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Hendry reveals ‘Red Tape Challenge’ results for energy

09 August 2012

DECC has announced plans to scrap 86 energy sector related regulations and 'improve' 48 more, while industry calls for clarification on renewables.

As part of the coalition's drive to cut red tape burdens, energy minister, Charles Hendry announced on Tuesday last (August 7) that his department is to scrap 86 energy sector related regulations and 'improve' a further 48 regulatory regimes, while promising to keep "protections as strong as ever." These, along with other reforms, are estimated to deliver savings to businesses worth around £400m over the next 20 years.

Energy is the biggest infrastructure sector in the UK; Mr Hendry says the aim of these reforms is to stimulate over £100bn of new investment in the electricity sector, supporting around 250,000 electricity industry jobs through to 2030.

Mr Hendry says it is vital that we have a regulatory regime which promotes fairness and consumer and environmental protection, but does not impose unnecessary costs or barriers to generating the necessary investment, innovation and skills we need to build the low carbon economy.

“The Red Tape Challenge has provided the opportunity to ensure we continue to meet these objectives,” he says. “We have listened to our stakeholders as they suggested regulations which add cost or complexity without effectively leading to protections, and I am pleased to announce that DECC will scrap or improve 134 regulations.”

The industry was quick to applaud DECC’s announcement. Energy UK chief executive, David Porter believed it was a step in the right direction in creating a market structure that will help deliver jobs and investment, but he wants DECC to go further in this exercise, and to continue to improve legislation. “Getting future energy policy right is more critical than ever,” he said. Among the regulations that DECC is proposing to scrap or improve are:

The Offshore Chemicals Regulations 2002 (amended 2011) - which establish a regime for controlling the use and discharge of chemicals from offshore installations. This will have requirements streamlined to improve functionality and reduce costs for installation operators whilst maintaining all environmental protections.

Modernisation of the Electricity (Compulsory Wayleaves) (Hearings Procedure) Rules 1967 (SI 1967/450). These rules are used to resolve disputes between licence holders and landowners for the presence of overhead electric lines on private land. They will be updated to ensure the rights and interests of both sides are appropriately balanced whilst reducing the costs and other burdens on parties.

Improvements to the Public Gas (Transporter Pipe-line Works (Environmental Impact Assessment) Regulations 1999 (SI 1999/1672) will scrap duplicate requirements for companies in England to seek determination from the secretary of State as to whether a proposed pipeline would require an environmental statement.

Ofgem has also set out how it will reduce regulatory burdens in their Simplification plan, published at the end of June. The plan has taken Red Tape Challenge suggestions into account and includes actions to review information requests to businesses to avoid duplication, publish a schedule of future consultations and convene a roundtable group with industry and consumer representatives to review and improve consumer information on bills.

Clarification on renewables is urged
Meanwhile, some 200 organisations have signed a letter to David Cameron and Nick Clegg asking them to ensure that the coalition provides clear and consistent leadership on renewable energy. The letter follows growing concerns about the slow pace and complexity of DECC’s policy framework and a series of interventions by the Treasury, creating confusion about government objectives and leaving key renewable power technologies without the clarity they need.

The recently published Renewables Obligation Banding document was meant to define support levels for renewable power technologies until 2017 but, according to the Renewable Energy Association (REA), onshore wind, solar power and anaerobic digestion now have a year or less of forward visibility.

REA chairman, Martin Wright says the decisions for renewable power were late and raised more questions than they answered. “Renewables must not be treated like a political football, kicked between DECC and Treasury,” he says. “Government shouldn’t squander this once-in-a-generation opportunity to transform our energy system into one fit for the future, with all the jobs and inward investment this will bring.”

The letter was signed by signatories as diverse as investors Novusmodus and Climate Change Capital, the TUC’s Frances O’Grady, the University and College Union, the NFU, environmentalist Tony Juniper and major companies, including npower renewables, the Co-operative Group and cruise operator, Fred Olsen. Other signatories include the Solar Trade Association, the UK Sustainable Investment and Finance Association and the Country Land and Business Association.

REA chief executive Gaynor Hartnell says right now we are on the cusp of pure economics being the main driver. “Even the least developed renewable technologies are on a par with carbon capture and storage and nuclear power, and in fact most renewables are significantly cheaper,” she asserts. “Our leaders must see the sense in this, and ensure the UK is not left behind.”

Les Hunt

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