Locations
Welcome to this edition of Fieldfisher's Energy Update.
This fortnight we discuss a new consultation in the UK on the fiscal regime for shale gas and there is also new UK planning guidance on fracking. We also examine the competition law concepts of cartels and successor liability that could apply to energy firms. On the renewables side, we look at the world's largest offshore wind farm project that is being set up in the UK and a large new solar project in India. Finally, we look at new proposals on carbon capture and storage.
We hope you will find this of interest.
UK Government publishes consultation on fiscal regime for shale gas
Following the announcement in the Budget 2013 that it would introduce a generous new tax regime for shale gas, the Government on 19 July 2013 published a consultation entitled "Harnessing the potential of the UK’s natural resources: a fiscal regime for shale gas". The consultation outlines a proposal for a pad allowance (where a pad refers to the drilling and extraction site) which would effectively halve the tax on production income from 62 per cent to 30 per cent. It also discusses the extension of the Ring Fence Expenditure Supplement (RFES) from six to ten accounting periods to help encourage early investment. The consultation closes on 13 September 2013.
For a link to the consultation click here
New planning guidance for onshore oil and gas developments
New planning guidance has recently been issued by the Department for Communities and Local Government (DCLG) for onshore oil and gas developments, including shale gas and coal bed methane. The emergence of shale gas by fracking (or hydraulic fracturing) has been a key driver in developing the guidance.
This provides an overview of how the planning regime is intended to operate alongside other regulatory regimes. Minerals Planning Authorities (MPAs) grant permission for the location of any wells and wellpads, and can impose conditions to ensure that the impact on the use of the land is acceptable (for example noise, dust, air quality, visual, archaeological and highway impacts).
Click here to read more
'...But how are secret cartels uncovered by the authorities?'
After the customary awkward five minute conversation explaining to puzzled acquaintances what it is that a competition lawyer actually does for a living, we are usually confronted with the above question after explaining the cartel work we do.
Our answer is that corporate whistleblowers continue to be very much en-vogue.
Click here to read more
Let's talk 'successors'
No, we’re not talking successors in line for the throne. Rather, we're talking the slightly less enchanting 'successor liability' rules under EU competition law and how they may apply in the context of mergers and acquisitions (M&A) being done in the Energy or other sectors.
Click here to read further
World’s largest offshore wind farm project gathers steam
Ed Davey MP, the Secretary of State for energy at the Department of Energy & Climate Change (DECC) announced recently that planning consent had been granted for what will be the world’s largest offshore wind farm off the UK's Lincolnshire and Norfolk coast, which is to be built by RWE with a £3.6 billion investment by Triton Knoll. It is expected to produce 1,200 megawatts per hour. It was also announced that construction was set to begin at Pen y Cymoedd in South Wales where a new onshore wind farm will be built with Vattenfall investing £400 million.
For the announcement click here
India unveils plans for massive concentrated solar power
The United Nations Framework Convention on Climate Change (UNFCCC) has approved India’s largest solar project as part of its emissions trading scheme. The Clean Development Mechanism’s (CDM) latest project is a 100MW concentrated solar power installation to be constructed in India's state of Rajasthan. It is expected to generate 2.15 million carbon credits during the initial 10 years of operations. The total project cost is estimated to US$ 29 million and was part financed by the Asian Development Bank and the US Export-Import Bank.
For more information click here
International Energy Agency (IEA) unveils new technology proposals on Carbon Capture & Storage
Carbon capture & storage (CCS) is a group of technologies that can allow continued use of fossil fuels in energy production. CCS is the only large-scale mitigation option currently available for deep cuts in emissions from industrial sectors such as cement, iron and steel, chemicals and refining. A new IEA publication "Technology Roadmap: Carbon capture and storage 2013 Edition" shows how CCS could contribute a significant one-sixth of the CO2 emission reductions required in 2050 from the energy sector to meet the global climate goal of limiting the temperature rise to 2 degrees Celsius. To do that, the IEA calls for strong action by governments and business to construct a new CCS industry capable of capturing and storing about 7 gigatonnes (Gt) of CO2 in 2050. By way of comparison, today’s global gas industry produces around 2.5 Gt of natural gas annually.
For more information click here