DECC publishes energy red tape review – is new energy taxation, with ESOS at the core, around the corner?
Stage 1 of DECC’s examination on easing red tape in the energy sector is here. What does the review have to say, and what future changes does it promise?
What does the red tape review contain?
In general, the review’s focus admits existing energy regulations are burdensome on business. In doing so, it pulls few punches, promising to administer future regulations more openly and minimise the number of rules, plus how they interact with one another.
Crucially though, much anticipated DECC promises on ESOS* and CRC, and the push towards a new, single energy tax and reporting framework remain incomplete as yet.
DECC says; ‘The review, which government aims to complete by Spring 2016, is considering options to streamline energy and emissions reporting,’ But DECC provided this latest update in March 2016, which many people consider already to be Spring.
Therefore, it remains unclear exactly when any concrete changes will be announced, but they are in the pipeline. Either way, the changes promise: ‘The ambition of ensuring any business will face a single domestic energy tax and reporting framework.’
At Concept Energy Solutions, we believe that if DECC can meet this ambition, it will have achieved a major coup, one that would grow business energy efficiency for the better. Our view is that many firms will therefore be waiting hopefully, in the expectation that genuinely useful change is fast approaching. We hope to see moves sooner rather than later.
The headlines in DECC’s announcement:
- Recognition that…Energy regulation and enforcement isn’t specific enough, or is designed in a way which doesn’t consider the range of businesses and business models they affect
- Acceptance of the Consultation feedback that…Data reporting is too frequent, overlapping and can be too onerous. There are multiple and frequent overlapping data requests.
- Specific regimes which businesses find particularly onerous were the CRC Energy Efficiency Scheme [CRC], Energy Savings Opportunity Scheme [ESOS] the Climate Change Levy [CCL], the Carbon Price Floor (CPF), the Renewables Obligation [RO] and the Energy Company Obligation [ECO]
- Adhering to the required legislation, codes, rules, and other statements can be burdensome
- The scale of change and lack of clear direction from Ofgem and the Department of Energy and Climate Change (DECC) has led to significant opportunity costs and lost investment
DECC’s internal targets
DECC has also promised to develop and publish by the end of 2016 a, ‘Clearer approach to working and communicating with stakeholders in an effective and efficient way,’ It will simplify processes and rules, and adopt a risk based approach to compliance
Further, it will produce a regular, annual, forward look, outlining the priorities and key changes in the energy sector over each coming year.
The signals are positive. This type of new approach could establish further, truly beneficial moves from the DECC regime.
* Concept Energy is an accredited ESOS assessor. Are you still struggling to comply with ESOS? We are here to help.
