Climate Change and Sustainable Energy Act 2006

The Climate Change and Sustainable Energy Bill received Royal Assent on 21 June 2006. The main purpose of this new legislation is to enhance the UK’s contribution to combating climate change. The first provisions will come into force after 21 August 2006.

A brief summary of the main provisions of the Climate Change and Sustainable Energy Act 2006 is as follows:

• Microgeneration: The Act provides that the government must set and meet national targets for the number of installed microgeneration systems. In addition, the Act includes provisions to make energy companies pay a fair price for electricity from microgeneration. An effective way to address such targets could be through the incorporation of microgeneration provisions in public procurement contracts.
• Reporting on greenhouse gas emissions: From 1 January 2007, the government will be required to report to Parliament on an annual basis on the level of greenhouse gas emissions in the UK and action being taken to reduce it.
• Carbon emissions reduction obligation: This will replace the existing energy efficiency obligation, which encourages gas and electricity companies to promote efficient use of gas and electricity by consumers. The scope of the obligation will be broadened such that consumers will not only be encouraged to improve efficiency but also to use electricity / heat from microgeneration and low emissions sources.
• Community energy and renewable heat: The government must promote community energy projects. This is likely to interact with the implementation of the Energy Performance of Buildings Directive, which sets out that district heating or cooling schemes should be considered before the construction of large new buildings. Local planning authorities may influence the success of community energy schemes through making planning permission for certain developments conditional on the use of such schemes.