The Climate Change and Sustainable Energy Bill (the Bill) is set down for a Second Reading at the end of this year. According to recent press, the Bill is currently a hot topic. It was first introduced in the House of Commons in June and the Sponsor of the Bill was Mark Lazarowicz MP. The Bill aims to promote renewable energy sources including microgeneration and renewable heat, making it cheaper and easier for people to generate their own energy and it will affect utility companies.
The Bill will require the government to submit an annual report to parliament regarding current levels of greenhouse gas emissions and the efforts being made to reduce them. It will also introduce targets for the take up of the microgeneration of energy.
Summary and backgound
The main purposes of the Bill are to assist in:
• Measures to combat climate change by the reduction of, in particular, emissions of carbon dioxide (the overriding purpose)
• Alleviating fuel poverty
• Providing long-term viable energy supplies for the UK by means of microgeneration and community energy provision.
Additionally, the Bill has two themes:
• The promotion of the concept that climate change and fuel poverty should be tackled jointly
• Engaging individuals, or small groups of individuals, in measures to combat climate change - particularly by means of microgeneration and community energy schemes.
The Bill
Purposes, reports and strategy
The principal purpose is to enhance the UK contribution to combating climate change.
Persons and bodies performing functions under the Bill must consider:
• The principal purpose
• The desirability of alleviating fuel poverty
• The desirability of seeking a diverse and viable long term supply of energy by means of microgeneration and community energy provision.
In other words, all three of these aims shall be kept in mind by any person discharging any function under the Bill. Those persons (referred to as relevant persons and bodies) are stipulated in clause 1(3) to be the Prime Minister, the Chancellor of the Exchequer, the Secretary of State and any public authority.
There is a duty on the Prime Minister every year to lay a report before parliament on:
• Steps that the government has taken to reduce the emission of greenhouse gases
• The level of greenhouse gases in the UK including any increases or decreases.
This annual report is to be approved annually by both the House of Commons and House of Lords.
Greenhouse gases are to include all six such gases included in the Kyoto treaty.
The Chancellor of the Exchequer will annually publish a report on fiscal measures he considers appropriate to assist with microgeneration and energy efficiency. The Chancellor is to consult with local authorities and such persons with an interest in combating climate change and alleviating fuel poverty before publishing his strategy.
Microgeneration
The Secretary of State is to establish a national target for the take up of microgeneration in the UK. The target will include reductions in carbon dioxide to be achieved by microgeneration, or installations of microgeneration equipment, or both. The microgeneration target will be implemented under section 82 of the Energy Act 2004. The Secretary of State will be required to lay a report before Parliament each year on:
• The implementation of measures in the strategy
• The achievement of targets
• The ways in which implementing the strategy and steps taken to achieve any targets help to reduce emissions of carbon dioxide and alleviate fuel poverty.
Sale of electricity produced by microgeneration
Within 12 months a scheme is to be set up enabling electricity produced by microgeneration to be sold. Once a scheme has been established a utility company (licensed electricity supplier) will only be allowed to supply electricity to a domestic consumer if it undertakes to purchase any electricity produced by that consumer by means of microgeneration. This surplus energy will be sold-on via the national grid.
Access to certain 'green energy certificates' is to be increased. The main certificate, called a Renewables Obligation Certificate (ROCs) is given to renewable energy sources, which enable the energy to be sold to utilities so they can meet their obligations to supply renewable energy to consumers. Currently it is difficult for microgeneration, even as a renewable energy source, to obtain ROCs because the scheme and the forms are designed with large scale generation in mind. Enabling householders who install microgeneration equipment to benefit from ROCs would give the householders a 'sale-able' product (their excess electricity) which would help to reduce the pay back period referred to above.
Community energy
The Secretary of State is to take steps to promote community energy schemes which are:
• Owned by more than three people
• Are established on a not for profit basis
• Are concerned in taking measures which will promote sustainable energy, alleviate fuel poverty and secure a diverse and viable long term energy supply.
Renewable heat
By regulations the Secretary of State is to set up a 'renewable heat obligation'. The obligation will apply the current renewables obligation, (which requires utilities to provide a specified percentage of the power they sell to consumers to come from renewable sources) to heat as well and so save CO2 and stimulate demand for renewable heat such as solar thermal, photovoltaics, biomass and heat pumps. The regulations set targets for energy suppliers, and provide for penalties in cases of failure to meet targets.
A further update will be provided outlining the consequences of the Second Reading of the Bill, if any.
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