Battery storage projects—property issues This Practice Note focuses on a ‘single landowner’ development where a new lease is granted for a stand-alone facility or where there is an existing lease in place and the battery storage facility is to be co-located on a site where the developer already has a lease. Several factors relating to land rights will need to be considered early in the project decision making process which will be relevant for developers of prospective battery sites as well as for developers who are looking for new development opportunities at existing sites. The key issues are discussed below. Property considerations for standalone battery projects A patchwork of rights Standalone battery storage developments typically involve a lease of the installation site with ancillary rights over the landowner’s retained land (the ‘Lease’). The Lease would usually be granted pursuant to an option agreement or conditional agreement for lease. Either of these routes would give the developer: • the ability to delay taking a lease of the site until a time when relevant planning and permitting is in place, and • greater security in investing resources in the planning and development process as they know that the battery site is secured without having to incur expenditure on rent during the pre-operational phase of the battery Freehold acquisition of the installation site (likely pursuant to a conditional sale contract) would also function from
Petroleum transportation agreements Introduction When transporting petroleum through a pipeline, there are two options available to the owner of the petroleum: • build and own a dedicated pipeline from the relevant field to its intended place of delivery, or • tie-in a dedicated pipeline from the field to a third party’s adjacent pipeline(s) If using the first option, the field owners will typically enter into a Pipeline Operating Agreement (POA) to govern the construction and operation of the pipeline among themselves (the terms of which are similar to a Joint Operating Agreement (JOA)) (see Practice Notes: The purpose and the principles of the joint operating agreement and Joint operating agreement—key clauses for more information on JOAs). In general, it will set out ownership interests, formation of an operating committee and voting mechanisms, capacity entitlement (usually proportionate to ownership interests), allocation of costs and liabilities associated with the pipeline, and appointment of an operator. The POA gives each of the owners their own capacity to transport petroleum in the pipeline without the need to pay a third party for transportation. In the alternative however, the field owners will enter into a transportation agreement with owners of an existing pipeline to provide certain defined services in return for payment. It is this second option, the use of a transportation agreement for use of an existing pipeline, that is
Nuclear sector projects The UK nuclear market for construction industry supply chain members is significant. The Nuclear Decommissioning Authority projected spend of £3.3bn for the financial year 2015/16 purely in relation to civil decommissioning—add in military decommissioning and the significant future value of the nuclear new build market and the overall market is huge. The sector requires a wide range of construction-related inputs, from large-scale civil engineering, demolition and project management, through to design services and facilities management (and much more besides). Some of these services require specialist nuclear know-how, others do not (although all members of the nuclear supply chain need to be aware of the special considerations which apply to working in the nuclear sector). The nuclear sector is heavily regulated, especially in the UK, and the contracting structures and documents used can be correspondingly complex. This Practice Note provides an introduction to the sector from a legal adviser's perspective. Sector background The UK nuclear sector can be divided into: • decommissioning (of which civil (ie non-MoD) decommissioning represents the significant majority, and hence will be the focus of this Practice Note), and • a relatively fledgling new build market Decommissioning Simply put, nuclear decommissioning entails taking a designated nuclear site (often—but not always—the site of a nuclear power station which has ceased operating) and returning it to a safe non-radioactive, cleared state. There are numerous stages to this, and the
UK Civil Nuclear Regulatory Bodies Responsibilities for regulation of the UK civil nuclear industry are shared between several regulatory bodies, reflecting the distinction between the common duties owed by any generator of electricity and the additional duties arising from the unique attributes of nuclear energy generation. Nuclear-specific regulation was significantly consolidated in 2014 by the creation of the Office for Nuclear Regulation (ONR), replacing several bodies which had previously been responsible for regulating various different aspects of the nuclear industry. In addition, there are other government bodies which, while lacking general regulatory or supervisory powers, exercise specific facilitating and decision making functions and thereby have a significant role in the UK civil nuclear industry. Brexit impact—Euratom and the UK Nuclear Sector As of 31 January 2020 (exit day), the UK ceased to be an EU Member State. However, at this point in time, the UK entered a transition/implementation period during which it continued to be treated by the EU as a Member State for many purposes. The UK’s exit from the EU also meant the UK’s exit from the Euratom Community. 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition/implementation period. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s
Risk allocation in oil and gas transactions Introduction During the due diligence exercise, any issue raising concerns will be flagged up in the due diligence reports of the relevant team (legal, technical, financial) and recommendations will be made as to how to best deal with it. For more details on due diligence issues in oil and gas transactions generally, see Practice Note: Due diligence and warranties in oil and gas M&A transactions. Typically, the principal ways to address specific concerns within the underlying sale and purchase agreement (SPA), and thereby allocate risk between the parties, include the following: • warranties • indemnities, and • interim period covenants The due diligence process is crucial to the underlying proposed acquisition since the relevant findings (legal, financial and/or technical) will directly impact upon the type of specific warranties and indemnities (as well as any particular purchase price adjustments and interim period covenants) which the buyer will seek to incorporate in the SPA. There is no ‘one size fit all’ approach—the specific warranties, indemnities and interim period covenants, as well as any individual price adjustments, will depend on the particular characteristics of the individual transaction. Therefore, this Practice Note sets out a general overview of the typical provisions and mechanisms which parties to an oil and gas transaction may wish to negotiate and include in their SPA in order to manage and allocate
Oil regulation—United Kingdom—Q&A guide This Practice Note contains a jurisdiction-specific Q&A guide to oil regulation in United Kingdom published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2021). Authors: Mayer Brown—Bob Palmer 1. Describe, in general terms, the key commercial aspects of the oil sector in your country. According to the Oil and Gas Authority (OGA), the UK's oil & gas industry regulator, as of the end of 2018, almost 45 billion barrels of oil equivalent had been recovered from the UK continental shelf (UKCS). The OGA estimates that a further 10 to 20 billion barrels of oil equivalent could still be recovered from the UKCS. Production from the UKCS peaked in 1999, reaching 137 million tonnes. This was followed by a general decline, with production falling by 5 per cent each year on average. 2018 bucked this trend, with oil and gas production increasing more than 4 per cent from 2017, averaging 1.7 million barrels of oil equivalent per day (Mmboe/d), before dropping to 1.61Mmboe/d in 2020. The OGA predicts production to decline further in 2021 and 2022, anticipating a fall to 1.50 Mmboe/d and 1.44 Mmboe/d respectively. This reflects lower levels of brownfield and greenfield investments, and also takes into account the impact of planned maintenance works due to be carried out. In 2020, UKCS oil production fell to 0.93Mmbbl/d, a decrease
UK CCUS—an overview This Practice Note examines Carbon Capture Usage and Storage (CCUS) from the UK perspective. While currently there are no CCUS plans on the Irish island, the approach considered in this note is expected to be the same in Northern Ireland). This Practice Note considers: • what is CCUS and the key types of technologies it encompasses • the development of CCUS clusters in the UK • government policy and legislative developments aimed at increasing the deployment of CCUS, including the development of business models for establishing an incentive mechanism for CCUS projects and the Carbon Capture and Storage Infrastructure Fund • key drivers, obstacles and risks for CCUS uptake • policy developments in relation to repurposing existing oil and gas assets for CCUS projects, and • existing national and international legislative framework surrounding CCUS projects For more information specifically on the: • planning framework applicable to CCUS projects, see Practice Note: Carbon capture usage and storage—planning and policy • permitting requirements for CCUS projects, see Practice Note: Carbon capture usage and storage—permitting requirements What is CCUS? CCUS is the collective name for a set of technologies which deal with the capture of carbon dioxide (CO2), generated as a by-product of another process (such as electricity generation from fossil fuel sources, industrial processes and others, and the transportation of such CO2 via pipeline, ship or road tanker to a
Life sciences divergence tracker This Practice Note serves as a reference guide to monitor relevant EU-UK divergence in the legislation and guidance of interest to the life sciences sector. Where applicable, it also includes key points of divergence within the UK (between Great Britain (GB) and Northern Ireland (NI)). In this Practice Note, the term ‘divergence’ refers to differences in the legislation, guidance or required standards which arise following IP completion day (11 pm on 31 December 2020 which marked the end of the Brexit transition or implementation period). A parallel but identical or substantially similar regime would not constitute ‘divergence’. Medicinal products Date Point of divergence Summary of divergence Find out more 1 January 2021 Orphan designation EU: sponsors who intend to develop medicines for rare diseases may obtain an orphan designation (where the criteria are met) at any stage of development before an application for marketing authorisation (MA) is made (Article 5 of Regulation (EU) 141/2000).UK: in GB, there is no pre-MA orphan designation. The orphan designation is reviewed at the time of an MA or variation application. A UK-wide orphan MA can only be considered in the absence of an active EU orphan designation (Human Medicines Regulations 2012, SI 2012/1916, reg 50G). Practice Note: Orphan medicinal products European Medicines Agency (EMA) website: Orphan designation—overviewMedicines
Effect and duration of bankruptcy restrictions orders (BROs) Effect of a bankruptcy restrictions order The effect of a bankruptcy restrictions order (BRO) is to impose wide ranging restrictions on a bankrupt. These include the restrictions that a bankrupt is subject to prior to their discharge from bankruptcy, although there are additional restrictions that apply outside of insolvency law, eg not to act as a local councillor. If a bankrupt is the subject of a BRO, these restrictions continue for the duration of the BRO, regardless whether the bankrupt has been discharged. It is a criminal offence not to comply with the terms of a BRO. If a person is subject to a BRO and acts contrary to any of the restrictions, they may be prosecuted and may be fined or imprisoned or both. Full details of the restrictions imposed by a BRO are set out below. Duration of a BRO A BRO made under the Insolvency Act 1986 (IA 1986) can last anywhere between two and fifteen years. The period which is ordered in any given case will be determined according to the gravity of the misconduct that led to the BRO being made. For further reading on the circumstances that can lead to a BRO being made and its duration,
Oil regulation—Thailand—Q&A guide This Practice Note contains a jurisdiction-specific Q&A guide to oil regulation in Thailand published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2021). Authors: Chandler MHM Limited—Nuanporn Wechsuwanarux; E. T. Hunt Talmage, III; David Beckstead; Tachatorn Vedchapun; Noraseth Ohpanayikool 1. Describe, in general terms, the key commercial aspects of the oil sector in your country. The Thai petroleum concession has proven to provide a very stable foundation for investment in the oil and gas industry and downstream projects since 1971. However, Thailand has limited geological prospects for oil and gas. Thailand is a net importer of both oil and gas and its petroleum reserves are declining with increasing demand. Given the present petroleum resource base and demand profile, Thailand will remain a net importer of hydrocarbons for the foreseeable future. Based on the Energy Statistics of Thailand BE 2563 (2020), provided by the Energy Policy and Planning Office (EPPO), Thailand imported a total of 856Kbd (thousand barrels per day) of crude oil or approximately 87 per cent of consumption. Regarding the production of crude oil, in 2019, Thailand produced 126Kbd of crude oil, while Thailand produced 102Kbd of condensate. Natural gas plays a large role in satisfying Thailand's energy requirements. Based on the Energy Statistics of Thailand, Thailand produced 3,623 million standard cubic feet per day; whereas, the
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Draft letter responding to request to inspect privileged documents Dear [insert organisation name] We write in response to your letter of [DATE]. [Our client is prepared to allow your client to inspect [identify documents]. For the avoidance of doubt, our client does not thereby waive privilege over any other document. We will provide inspection [in accordance with the [Court’s directions OR CPR] OR by [sending you copies] within [number of] days].] [Our client continues to assert legal professional privilege over [identify documents]. Your client is accordingly not entitled to inspect them.] [We consider that we have provided the information required by CPR Rule 31.10(4).] [However, without prejudice to that position, our client is prepared to provide your client with the following additional information in a spirit of cooperation. Even in response to an actual application from your client, our client need only provide your client with an assurance that the documents have been looked at and that they satisfy the criteria for the assertion of privilege; see: Energy Solutions Limited v Nuclear
Decommissioning Relief Deed Decommissioning Relief Deed The Decommissioning Relief Deed (DRD) is a contract between the UK Government and a ‘Qualifying Company’ which operates in the oil and gas exploration and production market in the UK or on the United Kingdom Continental Shelf (UKCS). The DRD aims to provide certainty on the tax relief a
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Would decommissioning a site be subject to the polluter pays principle? Would this be subject to state aid? Would accepting historic risks be subject to the polluter pays principle? The ‘polluter pays’ principle is a fundamental principle of EU environmental law. It is enshrined in Article 191 of the Treaty on the Functioning of the EU. Accordingly, it is a governing principle of environmental law in the UK. In addition to its application as a general legal principle, the ‘polluter pays’ principle is also reflected in the specific legal regime for contaminated land contained in Part IIA of the Environmental Protection Act 1990 (EPA 1990). As a starting point, both EU law and the domestic law relating to contaminated land impose certain legal obligations on those responsible for pollution or risks from pollution at a site. A classic example would be pollution and the risks of pollution from mines. Here, in addition to planning conditions and planning obligations likely to have been imposed on the operator of
What is the maximum statutory penalty for summary prosecutions under the Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005? The Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005, SI 2005/2055 The Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005, data-ln-csis="283307" data-ln-lnis="4SW7-C730-TX08-H0N0-00000-00">SI 2005/2055, prohibit the discharge of oil to sea from offshore oil and gas installations other than in accordance with the terms and conditions of a permit, and require offshore operators to apply for permits for all planned discharges of oil in the course of all relevant offshore energy activities, including well operations, production operations, pipeline operations, and decommissioning operations. For more information on oil and gas regulation generally, see: Oil and gas licensing and regulation—overview. Offences under the Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005, SI 2005/2055 The Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005, SI 2005/2055, reg 16 lists the offences under the regulations and any defences. The result of a person being found guilty of an offence under the regulations is: • a fine not exceeding the statutory maximum on summary conviction • a fine on conviction on indictment (The Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005, SI 2005/2055, reg 16(5)). Maximum fine for committing a summary offence under the Offshore Petroleum Activities (Oil Pollution Prevention and
Where a company sells an interest in a petroleum revenue tax (PRT) paying oil field and retains some decommissioning liability, is it able to claim decommissioning relief for PRT? How does the relief interact with relief for decommissioning expenditure in respect of ring fence taxes? This Q&A is based on the assumption that the company has sold the oil field assets and no longer retains a licence interest. UK resident companies, and companies with a UK permanent establishment, are potentially subject to three levels of tax on their profits from oil and gas: • ring fence corporation tax (RFCT) • the supplementary charge (SC), and • petroleum revenue tax (PRT) (albeit at a 0% rate from 1 January 2016) Profits chargeable to RFCT are broadly computed on the same basis as the normal corporation tax rules (with some exceptions). The SC is calculated on the same basis as corporation tax, but without deduction for finance costs. PRT is a cash flow tax charged on the basis of individual oil and gas fields and is deductible as an expense in computing profits chargeable to RFCT and SC. For information on the RFCT and SC, see Practice Note: Oil and gas—corporation tax and the supplementary charge and for information on PRT, see Practice Note: Petroleum revenue tax. Tax losses arising on decommissioning can be carried back and offset against
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This week's edition of Environment weekly highlights includes analysis on the Pensions and Lifetime Savings Association’s report on net zero carbon emissions by 2050 provisions in retirement saving schemes investment plans and EU’s plans to include sustainability preferences in insurance-based investment assessments. In addition, this week, the Department for Environment, Food & Rural Affairs announced a new Genetic Technology Bill, published a policy paper outlining a broad range of statistics and data that will be obtained to monitor the improvement of the natural environment, published the Pollinator Action Plan for 2021–24 and opened a £6.4m fund for threatened species, the Office for Environmental Protection responded to the consultations on the Joint Fisheries Statement, biodiversity net gain proposals and nature recovery green paper and , the Environment Agency confirmed that 33 companies were fined over £27m for breaching climate change schemes. We have also published a new Practice Note which summarises the provisions in the Environment Act 2021 which relate to environmental governance.
This week's edition of Planning weekly highlights includes: court decisions dismissing challenges to the expansion project at Southampton airport and a mixed use development in Bournemouth, analysis of the Building Safety Act 2022, changes to the Building Regulations and Approved Documents in Wales, and analysis of the proposals in the Levelling Up and Regeneration Bill for high street rental auctions.
Restructuring & Insolvency analysis: This was an application under section 168(5) of the Insolvency Act 1986 (IA 1986) to modify or reverse the decision of the official receiver (OR) such that the supply of electricity to customers continue until a new National Grid connection was installed. The OR’s position was that he was constrained by the powers of IA 1986, in particular by IA 1986, Sch 4, para 5 which provided that a liquidator only had the ‘power to carry on the business of the company so far as may be necessary for its beneficial winding up’ (the Power). As a supply was no longer required by the company in liquidation, the OR could not continue the supply to its customers. The applicants (made up of the Welsh Government (WG), Welsh Water (WW), Neath Port Talbot Council (NPTC) and Sofidel UK Ltd (Sofidel)) argued this was too narrow a view of the Power and their environmental and economic concerns should be taken into account. Additionally, the Human Rights Act 1998 (HRA 1998) was relevant and the decision to terminate supply violated or threatened to violate certain Convention rights. The applications were dismissed. However, the OR’s decision in respect of WW and NPTC was modified to allow a continued supply to 18 April 2022. Written by Roseanna Darcy, barrister at South Square.
This week's edition of Environment weekly highlights includes the key announcements from the Spring Statement 2022 relevant to environment, a Market Tracker trend report which looks at the impact of environmental, social and governance issues on stakeholder and shareholder engagement during the 2022 AGM season and the case of Clipper Logistics plc v Scottish Equitable plc, in which the County Court considered the approach to be taken to 'green lease' terms in lease renewal proceedings under the Landlord and Tenant Act 1954. In addition, this week the second part of the Fourth Meeting of the Conference of the Parties to the Minamata Convention on Mercury (COP4) kicked off in Bali, the Department for Environment, Food & Rural Affairs launched a consultation on the UK’s approach to international climate and nature action and published guidance on the enforcement and sanction powers under the Ivory Act 2018, the Department for Business, Energy & Industrial Strategy called for views on the Strategic Environmental Assessment environmental report on UK offshore energy, and the European Commission proposed to establish a position on EU’s behalf for 19th Conference of the Parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES CoP19).
This week's edition of Energy weekly highlights includes: the Chancellor of the Exchequer’s Spring Statement 2022 on energy saving materials benefitting from 0% VAT, Ofgem’s published guidance on the cost assessment process for determining the transfer value for offshore electricity transmission projects, the NDA’s 2022–2025 Business Plan detailing activities across 17 nuclear sites following its draft consultation period and BEIS’ published list of the projects which are proceeding to the evaluation stage of phase two of the CCUS cluster sequencing process.
Restructuring & Insolvency analysis: This article explores the debate surrounding the proliferation of special administration regimes. Special administration regimes do not prioritise returns to creditors. Instead, they usually require the office-holder to pursue other objectives aimed at continuity of services or protecting public funds. But in a largely privatised economy, it is not always easy to determine which entities are deserving of a special administration regime. This article considers why special administrations are desirable for certain entities, when special administration regimes have been used in practice, and explores which other sectors may benefit from bespoke administration regimes. Written by Helen Coverdale, a restructuring & insolvency solicitor at Lexis®PSL.
This week's edition of Environment weekly highlights includes analysis on the negotiations regarding the draft ReFuel EU Aviation regulation, the Financial Conduct Authority’s final rules on climate-related disclosure requirements, how the construction sector will address sustainability in 2022, and plans for the Brexit Freedoms Bill. In addition, this week the Department for Environment, Food & Rural Affairs laid the Strategic Policy Statement for Ofwat before Parliament, the CO2 industry agreed on access to a sustainable supply of CO2, the government responded to the Environmental Audit Committee’s ‘UK’s footprint on global biodiversity’ report, the National Audit Office has launched an investigation into the government’s approach to waste crime, the Persistent Organic Pollutants Review Committee recommended the elimination of methoxychlor, and the Department for Business, Energy & Industrial Strategy published an economic regulation policy paper designed to modernise utilities sector.
This week's edition of Energy weekly highlights includes: News analysis from on OGA’s open letter regarding closer scrutiny of change of control transactions in the upstream oil and gas sector, Ofgem’s confirmation of the its next steps in its consultation on co-ordinating offshore energy networks and Ofgem’s new guidance outlining its administration of the Green Gas Levy (GGL) scheme.
This week's edition of Planning weekly highlights includes: cases on social housing relief under the CIL Regulations, the listing of a sports field as an ACV, paragraph 72 of the NPPF and the consideration of landscape harm; a PINS update on the procedure for hearings and inquiries; the consultation outcome on changes to permitted development rights; the consultation outcome, government response and statement to Parliament on the High Speed Rail (Crewe–Manchester) Bill; an update on the new digital planning software work; and new guidance on the Building Safety Fund.
Energy analysis: Three environmental campaigners under the banner 'Paid to Pollute' were given leave in July 2021 to bring a judicial review challenge to the OGA Strategy. After a full hearing in December 2021, on 18 January 2022, Mrs Justice Cockerill handed down her judgment, which dismissed the application on all grounds. Written in collaboration with Judith Aldersey-Williams, and and Valerie Allan, both partners, at CMS.
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