National Renewable Energy Action Plan for the United Kingdom Article 4 of the Renewable Energy Directive 2009/28/EC 1

TABLE OF CONTENTS Section Page 1. Summary of National Renewable Energy Policy 4 2. Expected Final Energy Consumption 2010-2020 8 3. Renewable energy targets and trajectories 11 3.1. National overall target 11 3.2. Sectoral scenarios and trajectories 11 4. Measures for achieving the targets 15 4.1. Overview of all policies and measures to promote the use of energy from renewable resources 15 4.2. Specific measures to fulfil the requirements under Articles 13, 14, 16 and Articles 17 to 21 of Directive 2009/28/EC 26 4.2.1. Administrative procedures and spatial planning (Article 13(1) of Directive 2009/28/EC) 26 4.2.2. Technical specifications (Article 13(2) of Directive 2009/28/EC) 63 4.2.3. Buildings (Article 13(3) of Directive 2009/28/EC) 64 4.2.4. Information provisions (Articles 14(1), 14(2) and 14(4) of Directive 2009/28/EC) 73 4.2.5. Certification of installers (Article 14(3) of Directive 2009/28/EC) 79 4.2.6. Electricity infrastructure development (Article 16(1) and Article 16(3) to (6) of Directive 2009/28/EC) 81 4.2.7. Electricity network operation (Article 16(2) and Article 16(7) and (8) of Directive 2009/28/EC) 93 4.2.8. Biogas integration into the natural gas network (Article 16(7) and Article 16(9) and (10) of Directive 2009/28/EC) 97 4.2.9. District heating and cooling infrastructure development (Article 16(11) of Directive 2009/28/EC) 99 4.2.10. Biofuels and other bioliquids ��� sustainability criteria and verification of compliance (Articles 17 to 21 of Directive 2009/28/EC) 100 4.3. Support schemes to promote the use of energy from renewable resources in electricity applied by the Member State or a group of Member States 108 4.4. Support schemes to promote the use of energy from renewable resources in heating and cooling applied by the Member State or a group of Member States 120 4.5. Support schemes to promote the use of energy 125 2

from renewable resources in transport applied by the Member State or a group of Member States 4.6. Specific measures for the promotion of the use of energy from biomass 138 4.6.1. Biomass supply: both domestic and trade 138 4.6.2. Measures to increase biomass availability, taking into account other biomass users (agriculture and forest-based sectors) 142 4.7. Planned use of statistical transfers between Member States and planned participation in joint projects with other Member States and third countries 148 4.7.1. Procedural aspects 148 4.7.2. Estimated excess production of renewable energy compared to the indicative trajectory which could be transferred to other Member States 149 4.7.3. Estimated potential for joint projects 149 4.7.4. Estimated demand for renewable energy to be satisfied by means other than domestic production 150 5. Assessments 151 5.1. Total contribution expected of each renewable energy technology to meet the binding 2020 targets and the indicative interim trajectory for the shares of energy from renewable resources in electricity, heating and cooling and transport 151 5.2. Total contribution expected from energy efficiency and energy saving measures to meet the binding 2020 targets and the indicative interim trajectory for the shares of energy from renewable resources in electricity, heating and cooling and transport 157 5.3. Assessment of the impacts 157 5.4. Preparation of the national Renewable Energy Action Plan and the follow- up of its implementation 157 Annex of terms 159 3

1. Summary of National Renewable Energy Policy The importance of renewables in the UK The UK needs to radically increase its use of renewable energy. The UK has been blessed with a wealth of energy resources. Until now we have relied on the use of our coal, oil and gas supplies to supply our homes support our businesses and power our transport. As we look forward, we need to ensure that we also make the most of our renewable resources to provide a secure basis for the UK���s future energy needs. The depletion of our domestic fossil fuels reserves, combined with projected growth in global energy demand, puts our security of energy supply at risk. Exploiting our renewable resources will make a strong contribution to our energy needs and allow us to be less reliant on others. Our drive to increase the proportion of energy we obtain from renewable sources will not only increase the security of energy supplies in the UK, it will also provide opportunities for investment in new industries and new technologies. The UK Government will help business develop in this area to put the UK at the forefront of new renewable technologies and skills. The UK Government believes that climate change is one of the gravest threats we face, and that urgent action at home and abroad is required. We need to use a wide range of levers to decarbonise the economy. The development of renewable energy sources, alongside nuclear power and the development of carbon capture and storage, will also enable the UK to play its full part in international efforts to reduce the production of harmful greenhouse gases. The Way Forward This National Renewable Energy Action Plan provides details on a set of measures that would enable the UK to meet its 2020 target. But we want to go a lot further. We want to secure our energy supplies through 2020 and beyond and provide a sound framework for business to develop in the new industries, providing jobs and cutting harmful greenhouse gases. The Coalition: our programme for government1 sets out a range of proposals to ensure that we go as far as we can in exploiting the UK���s renewable energy resources. We are commissioning the independent UK Committee on Climate Change to review the renewables target and provide advice on increasing the level of ambition. We have also committed to make an Annual Energy Statement to the UK Parliament to set strategic energy policy and guide investment in all forms of energy including renewables. At the European level we are pushing for greater leadership in tackling international climate change by supporting an increase in the European Union emission reduction target to 30% by 2020. 1 http://www.cabinetoffice.gov.uk/media/409088/pfg_coalition.pdf 4

Meeting our 2020 target The history of energy production in the UK has been based around our natural resources of fossil fuels. This means that we have not been as active in our exploitation of our renewable resources ��� this must change. Compared to many other Member States, the UK is starting from a very low level of renewable energy consumption and this means that our challenge to meet the 2020 targets is even greater. The 2009 Renewable Energy Directive sets a target for the UK to achieve 15% of its energy consumption from renewable sources by 2020. This compares to only 1.5% in 2005. As chart 1 below shows, while there has been a small increase in renewable energy use in recent years, there will have to be a much greater level of deployment over the next decade in order to meet the target. Chart 1. Energy consumed from renewable sources in the UK2 �� Outturn �� Target DECC published the results of analysis and modelling to demonstrate how it might be possible to meet the 15% renewables target by 2020 as part of the UK Renewable Energy Strategy in 20093. The results of this analysis are the basis of the analytical work in this document. This analysis indicates that delivering 15% renewable energy by 2020 is feasible through domestic action and could be achieved with the following proportion of energy consumption in each sector coming from renewables: ��� Around 30% of electricity demand, including 2% from small-scale sources ��� 12% of heat demand ��� 10% of transport demand. 2 Outturn data from Digest of UK Energy Statistics (2009) http://www.decc.gov.uk/en/content/cms/statistics/publications/dukes/dukes.aspx 3 http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/res/res.aspx 5

It is important to stress that these figures are purely illustrative of how the overall 15% target for the UK could be met. They should not be taken as an upper limit to the UK ambition for renewables deployment. Given the dynamic nature of the energy market and the advances in technology that are being made, it is likely that the balance between different sectors could change as we go forward. Whatever the precise breakdown may be, we are putting in place the framework and taking the actions necessary to ensure that we meet our renewable goals. The framework for action The UK renewables policy framework is made up of three key components: ��� Financial support for renewables ��� Unblocking barriers to delivery and ��� Developing emerging technologies Financial support for renewables The UK is establishing a financial framework that provides long-term, comprehensive and targeted support for renewable technologies. We are looking at establishing a system of feed-in tariffs in electricity, as well as the maintenance of banded Renewable Obligation Certificates in order to ensure that our greater ambitions for renewable energy are supported and have the required investment. The Renewable Transport Fuel Obligation (RTFO) is also under review. We are reviewing how it could be aligned with the Renewable Energy Directive and we will consult on any proposed changes later this year. In addition to this support, we are looking into the possibility of a Green Investment Bank to help fund the introduction of renewable energy. As part of the creation of this bank, we will create financial products to provide individuals with opportunities to invest in the infrastructure needed to support the new green economy. It is not only business which will see benefits from higher levels of renewables. We will be providing opportunities for communities to benefit through the promotion of community-owned renewable energy schemes. We are currently investigating the opportunity for communities that host renewable energy projects to keep the additional business rates they generate as part of these schemes. This way local people will benefit from the power they are producing. Unblocking barriers to delivery We will be taking steps to identify and address those issues that affect the timely deployment of established renewable technologies such as: the planning system supply chains connection to the grid and availability and use of sustainable bioenergy. 6

The UK is taking positive steps to ensure that the grid is made smarter. A smarter grid will enable efficient use of networks, and greater renewable and distributed generation. We are looking into ways to accelerate the rollout of the smart grid and smart meters. We will be seeking industry views on this and publishing proposals this summer. Developing emerging technologies Offshore wind is a key area for development. We will work to develop an offshore electricity grid to support our continuing commitment to being world leaders in this technology. This new generation of offshore wind power will play a key role in meeting our 2020 target. Marine energy is also a priority for development in the UK. The UK is a natural place from which to develop marine energy and we are lucky to have such a uniquely rich wave and tidal resource. We will be encouraging the development and commercialisation of this industry over the coming decade. The world���s first full-scale wave and tidal stream devices are British innovations, which show we have the skills and know-how to develop a new world-leading UK-based energy sector. We are currently considering in detail how creating a network of marine energy parks can work to push the sector forward. Each marine energy park will be unique and different building on the strengths of the region in which it is based. The Government has also announced the promotion of anaerobic digestion as a key area for further development, and we are currently working with stakeholders to develop a strategy for delivering this commitment. Co-ordinating Delivery Within the Department of Energy and Climate Change (DECC), there is the Office for Renewable Energy Deployment (ORED) whose job it is within Government to ensure we meet our targets for renewable energy. This will be done by working closely with delivery partners and stakeholders to help accelerate deployment. ORED is currently undertaking a programme of work to develop a coordinated delivery plan to implement the commitments made in this National Renewable Energy Action Plan. This delivery plan is due to be published later this year. It should be noted that, while energy in Great Britain is generally a reserved matter for the UK Government, many of the mechanisms to help deploy greater levels of renewables are matters for Devolved Administrations. The UK Government is working closely with the Devolved Administrations in Wales, Scotland and Northern Ireland who have a key part to play in meeting our overall target. The Devolved Administrations are keen to increase the use of renewable energy, for example, the Welsh Assembly has recently published its own Low Carbon Energy Policy statement4 and the Scottish Government have chosen to implement a target of 20% of energy to be derived from renewable sources by 20205. 4 http://wales.gov.uk/topics/environmentcountryside/energy/renewable/policy/lowcarbonrevolution/?lang=en 5 http://www.scotland.gov.uk/Publications/2009/07/06095830/0 7

8 2. EXPECTED FINAL ENERGY CONSUMPTION 2010-2020 Table 1 includes estimates of final energy consumption that are consistent with the scenarios presented in the UK Renewable Energy Strategy, and underlying assumptions are given in the analytical annex published in July 20096. The additional energy efficiency forecasts include planned measures as of June 2009, but do not include additional measures such as those included in the UK Low Carbon Transition Plan7, published in July 2009. The reference scenario excluded planned measures, including the supplier obligation, smart meters and the carbon reduction commitment. We are undertaking work to factor these additional policies into our analysis and will update our trajectory in the near future. 6The analytical annex for the Renewable Energy Strategy can be found online at: http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/res/res.aspx 7http://www.decc.gov.uk/publications/basket.aspx?FilePath=White+Papers%5cUK+Low+Carbon+Transition+Plan +WP09%5c1_20090724153238_e_%40%40_lowcarbontransitionplan.pdf&filetype=4

Table 1: Expected gross final energy consumption of the UK in heating and cooling, electricity and transport up to 2020 taking into account the effects of energy efficiency and energy saving measures 2010 ��� 2020 (ktoe) 2005 2010 2011 2012 2013 2014 Base Year reference scenario additional energy efficiency reference scenario additional energy efficiency reference scenario additional energy efficiency reference scenario additional energy efficiency reference scenario additional energy efficiency Heating and cooling 66900 60000 60000 59200 58900 58600 58000 58100 57100 57500 56200 Electricity 32100 31800 31700 32000 31700 32300 31800 32600 31900 32900 32000 Transport 41704 40485 40485 40935 40935 41427 41427 41746 41746 41936 41936 Gross final energy consumption 154500 146600 146500 146800 146200 147300 146200 147700 146100 148100 145900 Final consumption in aviation 13200 12900 12900 13100 13100 13400 13400 13700 13700 14100 14100 Reduction for aviation limit 3600 3800 3800 4000 4100 4300 4400 4600 4700 4900 5100 Total consumption after reduction for aviation limit 150900 142800 142700 142700 142100 143000 141800 143100 141400 143200 140800 9

10 Table 1 Continued (2015 - 2020) 2015 2016 2017 2018 2019 2020 reference scenario additional energy efficiency reference scenario additional energy efficiency reference scenario additional energy efficiency reference scenario additional energy efficiency reference scenario additional energy efficiency reference scenario additional energy efficiency Heating and cooling 56900 55300 56300 54400 55800 53500 55500 52900 55100 52200 54800 51500 Electricity 33100 32100 33300 32100 33500 32100 33700 32200 33900 32300 34200 32400 Transport 42002 42002 42030 42030 42013 42013 41957 41957 41878 41878 41779 41779 Gross final energy consumption 148300 145600 148200 145100 148400 144800 148600 144600 148800 144300 149000 144100 Final consumption in aviation 14500 14500 14900 14900 15200 15200 15600 15600 15900 15900 16200 16200 Reduction for aviation limit 5300 5500 5700 5900 6100 6300 6400 6700 6700 7000 7000 7300 Total consumption after reduction for aviation limit 143000 140200 142500 139200 142300 138500 142200 137900 142100 137300 142000 136700 Notes to Table 1 1. 2005 figures are DECC statistics. Forecasts use assumptions t hat are consistent with those underpinning the Renewable Energy Strategy (see analytical annex8). 2. Additional Energy Efficiency measures do not include additional measures announced under the Low Carbon Transition Plan or any more recent proposals. 8 http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/res/res.aspx

3. RENEWABLE ENERGY TARGETS AND TRAJECTORIES 3.1. National overall target Table 2: National overall target for the share of energy from renewable sources in gross final consumption of energy in 2005 and 2020 (A) Share of energy from renewable sources in gross final consumption of energy in 2005 (S2005) 1.3% (B) Target of energy from renewable sources in gross final consumption of energy in 2020 (S2020) 15% (C) Expected total adjusted energy consumption in 2020 (ktoe) 136700 (D) Expected amount of energy from renewable sources corresponding to 2020 target (BXC) ktoe 20505 Notes to table 2: 1. 2005 figures are DECC statistics 2. Source of other figures: see notes to Table 1 3.2. Sectoral scenarios and trajectories Chart 2 shows the illustrative mix of technologies developed from our lead scenario. This suggests we could see around 30% of electricity, 12% heat and 10% transport energy come from renewable sources by 2020. This is one indication of the technology mix we could see come forward to meet the UK���s 15% target for renewable energy and does not represent fixed targets for particular sectors. It should not be taken as an upper limit to our ambition for renewables deployment. We are keen to go further and have commissioned the Committee on Climate Change to provide independent advice on increasing the level of ambition for renewables in the UK. Alongside this we are also taking strong, co-ordinated action to accelerate delivery by identifying and tackling the barriers to deployment that will enable the market to respond. Chart 2 ��� Illustrative mix of technologies in lead scenario, 2020 (TWh)9 9 Source: DECC analysis based on Redpoint/Trilemma (2009), Element/P��yry (2009) and Nera (2009) and DfT 11

Table 3: National 2020 target and estimated trajectory of energy from renewable sources in heating and cooling, electricity and transport 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 RES - H&C (%) 0.7 1 1 1 2 2 3 4 5 7 9 12 RES - E (%) 4.7 9 10 11 13 14 16 19 22 25 28 31 RES-T (%) 0.2 2.6 3.4 4.0 4.5 5.3 6.2 7.0 7.8 8.6 9.5 10.3 Overall RES share (%) 1.4 3 4 4 5 6 7 8 9 11 13 15 Of which from cooperation mechanism Surplus for cooperation mechanism -0.08 -0.08 -0.15 -0.15 -0.18 -0.18 0.03 0.03 0.00 0.00 As part B of Annex I of the Directive - relating to indicative trajectory 2011-2012 2013-2014 2015-2016 2017-2018 2020 RES minimum trajectory 4.04% 5.41% 7.47% 10.21% 15% RES minimum trajectory (ktoe) 5735 7634 10429 14105 20511 Notes to table 3: 1. Source: DECC analysis based on Redpoint/Trilemma (2009), Element/P��yry (2009),Nera (2009) and DfT 2. Renewable heat generation as a percentage of total heating and cooling energy demand 3. Renewable electricity generation as a percentage of total electricity demand 4. Renewable transport as a percentage of total transport energy demand 5. Renewable energy as a percentage of capped gross final energy demand 12

Table 4a: Calculation table for the renewable energy contribution of each sector to final energy consumption (ktoe) 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Expected gross consumption of RES for Heating and Cooling 475 518 621 756 937 1186 1537 2039 2719 3604 4746 6199 Expected gross final consumption of RES for Electricity 1506 2720 3195 3613 4061 4582 5189 6077 7053 8052 9008 10059 Expected final consumption of energy from RES from Transport 69 1066 1383 1663 1859 2223 2581 2927 3265 3596 3925 4251 Total 2050 4304 5200 6032 6856 7992 9307 11043 13037 15252 17679 20510 1.4% 3.0% 3.7% 4.3% 4.8% 5.7% 6.6% 7.8% 9.4% 11.1% 12.9% 15% Notes to table 4a: 1. Source: DECC analysis based on Redpoint/Trilemma ( 2009), Element/P��yry (2009) and Nera (2009) and DfT 2. According to Art.5(1)of Directive 2009/28/EC gaselectricity , and hydrogen from renewable energy sources shall only be considered once. No double counting is allowed. 3. Containing all RES used in transport including electricity, hydrogen and gas from r enewable energy sources, and excluding bi ofuels that do not comply with the sustainability criteria (cf. Article 5 (1) last subparagraph). 13

The figures in Table 4(b) below are based on the results of t he ���lead scenario��� from the UK���s Renewable Energy Strategy. Furthe r factors to be considered include planned analysis of the availability and deployment of biomass across the sectors and the European Commission���s clarification on definitions of terms such as ���wastes and residues��� for the purpose of the ���double counting��� of certain biofuels under the Renewable Energy Directive. It should be noted that this scenario is an illustration of one path to reaching our target and is therefore subject to amendment. The table includes an illustrative central scenario for uptake of electric vehicles, as assumed in the ���lead scenario��� from the UK���s Renewable Energy Strategy. Table 4(b): Calculation tablfor e the renewable energy in transport share (ktoe)10 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Expected RES consumption in transport23 69 1,066 1,383 1,663 1,859 2,223 2,581 2,927 3,265 3,596 3,925 4,251 Expected RES electricity in road transport 0 0 0 1 1 2 4 7 11 16 22 29 Expected consumption of biofuels from wastes, residues, non-food cellulosic and lingocellulosic material in transport 0 0 0 0 0 0 0 0 0 0 0 0 Expected RES contribution to transport for the RES-T target : (C)+(2,5-1)x(H)+(2- 1)x(I) 69 1066 1384 1664 1861 2227 2587 2937 3281 3619 3958 4295 Notes to table 4b: 1. Containing all RES used in transport including electricity, hydrogen and gas from renewable energy sources, and excluding bi ofuels that do not comply with the sustainability criteria (cf. Article 5 (1) last subparagraph). 10 The Renewable Fuels Agency (RFA) reported that in 2008/09 157 million litres (12.2%) of biofuel supplied in the UK was from wastes and by-products (Based on the current UK definition of waste and residues). This figure is expected to increase with the retention of the 20ppl duty differential and introduction of double rewards as part of the proposed amendments to the Renewable Transport Fuel Obligations Order 2007 14

4. MEASURES FOR ACHIEVING THE TARGETS 4.1. Overview of all policies and measures to promote the use of energy fr om renewable resources Table 5 shows a broad overview of measures the UK is undertaking to promote the use of energy from renewable resources. Table 5: Overview of all policies and measures to promote use of renewable resources Name & reference of the measure Type of measure Expected Result Targeted group and or activity Existing or Planned Start & end dates Renewables Obligation (RO) Regulatory Increase generation of renewable electricity from a range of technologies across all scales (excepting most types of microgeneration following introduction of FITs) to 30%. Primarily large scale renewable electricity generation by professional energy companies. Existing Planned Started 2002 with support available to 2037 (2033 in Northern Ireland). The new Government has proposed introducing a feed- in tariff for larger generation to operate alongside the RO. Feed in Tariffs (FITs) Financia l Incentivise generation of low- carbon electricity from a range of small scale technologies. Households, communities and small businesses investing in projects up to 5MW. Existing Introduced on 1 April 2010, this will close to new entrants in 2021 (although these new entrants will be eligible for 20 years support) 15