Energy in 2024

This is the 6th edition of our “Energy In” series, where we look at upcoming events, key dates and news within the environmental and energy landscape for the year ahead. 

The Energy Act 2023 will begin to play an important role in the landscape of UK energy legislation. 2024 will see the first instalment of businesses being asked to report on the actions they are taking to achieve net zero and improve energy efficiency measures throughout their portfolios. Furthermore, we will see organisations have to start preparing to carry out net zero audits and have Carbon Reduction Plans in place for tendering with the NHS on all contracts from April 2024. 

Levies & Taxes

For a full breakdown of what and when each legislation deadline is, please visit our timetable.

Climate Change Levy (CCL)

Climate Change Levy rates for 2025 have been published and can be found below.

The government will freeze main and reduced rates of Climate Change Levy in the UK in 2025-2026 at the main rate of £0.00775/kWh for electricity and gas, £0.02175/kWh for liquid petroleum gas (LPG), and £0.06064/kWh for any other taxable commodity. Reduced rates will be frozen at 92% for electricity, 77% for LPG, and 89% for gas and any other taxable commodity.

If your business is required to pay CCL, and you are unsure of the cost, you can use our CCL Calculator to find out.

To keep up to date with this, sign up to our mailing list here.

Taxable CommodityRate from 1st April 2023Rate from 1st April 2024Rate from 1st April 2025
Electricity (£/kWh)£0.00775£0.00775£0.00775
Gas (£/kWh)£0.00672£0.00775£0.00775
LPG (£/kg)£0.02175£0.02175£0.02175

Electricity Generator Levy (EGL)

Companies and groups of companies that undertake electricity generation in the UK and are connected to either the national grid or local distribution networks and equivalent networks in Northern Ireland are affected by the EGL. 

To support continued investment in the UK’s renewable generation capacity, the government will legislate for a new investment exemption for the Electricity Generator Levy (EGL). New projects for which the substantive decision to proceed is made on or after 22 November 2023 will be exempt from the EGL. The EGL will end as planned on 31st March 2028.

This is a new levy therefore there is no current law, however it will be administered under the existing Corporation Tax system.

Funding & Investments 

Industrial Energy Transformation Fund (IETF)

The Industrial Energy Transformation Fund (IETF) is designed to help businesses with high energy use to cut their energy bills and carbon emissions through investing in energy efficiency and low carbon technologies.

In March 2023 it was announced that there would be an IETF Phase 3, providing £185 million in funding. The government held a consultation on its design in the summer of 2023. IETF Phase 3 will open in January 2024.

Green Industries Growth Accelerator (GIGA)

The government is announcing a £960 million Green Industries Growth Accelerator (GIGA). This will support investments in manufacturing capabilities for the clean energy sectors where the UK can gain the clearest strengths: Carbon Capture Utilisation and Storage (CCUS), hydrogen, offshore wind, electricity networks, and nuclear.

Reporting, Schemes and Directives

Medium Combustion Plant Directive (MCPD)

The Environmental Permitting Regulations 2018 SI 110 were published in January 2018 to transpose the requirements of the Medium Combustion Plant Directive (MCPD) EU/2015/2193 of 25th November 2015 and to control emissions from the operation of Specified Generators.

To comply with the requirements of the Environmental Permitting Regulations (EPR) you can now apply for a permit from the Environment Agency (EA) for the following:

  • New standalone MCPs between 1-50MWth (before it is commissioned)
  • Existing standalone MCPs between 5-50MWth must be permitted by 1st January 2024
  • All existing plant above 5MW must comply with MCPD ELVs Remaining Tranche A 5-50MW generators must be permitted. 1st January 2025
  • Existing MCPs 5MW and below must apply for a permit and test emissions within four months of permit issue. 1st January 2028
  • Existing MCPs 5MW and below must comply with ELVs Tranche A 1-5MW and sub 1 MW generators must be permitted. 1st January 2029

Applications for standard rules and simple bespoke permits should have been made by the 30th September 2023.

  • Tranche A and B specified generators (permitting date requirement varies)

Energy Saving Opportunity Scheme (ESOS)

The Energy Saving Opportunity Scheme’s Phase 3 closes on 5th June 2024. Due to the changes through the Energy Act 2023, the Government extended the compliance deadline. 

We advise all participants to ensure they have gathered their data and work with their lead assessors to in completing audits that cover the Qualification Date of 31st December 2022. 

Compliance Period (Phase)Qualification DateCompliance PeriodCompliance Date
331 December 2022From 6th December 2019 to 5th December 20235th June 2024 (extended)
431 December 2026From 6th December 2023 to 5th December 20275th December 2027

Carbon Reduction Plans

Back in 2019, the UK announced that it had become the first major economy to welcome a legal commitment to achieve Net Zero carbon emissions by 2050. Carbon Reduction Plans determine whether a business meets the requirements, detailing emissions across a year, to aid suppliers and customers with identifying the impact of a project.

Carbon Reduction Plans (CRPs) identify what effect your business and project will have on the environment, helping suppliers and customers understand the impact of the contract. They provide details of the environmental management measures in place. 

Carbon Reduction Plans must be provided by suppliers when responding to in-scope acquisitions and once submitted, businesses will either pass or fail.

Updated guidance on the application of Carbon Reduction Plans (CRPs) and Net Zero Commitments (NZCs) for NHS Suppliers has now been published on the NHS England website. The guidance sets out detailed requirements to be implemented from April 2024, which build upon previous NHS Carbon Reduction Plan guidance.

These requirements are part of the NHS net zero supplier roadmap, which ensures the NHS supply chain plays its crucial part in ensuring the NHS becomes a net zero health service by 2045.

The guidance outlines how, from 1st April 2024, the NHS will proportionately extend the Carbon Reduction Plan requirements to cover all procurements.

Future Climate Change Agreement Scheme

The government is introducing a new, six-year Climate Change Agreement scheme. Participants that meet agreed energy efficiency or decarbonisation targets between 2025 and 2030 will be entitled to reduced rates of Climate Change Levy from 1st July 2027 to 31st March 2033. The new scheme will be open to applications for new sectors that meet energy intensity and import penetration criteria and will require more regular reporting of energy and throughput data.

Emissions Trading Scheme (ETS)

The UKETS was created by new legislation in late 2020 to replace the UK’s participation in the EUETS – a globally significant carbon reduction scheme. UKETS is a lookalike of the EUETS which accounts for around 40% of all EU carbon emissions and naturally establishes a carbon price for EUA allowances measured as Euros per tonne of CO2 equivalent.

Reforms to the ETS, as set out by the UK ETS Authority in July 2023, will reduce the number of ETS permits available for purchase from government by 45% between 2023 and 2027. It will also extend the scheme to cover emissions from domestic maritime and energy from waste in 2026 and 2028 respectively.

Contracts for Difference (CfD)

The Contracts for Difference (CfD) scheme is the government’s main mechanism for supporting low carbon electricity generation.

CfDs incentivise investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high.

The government has also set out the parameters for the next renewables Contracts for Difference auction round, increasing the maximum price that can be received, and will shortly publish further details on growing hydrogen and Carbon Capture, Usage and Storage (CCUS) deployment, ensuring that the government’s world-leading clean energy deployment continues at pace and remains on track to meet the government’s energy security and net zero ambitions.

Reforms to Energy-Saving Materials VAT Relief

Following a call for evidence, the government will expand the VAT relief available on the installation of energy-saving materials by extending the relief to additional technologies – such as water-source heat pumps – and bringing buildings used solely for a relevant charitable purpose within scope. These reforms will be implemented UK-wide in February 2024. Full details on these reforms will be published shortly.

Consultations, Notices & Policy Papers

There are currently a few consultations covering an array of important topics within the energy and environmental sector. We have included the most relevant below. To view all of them you can visit the government’s website.

Climate Change Agreements: consultation on a new scheme

This consultation can be viewed here and seeks views on proposals for a new 6-year Climate Change Agreements scheme to begin in 2025. The new scheme would add 3 new target periods running from 2025 to 2030, resulting in 3 certification periods running to 31 March 2033. It will provide further reductions in the Climate Change Levy for eligible participants. This consultation closes at 11:59pm on 14 February 2024.

Introducing a Contracts for Difference (CfD) Sustainable Industry Reward

The government is proposing to introduce a CfD Sustainable Industry Reward (CfD SIR) from CfD Allocation Round 7 onwards.

This follows the Call for Evidence on introducing non-price factors into the Contracts for Difference scheme, for which we published the government response in September 2023.

This consultation can be found here and closes at 11:59pm on 11 January 2024

Transmission license exemption for array systems connecting to offshore substations

This consultation can be viewed here and seeks views on a proposed exemption from the requirement to hold a transmission licence for array systems connecting an offshore windfarm to an offshore substation. This consultation closes at 11:59pm on 9 January 2024.

The Energy Act 2023

The Energy Act 2023 received royal assent on 26th October 2023. It is wide ranging and comprehensive with 15 parts. Though it went through several amendments in both Houses, it aims to deliver security and independence of energy supply through diversifying away from dependence on foreign supplied fossil fuels to renewables including hydrogen, wind and solar and low carbon technologies such as heat pumps and nuclear. By delivering a more robust and self sustaining energy system, the government believes this will reduce energy costs and household bills. The Act also aims to support in delivering the government’s net zero 2050 target off the back of the governments Net Zero Strategy: Build Back Greener report from October 2021. Alongside this, the Act also includes more niche changes to further legislation such as the Energy Saving Opportunity Scheme.

Whether you work directly in energy management, technology, legislation or have a general interest in the field, it is recommended that you take time to read parts relevant to you. 

The Rumford Club

The Rumford Club is a dinner debate club based in central London. It was established in 1947 and at the time was for the discussion of air movement. The club has since grown and topics now include all parts of the built environment and engineering services.

The club’s remaining speakers for this season are listed below.

Thursday 18 January 2024Ashley Bateson Director, Hoare Lea Kings Cross
Topic: Safety and Sustainability
Wednesday 14 February 2024Adrian Catchpole President of CIBSE
Thursday 21 March 2024Eoghan McHugh
Topic: 4000 KM Cycle/Coddiwomple Lublin to Dublin Protect Earth Charity Plant Trees
Thursday 11 April 2024Chris Marsland
Bingham Hart Ltd

Membership is open to all within the industry that would find enjoyment and connection with like-minded individuals.

Though this is not a new piece of legislation or regulation, it is the leading club to meet leaders and influencers of these industries and is the one to watch in 2024.

To find out more visit their website.

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