Energy Bill 2015-2016 (UK)

Happy New Year, and welcome to 2016!

I am waiting today for the second reading of the Energy Bill 2015-2016. Further blog posts will be at the end of January.

In the meantime, find here the summary of the Energy Bill as it returned to the Commons from the Lords, for this second reading.

The Energy Bill (when enacted) will:

  1. Formally establish the Oil and Gas Authority (OGA) as an independent regulator of the UK Oil and Gas industry, which will take the form of a government company, charged with (amongst other matters) the asset stewardship and regulation of domestic oil and gas recovery. 
  2. Transfer the Secretary of State for Energy and Climate Change’s existing regulatory powers in respect of offshore oil and gas to the OGA. It will transfer the Secretary of Stateʹs existing regulatory powers in respect of onshore oil and gas in England to the OGA and in relation to onshore oil and gas in Scotland and Wales will respect the changing devolution position. The Secretary of State’s environmental regulatory functions in relation to oil and gas would not be transferred.
  3. Give the OGA additional powers including: access to company meetings; data acquisition, retention and transfer; dispute resolution; and sanctions.
  4. Introduce provisions in relation to charges for the offshore oil and gas environmental regulatorʹs services to the industry.
  5. Make legislative changes to remove the need for the Secretary of State’s consent for large onshore wind farms (over 50 Mega Watt (MW)) under the Electricity Act 1989, acting in tandem with other measures to, in effect, transfer the consenting of onshore wind farms into the planning regime in the Town and Country Planning Act 1990.
  6. Make an amendment to the Climate Change Act 2008 preventing, from 2028, the net UK carbon account being calculated taking into account carbon units derived from the European Union Emissions Trading System.

Within the Department of Energy and Climate Change (ʺDECCʺ), the offshore Oil and Gas Environment and Decommissioning Unit (ʺOGEDʺ) is the body responsible for environmental regulation functions relating to the offshore oil and gas industry on behalf of the Secretary of State. OGED has been charging fees annually to operators in the territorial sea and the UKCS (UK Continental Shelf) to cover the costs of its functions. OGED recently reviewed the current fees charged by the Secretary of State to ensure they were in line with current Treasury Guidance. As a result of this work, it became clear that whilst the majority of fees that were recovered were properly covered by fee schemes, there were elements that were not provided for by the current legislation. The Bill therefore validates those charges that have already been raised without authority. The Bill also provides that the Secretary of State can charge a fee in future for two sets of functions.

The UK Government made a manifesto commitment to decentralise decision making on new onshore wind farms. Ministers have said that onshore wind energy development should only get the go‐ahead if supported by local people (Written Ministerial Statement). DECC is implementing measures, including through the Energy Bill, to help fulfil the commitment by removing the requirements for a consent from the Secretary of State for Energy and Climate Change in relation to the construction, extension or operation of onshore wind farms with a capacity greater than 50MW. In future, local authorities (or potentially the Welsh Ministers in the case of Wales) will be the primary decision‐makers for all onshore wind projects including those with a capacity greater than 50MW.

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