Oil and gas

How are electricity and gas typically metered in the UK? Across the UK, most domestic and non-domestic premises have main, primary meters that record whole-building electricity and gas use for the purpose of calculating utilities charges. These devices present a continuous, running total of consumption. Where smart meters or AMR equipment (see below) are not installed, meters must be read by hand, either by the utility supplier or the occupier of the building. The figures are noted and compared with the previous reading to determine usage over the period, and during any interval without a read, consumption is commonly estimated. Some properties also deploy sub-meters (secondary meters), which are local meters fitted to track the amount of energy used in a specific zone or by a particular piece of equipment. This practice is most common in non-domestic buildings, for example to measure...

What are heat networks? Heat networks are systems that deliver heating to multiple users within a single building (communal heating) or across several buildings (district heating), drawing on shared heat source(s) and a shared distribution network of pipes and plant. Heat is usually supplied as hot water—steam is uncommon—and there is a growing move towards circulating lower temperature, ‘ambient’ heat... Where a DHN connects multiple properties, heat exchangers are typically employed to provide hydraulic separation between the central network and the individual building systems. This permits different pressures and circulation rates, and makes it easier to manage temperatures (and ownership) within local buildings... For further detail on the engineering of district heating networks, see Practice Note: District heating/heat networks—technology. This Practice Note summarises the obligations under the Heat Network ( Metering and Billing) Regulations 2014, SI 2014/3120 (as amended), which form a specific element of the legal...

This Practice Note centres on a ‘single landowner’ model, either where a fresh lease is granted for a stand-alone scheme, or where an existing lease remains and the battery storage plant is added alongside on land already leased by the developer. A number of land rights considerations must be addressed at the outset of project decision-making; these will matter both to promoters of potential battery locations and to those exploring new opportunities on operational sites. The principal points are outlined below. For a summary of the main construction aspects in battery storage schemes, see Practice Note: Energy storage—construction issues. For detail on regulatory hurdles and prospects for energy storage, see also textbook: Energy Storage: Legal and Regulatory Challenges and Opportunities. What property rights are typically sought for a battery storage...

What are the Capacity Market Rules? The Capacity Market ( CM) was established by the UK government to secure dependable electricity capacity by encouraging private sector commitment and investment, thereby protecting security of supply in Great Britain ( GB). After extensive consultation, the CM was brought forward using powers in the Energy Act 2013 ( EA 2013). The principal instrument giving effect to the CM is the Electricity Capacity Regulations 2014 (the Capacity Regulations), SI 2014/2043, as amended. Alongside the Capacity Regulations, SI 2014/2043: section 34 of the EA 2013 empowers government, via the Secretary of State, to create and revise Capacity Market Rules ( CM Rules) that supplement secondary legislation made for the CM regulation 77 of the Capacity Regulations, SI 2014/2043, authorises the Gas and Electricity Markets Authority ( GEMA) to make or amend CM Rules governing the CM’s...

Following the close of the Brexit transition period ( IP completion day) on 31 December 2020, the UK stopped participating in the EU’s Emissions Trading System ( ETS). The EU ETS is designed to reduce the overall volume of specified greenhouse gases ( GHG) released by factories, power stations and other covered installations, by operating an allowance market within a cap-and-trade framework. For further information on the EU ETS and carbon trading, see the following Practice Notes: EU Emissions Trading System ( ETS) Phase IV— Directive 2003/87/ EC EU Emissions trading system—outline EU Emissions Trading System ( ETS) for aviation EU Emissions Trading System ( ETS) for maritime transport EU Emissions Trading System ( ETS II) for buildings, road transport, and additional sectors Carbon markets—basic principles and future developments Carbon...

What is smart metering? For an introduction to smart meters, see also Practice Note: What is a smart meter? In Great Britain, licensed electricity and gas suppliers are required under their supply licences to take all reasonable steps to roll out smart meters to domestic and small business customers. The programme is expected to lower customers’ energy bills, boost energy efficiency, and make it simpler to switch energy supplier. The UK government views smart metering as a crucial instrument for a low‑carbon economy, reaching net zero emissions by 2050, and realising ambitions for an affordable, secure and sustainable energy supply chain. The smart meter roll‑out has been extended on several occasions since the Electricity Act 1989 and Gas Act 1986 were amended to place duties on licensed suppliers to complete it. There have also been multiple reviews and publications on progress, including National Audit Office...

Author: James Todd, with appreciation to David Cruickshank and Jamie Dunne Introduction and scope The purpose of this Practice Note is to: introduce the rise of ‘gas peaking’ projects that are becoming increasingly widespread across Great Britain’s ( GB) electricity market, and set out the principal subsidy/support arrangements that make such projects attractive for developers and, where appropriately structured, suitable for project financing For more information on central project financing issues relating to gas peaking projects, see Practice Note: Gas peaking projects—key project issues relevant to project financing. This Practice Note considers gas peaking within the GB energy market and does not take account of the distinct position in Northern Ireland. For further practical guidance on the financing of energy, power and resources projects across a range of sectors, including those discussed in this Practice Note, see also textbook: Energy and Resources Financing: A Practical...

What is the Capacity Market? The Capacity Market ( CM) forms a component of the government’s Electricity Market Reform ( EMR) programme. As a statutory framework, it is intended to stimulate the delivery of dependable electricity capacity, in order to prevent prospective gaps in electricity supply. This Practice Note concentrates on the entitlements and duties of participants who secure success in the prequalification and auction stages through which CM assistance is granted and conferred to successful recipients......

Introduction Breakthroughs in energy storage, coupled with falling technology costs, are reshaping the global power market, putting storage firmly in the industry spotlight. This note centres on UK battery storage schemes, especially the market-specific construction considerations that arise, and are debated, when preparing and negotiating construction contracts for such schemes from a developer and funder viewpoint. For a broader primer on energy storage projects, see Practice Notes: Scaling up energy storage: revenue opportunities in Great Britain and Energy storage technologies in the UK. For planning matters linked to energy storage, consult Practice Note: The planning regime for energy storage in England and Wales. For regulatory and licensing topics affecting energy storage, refer to Practice Note: Energy storage—the evolving regulatory regime and renewable subsidy position. For further detail on regulatory hurdles and prospects for storage projects, see also the textbook: Energy Storage: Legal and Regulatory Challenges and...

For comprehensive analysis of how regulation, consenting and incentivisation shape the net zero energy transition within the legal framework of England and Wales, consult: Collinson and Hockman on Energy Law: Regulating, Consenting and Incentivising the Energy Transition. That textbook provides thorough treatment of topics addressed in this Practice Note. What is Electricity Market Reform and the Capacity Market? The Capacity Market ( CM) forms a component of the government’s broader Electricity Market Reform ( EMR) programme......

EU Emissions Trading System ( ETS) Following the close of the Brexit transition on 31 December 2020 ( IP completion day), the UK ceased participation in the EU’s Emissions Trading System ( ETS). The EU ETS aims to cap overall emissions of specified greenhouse gases ( GHG) from factories, power stations and other covered installations via a cap-and-trade allowance market. It began with Phase I in 2005 and is established by Directive 2003/87/ EC, as later amended by Directive 2009/29/ EC. Phase III started in January 2013 and concluded in 2020, with Phase IV spanning 2021–30. For more details on the EU ETS and carbon trading, see Practice Notes: EU Emissions Trading System ( ETS) Phase IV— Directive 2003/87/ EC EU Emissions trading system—outline EU Emissions Trading System ( ETS) for aviation EU Emissions Trading System ( ETS) for maritime transport EU Emissions Trading System ( ETS) for buildings, road...

An increasing cohort of developers is reporting that co-located battery storage schemes have secured project finance. This marks significant progress, given that as recently as 2018 grid-scale batteries were treated as an emerging asset class, with many funders having written them off as unsuitable for project finance. This Practice Note sets out key considerations for both lenders and developers looking to project finance co-located battery storage projects. For more information on: construction considerations for co-located battery storage projects, see Practice Note: Energy storage—construction issues property aspects regarding co-located battery storage projects, see Practice Note: Battery storage projects—property issues planning matters, including in relation to co-located battery storage, see Practice Note: The planning regime for energy storage in England and Wales battery storage projects more broadly, see Practice Notes: Scaling up energy storage—revenue opportunities in Great Britain and Energy storage...

Since the Brexit transition ended on 31 December 2020 (the IP completion day), the UK formally ceased taking part in the European Union Emissions Trading System ( EU ETS) framework. The EU ETS aims to curb the overall volume of specified greenhouse gases ( GHGs) released by factories, power stations and other regulated sites within the system by operating an allowance market under a cap-and-trade model. It began with Phase I in 2005 and is founded on Directive 2003/87/ EC (as later revised by Directive 2009/29/ EC). Phase III of the EU ETS started in January 2013 and concluded in the year 2020. Phase IV spans the period 2021–30. For further information on the EU ETS and carbon trading, consult the following Practice Notes and materials: EU Emissions Trading System ( ETS) Phase IV— Directive 2003/87/ EC EU Emissions trading...

Basic principles Carbon markets sit within the discipline of economics—the analysis of how limited resources are apportioned among rival uses, as set out by Lionel Robbins ( An Essay on the Nature & Significance of Economic Science, 2nd ed., revised and extended, 1949, Ch 1.3). Through this lens, a decent environment counts as a scarce resource. The central proposition is that by conferring property rights over greenhouse gas ( GHG) emissions—by ‘pricing carbon’—market participants can allocate this resource in a cost‑effective way. Consequently, a stated emissions goal (for instance, cutting emissions by 100% by 2050) can be achieved at the lowest overall cost. Setting a carbon price creates climate‑aligned incentives: it discourages carbon‑intensive behaviour and spurs investment in the low‑carbon economy, so that when actors face the social cost of high‑carbon goods and services, they switch to lower‑carbon...

Author: James Todd, with thanks to David Cruickshank and Jamie Dunne. Introduction This Practice Note sets out the principal considerations connected to the project financing of gas peaking generation schemes (often called ‘gas peakers’). It concentrates on approaches to secure dependable income for these projects and to minimise liabilities while maximising cost transparency. It does not, in the main, cover more standard contractual positions, although these remain relevant and should be evaluated by legal advisers where appropriate, such as: seeking security from counterparties assignment in security drafting funder direct agreements collateral warranties For an overview of the key documents used in project financing, see Practice Note: Project finance—key finance documents. Although written with project finance specifically in mind, many of the issues highlighted will also be pertinent when undertaking due diligence on equity transactions. For further detail on the nature of ‘gas...

What is smart metering? For a primer on smart meters, refer to Practice Note: What is a smart meter? GB’s licensed electricity and gas suppliers, under their supply licences, must take all reasonable steps to roll out smart meters to domestic and small business customers. The smart metering rollout is expected to lower customers’ energy bills, improve energy efficiency and make switching energy supplier simpler. For a detailed overview of the timetable for GB’s rollout, the regulation governing smart metering, and the typical structures and financing arrangements used by energy suppliers to enable this rollout, see Practice Note: Smart metering regulation and smart metering projects. What are the key organisations in the GB smart metering market? Capita plc ( Capita) — the ultimate owner of the initial smart metering communications licensee, Smart DCC Limited (for more on which, see below). Capita is a...

Brexit impact As of 31 January 2020 (exit day), the UK ceased to be an EU Member State and entered an implementation phase during which, for many purposes, the EU continued to treat the UK as if it were still a Member State. At 11 pm ( GMT) on 31 December 2020, that transition/implementation phase ended. From that moment (known in UK law as ‘ IP completion day’), principal transitional arrangements expired and notable changes started to take effect across the UK’s legal framework. Any amendments relevant to this material will be outlined below in due course. For details on how departure from the EU will affect Great Britain’s ( GB) renewable energy sector, see Practice Note: Energy and Brexit—renewable energy, which tracks the main publications and announcements issued to date regarding Brexit and the Great Britain ( GB) renewable energy sector. It also...

Income sources for a storage scheme hinge on the relevant electricity market, the technology deployed, the size of the project and whether it runs behind the meter to meet a specific site’s needs or is connected to the grid. Storage can generally extract value through some or all of the following: supplying grid services (frequency response, Capacity Market income, demand-side response) market price arbitrage smoothing generation output and avoiding imbalance charges in a hybrid model where an underlying (typically intermittent) electricity generation plant is co-located with a storage unit These income streams are explained in more detail below. All such revenue forms are described in further detail below. More detail is provided below. Investors usually want the flexibility to stack (i.e. combine) revenues, perhaps relying on different sources at different times of day or year, whilst debt financiers will look for a longer-term contracted base revenue stream to...

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...