record 33 per cent of the electricity generated in the UK in 2018. Onshore and offshore wind power, together, represent the highest proportion (49 per cent) of the UK’s renewable energy capacity. Offshore wind in particular has seen significant expansion. Total offshore wind power generation increased by 28 per cent compared with 2017, to a record capacity of 26.7TWh. Solar photovoltaics also increased in capacity to 12.9TWh in 2018, compared with 11.5TWh in 2017.

The Planning Act 2008 and National Planning Policy Framework provide a regime for developing and consenting infrastructure projects. Some large-scale renewable energy projects may be considered to be ‘nationally significant infrastructure projects’, in which case applications for development consent are considered under special procedures. Those projects not falling within the statutory definition are subject to conventional Town and Country Planning Act 1990 procedures. Depending on the project, major infrastructure projects may also require licences under the Electricity Act 1989.

The UK government has a stated ambition to attract low-carbon innovation in the UK economy and invest in innovation in this area. There are several support schemes for renewables. However, government policy in this space can change rapidly. In 2015, the government announced that it will limit renewables support to technologies that have the potential to scale up and to compete in a global market without subsidy.

The schemes currently in place to support renewables include:

• The Renewables Obligation (RO): a scheme providing financial incentives for large-scale renewable electricity generation in England and Wales. It requires all licensed electricity suppliers to produce evidence that they have supplied customers in Great Britain with a certain amount of energy from renewable sources. This is currently being replaced by the Contracts for Difference scheme. New generation from 31 March 2017 is not able to take advantage of the RO. Projects that already receive support under the RO will continue to receive support until the end of a project’s ‘support lifetime’ (20 years) or in 2037, when the scheme will ultimately come to an end.
• Contracts for Difference: a statutory instrument that provides for a contracting mechanism to convert the risk of a variable price for electricity into a fixed price. When the market price is below the strike price, the generator will receive a top-up payment from the counterparty. When the market price is above the strike price, the generator must pay back the difference to the counterparty.
• Feed-in-tariff (FIT) schemes: FIT schemes provide financial incentives for small-scale renewable and low-carbon electricity generation. However, note that the FIT scheme has been closed to new applications since 31 March 2019.
• Renewable heat incentive (RHI): this scheme incentivises renewable heat projects by making regular payments to those who install an eligible renewable heating system or inject bio methane into the gas grid. The RHI scheme applies to both domestic and non-domestic projects.
• Renewable Transport Fuel Obligation (RTFO): this scheme requires suppliers of fuels for road-transport and ‘non-road mobile machinery’ to ensure that a certain proportion of the fuel they supply is sustainable biofuel.

The government provides some support for microgeneration (small-scale renewables generating electricity up to and including 50kW or heat with a capacity up to 45kW thermal). As well as FIT and RHI incentives, microgeneration activities also have permitted development rights, allowing them to be carried out with deemed planning permission.

Describe, in general terms, any regulation of wind energy.

In order to construct and operate a wind energy project, a variety of environmental permits are required. In the offshore context, a development consent order, a lease of the seabed from the Crown estate and a marine licence are required. In the onshore context, planning permission must be obtained under the Planning Act 2008 or the Town and Country Planning Act 1990, depending on the size of the proposed development. Land use and access rights will also need to be secured. Larger projects are likely to require an environmental impact assessment. Enhanced community engagement requirements exist for larger developments under the Localism Act 2011.

There are government-led support schemes for wind generation, although these schemes are frequently subject to change as the government develops its energy policy. For instance, the exemption for renewable energy projects under the CCL became unavailable from 1 August 2015.

Describe, in general terms, any regulation of solar energy.

Solar energy has grown rapidly in the UK’s energy mix. In 2017, the UK’s first subsidy-free solar photovoltaic (PV) farm was opened in Bedfordshire. By 2018, solar photovoltaics accounts for 29.6 per cent of the UK’s total renewable energy capacity.

Large-scale solar projects must obtain planning permission and any other necessary environmental permits. Developers must also secure land use and access rights for the substantial land area usually required for large-scale solar farms. Planning permission is commonly granted for a period of 25 years, with requirements for decommissioning and site restoration included as planning conditions.

Small-scale solar installations may be able to benefit from the support provided for microgeneration. However, note that the government has recently proposed closure of the FIT scheme to new applications after 31 March 2019.

Describe, in general terms, any regulation of hydropower, geothermal, wave or tidal energy.

Most hydropower generation activity in the UK occurs in Scotland. There is limited scope for developing new hydropower installations. However, small-scale hydropower has some growth potential. As with wind and solar facilities, hydropower projects require planning permission and environmental permits, particularly with respect to water abstraction and discharges. Flood risk assessment and related permissions may also be required.

In 2018, the European Commission published guidance on the impact of EU habitat and species protection legislation and policy on hydropower projects. The guide emphasises the need to consider biodiversity and ecology issues at an early stage of a project planning process. It also provides examples of best practice and mitigation measures.

There is significant potential for wave or tidal energy in the UK. However, the industry is still in its infancy. There is no specialist regulation in place for this industry, but more general laws addressing marine permitting, marine protected areas, and other environmental permits would be required to undertake activities associated with wave or tidal energy generation.

Describe, in general terms, any regulation of production of energy based on waste.

There are several Energy from Waste (EfW) plants in the UK. Landfill diversion targets have become increasingly pressing, driven by the EU Landfill Directive (Directive 99/31/EC) and EU Waste Framework Directive (Directive 2008/98/EC), which in turn has driven the development of EfW facilities across the UK. EfW processes still generate GHG emissions but overall are considered preferable to disposal of waste by landfill, as heat energy or electricity is recovered in the process. Defra has published ‘Energy from waste: a guide to the debate’, which highlights the key environmental, technical and economic issues at play.

EfW activities require environmental permits, planning permission, Electricity Act licences and will also be subject to laws regulating emissions to air.

The UK government provides opportunities for financial support for community heating programmes which can be fulfilled through EfW processes. EfW projects providing head may also be able to benefit from the RHI.

Describe, in general terms, any regulation of biofuel for transport uses and any regulation of biomass for generation of heat and power.

Under the EU Renewable Energy Directive, 10 per cent of the UK’s transport energy consumption must come from renewable sources by 2020. The UK also has obligations to reduce life-cycle GHG emissions from transport fuel under the EU Fuel Quality Directive (Directive 2009/28/EC).

The RTFO is the primary way that the government incentivises and supports biofuels in transport, requiring fuel suppliers to provide a certain proportion of biofuels alongside fossil fuels. In April 2018, the government announced changes to the RTFO, increasing the proportion of biofuel required. Under these new requirements, owners of transport fuel who supply at least 450,000 litres a year or more must make sure the mix is at least 9.75 per cent biofuel in 2020 and 12.4 per cent biofuel by 2032. The RTFO applies to refiners, importers and any other suppliers of fossil-based road transport fuel (hydrocarbon oil) in the UK.

Biomass generation is regulated in a similar way to other industrial emissions installations. In addition, all bioliquids and stations equal to or larger than 1MW that use solid biomass or biogas fuels must meet sustainability reporting requirements relating to the land from which the biomass is sourced and the life cycle GHG emissions of the biomass.

The government launched an initiative to promote heat energy investment - the Heat Network Investment Project (HNIP) - in December 2018. This follows a successful pilot initiative in 2016 and 2017 in which local authority-led heat network projects received £24 million to provide heat to 5,000 domestic customers and 50 non-domestic buildings. Several of these projects involved biomass boilers.

Describe, in general terms, any policy on and regulation of carbon capture and storage.

The UK government has affirmed its commitment to supporting carbon capture, usage and storage (CCUS), with the aim of being able to deploy CCUS at scale during the 2030s. This includes establishing the CCUS Cost Challenge Taskforce to advice on steps to reduce the cost of deploying CCUS in the UK. BEIS has committed to spend up to £100 million to support industry and CCSU innovation and deployment in the UK.

However, the Business, Energy and Industrial Strategy House of Commons select committee launched an inquiry into the government’s plans for CCUS policy in May 2018. In particular, the inquiry is investigating how essential CCUS is for the UK to meet its emission reduction target for 2050, how the government should set targets for cost reduction in CCSU, what a realistic level of cost reduction might look like, and what alternatives the government might consider if CCSU costs do not come down ‘sufficiently’. The inquiry report was published on 25 April 2019, and is awaiting a government response.