Boosts for microgeneration technologies

Introduction

The Climate Change and Sustainable Energy Act 2006 provides miscellaneous provisions relating to UK measures to combat climate change. Many of these measures are “framework” in nature, in that they set out objectives and powers designed to inform and develop future legal and policy developments. Indeed the Act is very interesting (and unlike most Acts) in the sense that it first words clearly sets out the principal purpose of the Act. This is “to enhance the United Kingdom’s contribution to combating climate change”. Fuel poverty and the desirability or securing diverse and viable long-term energy supply are also express matters which public authorities and the Secretary of State must have regard to in exercising functions under the Act, but combating climate change is the “principal” purpose.

Reporting and Targets

The Act provides for various reports and targets to be generated in relation to greenhouse gas emissions. One of these provisions will be of particular interest to the cleantech and real estate sectors. It relates to microgeneration. By 1st November 2008, the Secretary of State must take a view as to whether “it would be appropriate to designate one or more” microgeneration targets in England, Scotland and Wales (Sections 4(2) and 29(3)). If the Secretary of State takes this view, then the targets must be designated and published in the period 1st November 2008 to 31st March 2009. If such a view is not taken then a statement of the reasons for such view must be published.

Microgeneration

This is defined to mean the generation of electricity or the production of heat from certain technologies or sources or energy, provided the capacity in the case of generation of electricity is 50 kilowatts or less and in the case of production of heat is 45 kilowatts thermal or less.

The current microgeneration technologies and sources are;

• Biomass
• Biofuels
• Fuel cells
• Photovoltaics
• Water (including waves and tides)
• Wind
• Solar power
• Geothermal
• Combined heat and power systems

These technologies and sources are shortly to be joined by “heat from air, water or the ground” (i.e. air, water and ground source heat pumps). This is to be achieved by means of a statutory instrument, entitled the Climate Change and Sustainable Energy Act 2006 (Sources of Energy and Technologies) Order 2008. A draft of this is currently before Parliament. The Order is expected to come into force on 23rd July 2008.

Real Estate and Cleantech

The cleantech sector has an obvious and direct interest in the above developments. The real estate sector will have both a direct and indirect interest. Much of this technology will be used in the built environment and thus directly applicable to real estate. The indirect point is that as the provisions of this Act fall into place and the various reports and targets become clearer, the planning authorities will simply have to have regard to this. In short whilst microgeneration is already on the real estate development agenda, it is set to rise up that agenda.