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DCO Weekly: 28 March 2019

Latest developments including a new Carbon Capture Usage and Storage (CCUS) Advisory Group, a new industry group to "devise visionary floating wind plan", OGA to promote collaboration with offshore renewables, update on the Fracking (Seismic Activity) Bill, Welsh plan to cut emissions unveiled, Government response to Thames Estuary 2050 Growth Commission’s report and Southampton to London Pipeline route confirmed.

Select a story to read more:

Comment by Nick McDonald, Energy & Infrastructure Planning Legal Director
New Carbon Capture Usage and Storage (CCUS) Advisory Group announced by Energy and Clean Growth Minister
Future of mobility: infrastructure and tech at heart of UK strategy
RenewableUK announces new industry group to "devise visionary floating wind plan"
UK Oil & Gas Authority promoting collaboration with offshore renewables
Fracking (Seismic Activity) Bill
Welsh plan to cut emissions unveiled
Thames Estuary 2050 Growth Commission - government response
Southampton to London pipeline route confirmed

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Comment by Nick McDonald, Energy & Infrastructure Planning Legal Director

We report below on the Government having set up the Carbon Capture Usage and Storage (CCUS) Advisory Group, which includes various major energy and electricity companies. It is notable that the acronym that was in use for many years - CCS - is fast becoming CCUS, reflecting an increased focus on the use of carbon dioxide, not just its storage. That is undoubtedly a good thing - gases can be re-used too - but it is clear that storage is going to remain the end point for the majority of the captured carbon dioxide given the volumes that can be put to beneficial use. Let's hope that the Advisory Group is able to help steer the Government towards regulations and incentives which will engage and excite the industry, and start it on the road to becoming one which can stand on its own two feet.

There's also two news nuggets on offshore wind - the industry is setting up a group to promote 'floating wind' technology. We are already used to seeing pictures of floating solar farms on reservoirs and lakes (including one I saw recently in China configured to look like a panda, clearly led by an engineer with a strong sense of fun), and it makes sense to build on the success of the UK offshore wind industry by investigating significant technological improvements. Could 'floating wind' see yet further reductions in the costs per megawatt of offshore wind? The second story covers the Oil and Gas Authority (OGA) looking to increase collaboration between offshore old and gas and renewables - the potential benefits for both are obvious, with the two industries at very different points in their life cycles. The OGA will also be looking further (more deeply?) at carbon storage, taking us back to the start of this commentary.

It is good to see that there is still a lot of infrastructure promotion, thought and innovation going on, despite the current huge political and media focus elsewhere.

New Carbon Capture Usage and Storage (CCUS) Advisory Group announced by Energy and Clean Growth Minister

Energy and Clean Growth Minister, Claire Perry, announced a new industry-led group when speaking at a meeting of the government's CCUS Council. According to reports, Perry said the new Advisory Group will help ensure that we take full advantage of the potential of this emerging industry, with a view to deploying the first CCUS facility in the UK from the mid-2020's.

The CCUS Advisory Group includes BP, Cadent, Drax, National Grid, Shell and Tata Steel. It will advise on the potential incentives and regulations that are needed to promote the development of a CCUS market in the UK, looking at challenges and the regulatory and investment frameworks for the deployment of CCUS technology.

At the end of last year, BEIS announced plans for the UK’s first CCUS facility and funding worth £20 million to support the "construction of CCUS technologies at industrial sites across the UK", part of a "£45 million commitment to innovation" and to "invest up to £315 million in decarbonising industry, including the potential to use CCUS". The overarching ambition of the government's action plan is to deploy CCUS at scale by the 2030, subject to costs. See previous coverage in the DCO Bulletin.

C-Capture, a "world-leading chemical processes for carbon dioxide removal" has raised "£3.5m in new equity funding". Drax's biomass plant in North Yorkshire is trialing the C-Capture technology.

Paul Davies, chair of the group, reportedly said: "Forming the CCUS Advisory Group is a great step forward, as the public and private sectors will now work together to develop a detailed commercial framework to underpin CCUS delivery in the UK".

Future of mobility: infrastructure and tech at heart of UK strategy

The need to prepare the UK's infrastructure and modernise existing law to support new transport technologies has been identified in a new government strategy on how people will move around UK towns and cities in future. In its 'future of mobility: urban strategy', the government highlighted changes in transport technology, changes in demand for transport and changes in business models, and set out its "approach to maximising the benefits from transport innovation in cities and towns"

In its 'future of mobility: urban strategy', the government highlighted changes in transport technology, changes in demand for transport and changes in business models, and set out its "approach to maximising the benefits from transport innovation in cities and towns". See last week's coverage in the DCO Bulletin.

Infrastructure expert, Anne-Marie Friel of Pinsent Masons, said: "The publication of this strategy is a really important step in the UK’s journey to deal with the impact of digital transformation on the transport infrastructure network. Operators of transport infrastructure and the supply chains that work across them should be looking at how they are proactively planning for the future of mobility services. The legal and commercial impacts of these changes are likely to be far reaching and there is potential for material disruption to current business models."

"An effective strategy for future success is likely to require very different ways of thinking about data and collaboration than has previously been required. There will undoubtedly be new risks but there will also be new opportunities. The winners will be those organisations who are able to think differently about how to best unlock mobility benefits for customers," she said.

Read more analysis on Out-Law.

RenewableUK announces new industry group to "devise visionary floating wind plan"

RenewableUK, the renewable energy trade association, has announced the creation of the "Floating Wind Steering Group". The Group, whose members range from offshore developers and supply chain companies, through to UK regions, will promote a strategy for the deployment of large-scale floating wind farms in the UK, together with Scottish Renewables.

The Department for Business, Energy and Industrial Strategy (BEIS) is reportedly developing a white paper to revise the government’s electricity strategy and industry sees this an opportunity to promote the 'floating wind' market.

Deputy CEO at RenewableUK, Emma Pinchbeck, said that the "UK has a unique opportunity to pioneer a new technology which has a truly global potential" and that "industry leaders are working together to ensure that Government seizes that opportunity”.

UK Oil & Gas Authority promoting collaboration with offshore renewables

The UK Oil and Gas Authority (OGA) has secured grant funding from the Better Regulation Executive's Regulator's Pioneer Fund to explore the potential of a more integrated offshore energy sector. The OGA will collaborate with the Department for Business, Energy and Industrial Strategy (BEIS), The Crown Estate, Ofgem and other stakeholders and study closer links between oil and gas developments and offshore renewables.  

The OGA has been looking at how it can support an energy transition alongside "maximising economic recovery of UK oil and gas" and it expects to publish a policy position in spring 2019.

The project will investigate the "mix of energy sources and storage solutions needed for the transition to a low carbon economy in areas", including the potential for connecting offshore oil and gas platforms to offshore wind farms. It will also consider carbon capture, and transport and storage initiatives that could use legacy oil and gas infrastructure. According to reports, the OGA will focus on power hubs in the North Sea and large-scale electricity and hydrogen production from wind combined with carbon and energy storage solutions.

Andy Samuel, CEO of OGA has described this investigation as an "exciting opportunity to advance the energy transition agenda, looking at practical steps that can be taken and how we as regulators can support that".

"Oil and gas will be required to power our economy and heat our homes for the foreseeable future, but to me it is clear there are great opportunities now to more closely link up all forms of offshore energy production to generate power more cleanly and efficiently", said Samuels'  

The project is expected to conclude in spring 2020.

Fracking (Seismic Activity) Bill

The Fracking (Seismic Activity) Bill is a private members' bill. The first reading of the Bill took place on 19 March and the second reading in the House of Commons was scheduled to take place on 22 March 2019 but this will now be rescheduled.  

This Bill, if passed, would "require fracking operators to monitor seismic activity" caused by hydraulic fracturing (fracking) activities and operations, and to take action in the event that certain levels of seismic activity (in excess of 0.5 on the Richter Scale) were detected.

The Bill was introduced by conservative MP Lee Rowley for North East Derbyshire.

Welsh plan to cut emissions unveiled

The Welsh Government has published 'Prosperity for All: A Low Carbon Wales', a collection of 100 policies and proposals aimed at tackling climate change. The aim of the policies and proposals is to support and enforce an existing legally-binding target to cut Welsh emissions by 80% by 2050 which is set out in the Environment (Wales) Act 2016.

The new Plan sets out the Welsh Government’s approach to reducing emissions and increasing efficiency in a "way that maximises wider benefits for Wales, ensuring a fairer and healthier society". It outlines "100 policies and proposals that directly reduce emissions and support the growth of the low carbon economy".

The Centre for Alternative Technology, which is located in Wales, welcomed the plan but urged the Welsh Government to show greater ambition and enshrine into law a target of net zero emissions.

Thames Estuary 2050 Growth Commission - government response

The Thames Estuary 2050 Growth Commission published its report on 25 June 2018.The government has now responded to the report, outlining its plan to deliver the Commission’s vision.  

The government has committed in its response to the creation of a "new £1 million strategic board, to be chaired by an independent Thames Estuary Envoy, to support the "delivery of the vision and champion the Thames Estuary with key stakeholders, including local and central government". In addition, a new "cabinet-level ministerial champion" will be established to act as advocate.

In order to explore "ambitious housing and infrastructure deals with authorities in the Estuary" the government has indicated that it will explore the "potential for at least two new locally-led development corporations". It will also continue to pursue "transport infrastructure investment in the Estuary, including investing around £200 million of Local Growth Fund, £125 million on improvements to the strategic road network at Bean and Ebbsfleet, and multi-billion-pound investments in the Lower Thames Crossing and the Elizabeth Line".

The response outlines the plans for a new "cross government group to realise the wider benefits of the Lower Thames Crossing", combined with support for local partners in promoting and improving transport links from "Abbey Wood to Ebbsfleet in Kent". The government will agree 'Local Industrial Strategies' that align with the UK Industrial Strategy in order to increase productivity.

Southampton to London pipeline route confirmed

Esso has confirmed the route for its replacement underground pipeline project.  

The project would require development consent from the Secretary of State for Energy as it meets the thresholds for a Nationally Significant Infrastructure Project (NSIP) under the Planning Act 2008 regime.

Esso's project proposals are to "replace 90km of [its] 105km underground aviation fuel pipeline that runs from our Fawley Refinery near Southampton, to [its] West London Terminal storage facility in Hounslow.

According to the Planning Inspectorate's (PINS) website, a formal application for a Development Consent Order (DCO) to authorise the development of the project is expected in quarter two of 2019.

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