SBPE16 presentation by Andrew Park of Swan Energy

1. Government Review of Business
Energy Taxation – The implications
for your organisation
Andrew Park
Swan Energy Ltd

2. Existing Energy Taxes
• Road Fuels
• Oils
• Gas
• Electricity

3. Natural Gas
• CCL
• CRC
• VAT

4. Electricity
• EU ETS – CPF
• RO
• FITs
• EMR
• CFD
• CCL
• CRC

5. What’s New - Taxation
• CRC to be scrapped – in 2019
• CCL to increase in line with inflation
• CCL to be rebalanced – gas, LPG & other
fuels
• CCL step increase – in 2019

6. Financial Impacts
• CCA’s
• EU ETS
• CCL on other fuels
– Process gas
– LPG
– Heating oil
• Treasury Data

7. What’s New – Carbon Reporting
• CRC to be scrapped – in 2019
• Single reporting framework proposed
• ESOS to be extended?
– Scope?
– Participants?
– EU ETS?
– CCA?

8. Consultation
• Summer 2016
– “New, simplified energy and carbon reporting
framework”
– To be introduced by April 2019
– Mandatory annual reporting
– Board level sign off
– Public disclosure of data

9. Consultation
• Summer 2016
– Alignment of data collection and reporting
deadlines
– No longer need to define operational boundaries
– Integrate compliance and reporting
requirements:
• CCA’s
• EU ETS
• ESOS
• Any new scheme

10. Consultation
• Summer 2016
– All large UK undertakings
• Satisfy inclusion criteria for ESOS
• Include large public sector organisations
• Include large third sector organisations
– Mandatory reporting of listed companies to
remain

11. Management Impacts
• Wider involvement
• Wider scope
• Less transparency within organisations
• Verification of data?

12. Other Considerations
• Other elements of energy costs are
increasing
– Electricity pass through charges increasing

13. •Since 2011, the growth 3rd party costs have driven price increases
•By 2019 they are forecast to account for over 60% of the price
•Funding of renewable energy is the main driver behind cost increases. Currently RO, FiT and EMR costs will account for 18% of
the cost.
•Infrastructure enhancements to support renewable generation is also impacting DUoS and TNUoS
Chart courtesy of E.ON UK

14. Other Considerations
• Other elements of energy costs are
increasing
– Electricity pass through charges increasing
– CMA report this month calls for transmission
losses to be borne by generators 100% and be
cost reflective.
– Heat Network Regulations

15. Conclusions
• Costs
– CRC participants benefit
– Costs now smeared across all industry, commerce and
public sector
– CCL on fuels to increase faster than on electricity
• Carbon Reporting
– Wider participation
• All large organisations including public sector
– Wider scope
– Board sign off & publication of data
– Data verification?

16. Come and discuss these issues at the
Energy Regulation: Compliance and Costs
round table discussion
this afternoon at 15:10