Regulation 3 Amendment of the Climate Change Agreements (Eligible Facilities) Regulations 2012

(1)

The Climate Change Agreements (Eligible Facilities) Regulations 2012^f1 are amended as follows.

(2)

In regulation 1(3) (expiry) for “2027” substitute “2033”.

(3)

In regulation 2 (interpretation), at the appropriate place insert—

““biomass” includes biomass in solid, liquid or gaseous form;

“non-renewable fuel” means a relevant commodity other than biomass;

“renewable fuel” means biomass;”.

(4)

In regulation 5 (calculation of reckonable energy from relevant commodities and electricity)—

(a)

at the end of the heading insert “: general case”;

(b)

in paragraph (2)—

(i)

omit “Subject to regulations 6 and 7,”;

(ii)

for “2.6” substitute “2.1”;

(c)

after paragraph (2) insert—

“(3)

This regulation does not apply where any of regulations 5A to 7B applies.”.

(5)

After regulation 5 insert—

“Calculation of reckonable energy from self-generated solar, wind or water power

5A

(1)

The quantity of self-generated electricity is treated as reckonable energy.

(2)

In paragraph (1) “self-generated electricity” means electricity which—

(a)

is generated from—

(i)

the direct conversion of sunlight;

(ii)

wind; or

(iii)

water power; and

(b)

is—

(i)

generated in plant which is located in, and is intended for supplying electricity for use by, a facility; or

(ii)

supplied to a facility without passing through a distribution system operated by an electricity utility^f2.”.

(6)

For regulation 6 (calculation of reckonable energy from dedicated electricity generation plant) substitute—

“Calculation of reckonable energy from dedicated electricity generation plant

6

(1)

This regulation applies to electricity generated in plant which is located in, and intended for supplying electricity for use by, a facility unless regulation 5A, 7, 7A or 7B applies to the electricity.

(2)

Where the electricity is used on other parts of a site, the electricity generated must be attributed to the facility and the rest of the site on a pro rata basis.

(3)

Where the electricity is generated from the combustion of exclusively non-renewable fuel, reckonable energy must be calculated by reference to the gross calorific value of the commodity burned to produce the electricity.

(4)

Where the electricity is generated from the combustion of exclusively renewable fuel, the quantity of electricity must be multiplied by a factor of 2.1 to convert it into reckonable energy.

(5)

Where the electricity is generated from the combustion of both renewable fuel and non-renewable fuel, reckonable energy must be calculated—

(a)

in accordance with paragraph (3), in respect of the proportion of the electricity equal to the proportion of relevant commodities burned to generate the electricity which are non-renewable fuel, calculated by reference to the gross calorific value of each commodity; and

(b)

in accordance with paragraph (4), in respect of the proportion of the electricity equal to the proportion of relevant commodities burned to generate the electricity which are renewable fuel, calculated by reference to the gross calorific value of each commodity.”.

(7)

In regulation 7 (calculation of reckonable energy from combined heat and power stations)—

(a)

at the end of the heading insert “: non-renewable fuel”;

(b)

in paragraph (1), after “power station” insert “which exclusively burns non-renewable fuel”;

(c)

for the formula in paragraph (5) substitute—

“RHS = [(EC x HP) / (2ET+HT)] - [((HP×ES)/HT) x (2.1 - (2EC / 2ET+HT))]”;

(d)

For paragraph (6) substitute—

“(6)

For the purposes of paragraphs (4) and (5), electricity from a combined heat and power station is put into public supply when it—

(a)

is supplied to an electricity utility; and

(b)

is CHP qualifying power output.

(7)

In paragraph (6)(b)—

“CHP qualifying power output” has the meaning given by the relevant CHPQA standard;

“CHPQA scheme”, in relation to a combined heat and power station, means the scheme in relation to which the station’s CHPQA certificate^f3 was issued;

“CHPQA standard” means the Combined Heat and Power Quality Assurance Standard, Issue 7, promulgated by the Department for Energy Security and Net Zero, or its predecessor standards^f4;

“relevant CHPQA standard”, in relation to a combined heat and power station, means the CHPQA standard which is applicable to the station’s CHPQA scheme.”.

(8)

After regulation 7 insert—

“Calculation of reckonable energy from combined heat and power stations: renewable fuel

7A

(1)

Reckonable energy from a combined heat and power station which burns relevant commodities consisting exclusively of renewable fuel must be calculated in accordance with this regulation.

(2)

The quantity of electricity produced by the combined heat and power station must be multiplied by a factor of 2.1 to convert it into reckonable energy, whether or not the electricity is put into public supply within the meaning of regulation 7(6).

(3)

Subject to paragraph (4), the following formula applies in respect of heat produced by the combined heat and power station—
$R E = E C - (E P x 2.1)$
where—

RE = reckonable energy from the heat produced by the combined heat and power station;

EC = the total energy content of the relevant commodities burned in the combined heat and power station calculated by reference to the gross calorific value of each commodity;

EP = the total quantity of electricity produced by the combined heat and power station.

(4)

When applying the formula in paragraph (3), if EC is less than (EP x 2.1), RE = 0.

Calculation of reckonable energy from combined heat and power stations: renewable and non-renewable fuel

7B

The reckonable energy from a combined heat and power station which burns both renewable fuel and non-renewable fuel is calculated—

(a)

in accordance with regulation 7, in respect of the proportion of the reckonable energy equal to the proportion of relevant commodities burned in the combined heat and power station which are non-renewable fuel, calculated by reference to the gross calorific value of each commodity; and

(b)

in accordance with regulation 7A, in respect of the proportion of the reckonable energy equal to the proportion of relevant commodities burned in the combined heat and power station which are renewable fuel, calculated by reference to the gross calorific value of each commodity.”.

Annotations

Footnotes

f1: S.I. 2012/2999; relevant amending instruments are S.I. 2020/958 and S.I. 2023/1226.
f2: See paragraph 150 of Schedule 6 to the Finance Act 2000 for the meaning of “electricity utility”.
f3: See paragraph 147 of Schedule 6 to the Finance Act 2000 for the meaning of “CHPQA certificate”. That definition was inserted by the Finance Act 2013 (c. 29), section 200, Schedule 42.
f4: Issue 7 of the Combined Heat and Power Quality Assurance Standard (published December 2018) and its remaining applicable predecessors are available here: https://www.gov.uk/government/publications/chpqa-standard and a hard copy may be obtained on request from the Department for Energy Security and Net Zero, 3 - 8 Whitehall Place, London SW1A 2AW.