ccl, rocs & other acronyms al gore i. aspects covered background – climate change ccl and ecas...
TRANSCRIPT
Aspects Covered
• Background – climate change• CCL and ECAs• Renewables Obligation the RO• NFFO, ROCs, LECs, REGOs• CRC – the Carbon Reduction Commitment
How to tackle climate change
• Reduce man-made CO2 emissions
• Reduce fossil fuel burn• Improve efficiency• Encourage renewable forms of energy• Incentives/Penalties
International Efforts
• UN Climate Change Conferences• 1997 Kyoto Protocol – binding targets• Bali, Poznan, Copenhagen• ‘Road maps’• UK policy and objectives
UK GHG Reduction Policies
• 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
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 0.485p/kWhNatural gas 0.169p/kWhLiquid gases 1.083p/kgCoal and coke 1.321p/kg
Reliefs from CCL
• 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
• 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 - 0.25Reference Band - 1.0Post-demonstration - 1.5Emerging - 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
• Supplier can meet its obligation by:
1. Buying total ROCs obligation (direct/auction)2. Paying a ‘buy-out price’ for its obligation3. A mixture of 1 and 2 above
• 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
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