A plan of action setting out the role, responsibilities and policy of UK energy regulator Ofgem in relation to the protection of the environment was published on Monday. Ofgem’s role is mainly to encourage effective competition in the industry, but the Utilities Act 2000 introduced environmental obligations, which the regulator must consider.
Ofgem’s Chief Executive Callum McCarthy said, “The environmental issues associated with the production, distribution and consumption of gas and electricity are important. Ofgem addresses these seriously and carefully. Our Environmental Action Plan explains how we intend to pursue our responsibilities in relation to the environment.
Ofgem backs the government position, that major environmental and social issues in the industry are matters for ministers and should be implemented by legislation.
The Plan, published after wide consultation, sets out both the guiding principles which will determine how Ofgem will approach environmental issues and Ofgem’s priority areas for work with important environmental implications.
The report identifies priorities for Ofgem within its overall work programme and divides these between electricity generation issues, transmission and distribution, and supply.
Electricity generation – Assessing the affects of Neta on renewables and CHP, encouraging emissions trading to assist efficient compliance with environmental standards and continues focussing on the CHP sector.
Transmission and distribution – Working to reduce losses and carrying out a review of embedded generation.
Supply – Administering renewables exemptions to the Climate Change Levy, administering the Renewables Obligation and the government’s Energy Efficient Commitment.
Ofgem point out that it is only one of several bodies in the UK involved either directly or indirectly , in the regulation of environmental aspects of the gas and electricity industries.
A KPMG report, commissioned by Ofgem, on environmental reporting is also published this week. It is intended to help Ofgem work with other statutory bodies and industry to improve the quality of environmental reporting by gas and electricity companies.