International Comparative Legal Guides Renewable Energy 2022: Second Edition | Page 3

Chapter 17 125

12 Overview of the Renewable Energy Sector

1.1 What is the basis of renewable energy policy and regulation in your jurisdiction and is there a statutory definition of ‘ renewable energy ’, ‘ clean energy ’ or equivalent terminology ?

The Promotion of the Use of Energy from Renewables Sources Regulations 2011 ( SI 2011 / 243 ) applies the definition set out in Directive 2009 / 28 / EC ( Renewable Energy Directive ) on the promotion of the use of energy from renewable sources . This defines “ energ y from renewable sources ” as “ energ y from renewable non-fossil sources , namely wind , solar , aerothermal , geothermal , hydrothermal and ocean energ y , hydropower , biomass , landfill gas , sewage treatment plant gas and biogases ”, each of which is then defined separately .

This legislative framework required the government to ensure that renewable energy comprised 15 % of the UK ’ s total energy mix by 2020 . The Renewable Energy Directive has now been superseded by Directive ( EU ) 2018 / 2001 ( RED2 ). The deadline for transposition of RED2 into national law was after the UK ’ s withdrawal from the EU and , to date , RED2 has not been transposed into UK law . Therefore , ongoing policy and regulation of renewable energy is instead derived from retained EU law and UK statute , notably the UK ’ s binding commitments to :

■ cut greenhouse gas emissions by 78 % by 2035 compared to 1990 levels in the Carbon Budget Order 2021 ( SI 2021 / 750 ); and

■ achieve a 100 % reduction of greenhouse gas emissions by 2050 compared to 1990 levels ( the “ net zero ” target ) in the Climate Change Act 2008 ( 2050 Target Amendment ) Order ( SI 2019 / 1056 ).

There are various other policies , incentives , requirements and regulations that are detailed throughout this chapter below .

1.2 Describe the main participants in the renewable energy sector and the roles which they each perform .

Governmental participants The Department for Business , Energy and Industrial Strategy ( BEIS ) is responsible for overseeing the electricity sector , including in relation to renewable energy . BEIS was formed in 2016 following the merger of the Department of Energy and Climate Change and the Department for Business and Innovation .

BEIS is supported by other public bodies , including :

■ The Gas and Electricity Markets Authority ( GEMA ): GEMA has primary responsibility for regulation of the energy sector . Its powers and duties are derived from UK statute ( including the Gas Act 1986 , the Electricity

Act 1989 ( Electricity Act ), the Utilities Act 2000 , the Competition Act 1998 , the Enterprise Act 2002 and the Energy Acts of 2004 , 2008 , 2010 and 2011 ), together with directly effective European Community legislation that was retained by the UK after its exit from the EU .

■ The Office of Gas and Electricity Markets ( Ofgem ): a non-ministerial government department . GEMA delegates regulation of the renewable energy sector to Ofgem . Ofgem administers environmental programmes and sustainability schemes on behalf of the government under its E-Serve business unit ( see questions 3.5 and 3.7 for more detail ). Key duties and functions concerning electricity include :

■ regulating distribution and transmission networks ;

■ granting licences ;

■ protecting the interests of existing and future electricity ( and gas ) consumers ;

■ ensuring that electricity wholesale and retail markets are competitive ; and

■ managing the commercial tender process for offshore transmission projects .

Private participants

■ Generation companies : following privatisation of the generation industry in the 1990s , an increasing number of generating companies have been established , including the “ big six ” – British Gas , e . on , EDF , RWE npower , Scottish Power and SSE .

■ Transmission companies : the transmission network is owned and maintained by regional transmission companies : National Grid Electricity Transmission plc for England and Wales ; Scottish Power Transmission Limited for southern Scotland ; Scottish Hydro Electric Transmission plc for northern Scotland and the Scottish islands groups ; and Northern Ireland Electricity for Northern Ireland . The National Grid Electricity System Operator ( NGESO ) is responsible for controlling the stable and secure operation of the national electricity transmission system as a whole .

■ Suppliers – Energy is purchased from the wholesale market by suppliers ( or self-supplied by the big six ), and then sold to customers .

1.3 Describe the government ’ s role in the ownership and development of renewable energy and any policy commitments towards renewable energy , including applicable renewable energy targets .

Renewable energy assets will continue to be owned and developed by the private sector with the support of the government in order to satisfy its binding commitments to reduce UK greenhouse gas emissions , as described in question 1.1 .

Renewable Energy 2022 © Published and reproduced with kind permission by Global Legal Group Ltd , London