The Swan Energy team has produced a guidance document to summarise the updates shared in: Developing the UK Emissions Trading Scheme (UK ETS) – Main Response. Over the coming weeks we will share key points for different audiences. This update is a summary for Electricity Generators.
1 – Reviewing the Electricity Generator Definition
The Authority will proceed with the proposed changes to the definition. This will allow operators to change their classification as an electricity generator if they have recently put a stop to the export of electricity to third parties.
Those operators who have exported some electricity during the current baseline period but has since been decommissioned or is no longer connected to the grid, may provide a statement and evidence to their respective Regulator as part of their free allocation application, stating that they will no longer produce electricity for sale.
The Authority is also aware that there are scenarios in which the sale of electricity is not the primary purpose of generation. The Authority has decided that minimal electricity exports will also be excluded from the electricity generator definition. “Minimal” will be determined by comparing the installation’s exported electricity and generated electricity, and a threshold of 5% will be set. Should the installation more than 5% of their generated electricity, they will be treated as an electricity generator and their free allocation will be re-calculated.
2 – Combined Heat and Power Plants and Electricity Generator Definition
If an installation produced electricity for sale by means of a CHPQA-certified plant, operating as part of an operator’s industrial action, they will be excluded from the electricity generator classification. This change will be implemented from 2026 onwards.
3 – Potential for Free Allocation
The Authority are implementing a change to legislation to allow electricity generators who have not exported measurable heat produced by means of high-efficiency cogeneration in the “relevant period”, but start to do so in following scheme years, to be eligible for free allowances once they can demonstrate that they meet the high-efficiency cogeneration eligibility criteria set out in Article 2a of the FAR.
If anyone would like to receive the full summary document from Swan Energy, please call us on 01484 843867 or email info@swanenergy.co.uk and we’ll be in touch.
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