» Call for Applications – Electricity Capacity Market – Verification of Fossil Fuel Emissions Declarations

10 September, 2020

The United Kingdom Accreditation Service is proposing to establish a project to develop ISO 14065: 2013 accreditation for conformity assessment bodies delivering verification of Fossil Fuel Emissions Declarations in compliance with Capacity Market Rules. This call is open to those verification bodies already accredited under ISO 14065: 2013 for Activity Group 1b) under the EU Emissions Trading Scheme. Verification bodies are required to apply for an extension to their ISO 14065 scope. It is anticipated that this extension to scope will be assessed by off-site document review. Applicants will need to demonstrate their understanding of the Rules as they apply to verification, and that they have suitably competent resources to carry out the verification activities.

Further information on the scheme can be found below, and enquiries about the scheme should be directed to Davide Panzeri Davide.Panzeri2@beis.gov.uk

Those who wish to apply are requested to apply to the Applications Department on applications@ukas.comcopied to the Development Coordinator Emily Robinson (DevelopmentEnquiries@ukas.com). Information on how to apply can be found here.

Timescales

Potential applications are asked to note that in order to be able to offer accredited verification by the next deadline of 1 July 2021, the timescales for achieving extensions to scope are short. Applications received in October 2020 are more likely to allow extensions to scope to be achieved with enough time to for verification bodies to offer accreditation by the July 2021 deadline for verified emissions, although this will be dependent on successful completion of the assessment process.

Applications will be accepted after October 2020 and from those bodies who do not already have accreditation for ISO 14065, on the understanding that they may not achieve accreditation in time to participate in the next round of verifications.

Enquiries about accreditation for this scheme should be directed to the UKAS Development Manager janet.gascoigne@ukas.com. If you intend to apply, please let Janet know as soon as possible for planning purposes.

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Summary information on the Electricity Capacity Market verification requirements:

The government established the Capacity Market (CM) as part of its Electricity Market Reform policy in 2014. The purpose of the CM is to ensure security of electricity supply by providing all forms of capacity capable of contributing to security of supply with the right incentives to be on the system and to deliver electricity when needed. The CM secures the capacity required to meet peak demand in a range of scenarios through auctions held four-years (T-4) and one year (T-1) ahead of delivery.

The CM is governed by the Electricity Capacity Regulations 2014 (the Regulations) and the Capacity Market Rules (“the Rules”).

The Regulations provide the overarching policy and design, including the powers the Secretary of State (SoS) will hold in overseeing the CM. The Rules provide the practical detail on how the CM will operate under the Regulations. They cover the:

  • details on the contents of capacity agreements
  • obligations of capacity agreement holders, including penalties
  • technical operation of the Capacity Market.

On 4 July 2019, the EU’s recast Electricity Regulation (“the Electricity Regulation”) came into effect as part of the EU’s Clean Energy Package. Article 22 of the Electricity Regulation outlines design principles for capacity mechanisms including requirements in respect of existing mechanisms such as the GB Capacity Market (CM). Article 22(4) introduced a requirement for capacity mechanisms to include carbon emissions limits for both new build capacity and existing capacity.

The Government consulted, between 22 July 2019 and 13 September 2019, on arrangements for applying the emissions limits in respect of existing capacity (generating units which are Fossil Fuel Components that existed before 4 July 2019). Following the publication of the ACER guidance on 17 December 2019, the Government consulted, between 3 February 2020 and 2 March 2020, on arrangements for reporting and verifying carbon emissions in the CM. These arrangements were introduced through the Capacity Market (Amendment) (No. 2) Rules 2020[1] and Capacity Market (Amendment) (No. 3) Rules 2020[2]. An informal Consolidated Version of the Capacity Market Rules dated 20 July 2020 can be found here. These introduce a reporting and verification mechanism for the introduction of CO2 emission limits in the CM.

There are two carbon emissions limits that apply in the CM to capacity which use Fossil Fuels[3] to produce electricity:

  • 550g of CO2 of Fossil Fuel origin per kWh of electricity generated (“the Fossil Fuel Emissions Limit”); and
  • 350 kg CO2 of Fossil Fuel origin on average per year per installed kWe (“the Fossil Fuel Yearly Emissions Limit”).For capacity that started commercial production on or after 4 July 2019, the Fossil Fuel Emissions Limit applies from 4 July 2019.
  • For capacity that started commercial production before 4 July 2019, the Fossil Fuel Emissions Limit and Fossil Fuel Yearly Emissions Limit apply from 1 October 2024

The Government has implemented the reporting and verification mechanism as follows:

  • Existing Generating CMUs and Proven DSR CMUs: During prequalification for auctions for the Delivery Year 2021 and beyond (where the CMU comprises of capacity which started commercial production on or after 4 July 2019) and for auctions for the Delivery Year 2024/25 and beyond, (where the CMU comprises of capacity which started commercial production before 4 July 2019) an Existing Generating CMU or Proven DSR CMU which contains a Fossil Fuel Component or a storage facility connected to a Fossil Fuel Component will be required to submit a Fossil Fuel Emissions Declaration to the Delivery Body. If there is a material change to the CMU or a component comprised in that CMU subsequent to the award of the Capacity Agreement, such that the CMU will contain a Fossil Fuel Component or storage facility connected to a Fossil Fuel Component, a Fossil Fuel Emissions Declaration will be required as soon as reasonably practicable after the capacity provider becomes aware of the material change.
  • New Build CMUs, Refurbishing CMUs and Unproven DSR CMUs: During Prequalification, applicants for New Build CMUs, Refurbishing CMUs and Unproven DSR CMUs will be required to submit a Fossil Fuel Emissions Commitment undertaking that the relevant CMU will either not comprise of components which will not comply with the emission limits or if the CMU does contain a Fossil Fuel Component or storage facility connected to a Fossil Fuel Component, the relevant person will submit a Fossil Fuel Emissions Declaration at the milestone relevant to the CMU type.

A CMU will be able to rely on a previous Fossil Fuel Emissions Declaration when entering the same CMU as part of a future Prequalification application, unless there has been a material change since that Declaration was submitted – i.e. any change to the CMU such that the CMU will contain a Fossil Fuel Component or storage facility connected to a Fossil Fuel Component, or any change to a component comprised in that CMU such that the emissions of that component could be or are altered. In these circumstances, an “updating” Fossil Fuel Emissions Declaration will be required as soon as reasonably practicable after the person becomes aware of the material change.

The emissions of components specified in a Fossil Fuel Emissions Declaration with an “Installed Capacity” above 1 MW must be verified by an “Independent Emissions Verifier”. A signature from an Independent Emissions Verifier will not be required until the Prequalification Window in 2021. (The window usually opens in July each year). The Verifier is required to be accredited under ISO 14065 for the relevant scope.

Note: Useful Background Information on the CM emissions limits reporting and verification mechanism can be found In the Capacity Market: Government Response To Consultations On Future Improvements, Emission Limits And Coronavirus Easements Government Response to consultations May 2020 and in the Carbon Emissions Limits in the Capacity Market Guidance.

Government guidance on the operation of the scheme can be found here.

 

[1] The Capacity Market (Amendment) (No.2) Rules 2020

[2] The Capacity Market (Amendment) (No.3) Rules 2020

[3] As defined in Rule 1.2.1. Waste is not considered a fossil fuel (unless the waste is something which was produced directly or indirectly from a fossil fuel listed in Rule 1.2.1 (a) to (f) for use as a fuel for a Generating Unit, and, when burned, it produces a greenhouse gas) so energy-from-waste installations are not subject to these emissions limits.