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Energy Bill


Energy Bill
Part 7 — Final

103

 

134     

Extent

(1)   

Subject to the rest of this section, this Act extends to England and Wales and

Scotland.

(2)   

The following also extend to Northern Ireland—

(a)   

in Part 2—

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(i)   

Chapter 1 (general considerations),

(ii)   

Chapter 2 (contracts for difference),

(iii)   

Chapter 4 (investment contracts),

(iv)   

Chapter 7 (the renewables obligation: transitional

arrangements),

10

(v)   

Chapter 8 (emissions performance standard), and

(vi)   

section 47 (exemption from liability in damages);

(b)   

subject to subsections (4) and (5), Part 3 (nuclear regulation);

(c)   

this Part.

(3)   

Section 129 extends to England and Wales and Northern Ireland only.

15

(4)   

Part 2 of Schedule 8 extends to England and Wales and Scotland only.

(5)   

The amendments made by Schedule 12 have the same extent as the provisions

they amend, except that—

(a)   

paragraphs 16(3), 18(6), 19(6), 20(2)(b) and (3) and 21 (amendments of

certain provisions of the Nuclear Installations Act 1965) extend to

20

England and Wales and Scotland only;

(b)   

the other amendments in that Schedule of the Nuclear Installations Act

1965 extend to England and Wales, Scotland and Northern Ireland

only;

(c)   

paragraphs 29 to 39 (amendments of the Nuclear Safeguards and

25

Electricity (Finance) Act 1978 and Nuclear Safeguards Act 2000) extend

to England and Wales, Scotland and Northern Ireland only;

(d)   

paragraphs 40 to 42 (amendments of the Radioactive Substances Act

1993) extend to Scotland only.

135     

Commencement

30

(1)   

The provisions of this Act come into force on such day as the Secretary of State

may by order made by statutory instrument appoint, subject to subsections (2)

and (3).

(2)   

The following provisions come into force at the end of the period of 2 months

beginning with the day on which this Act is passed—

35

(a)   

Chapter 5 of Part 2 (conflicts of interest and contingency

arrangements);

(b)   

Chapter 6 of Part 2 (access to markets);

(c)   

Chapter 7 of Part 2 (renewables obligation: transitional arrangements);

(d)   

Chapter 8 of Part 2 (emissions performance standard);

40

(e)   

Part 5 (strategy and policy statement), other than section 120(1)

(repeals);

(f)   

sections 121 to 124 (domestic tariffs: modifications of energy supply

licences);

(g)   

section 125 (powers to alter activities requiring licences: activities

45

related to supply contracts);

 
 

Energy Bill
Part 7 — Final

104

 

(h)   

section 126 (consumer redress orders);

(i)   

section 127 (offshore transmission systems);

(j)   

section 129 (fees in respect of decommissioning and clean-up of nuclear

sites).

(3)   

The following provisions come into force on the day on which this Act is

5

passed—

(a)   

Chapter 1 of Part 2 (general considerations);

(b)   

Chapter 2 of Part 2 (contracts for difference);

(c)   

Chapter 3 of Part 2 (capacity market);

(d)   

Chapter 4 of Part 2 (investment contracts);

10

(e)   

Chapter 9 of Part 2 (miscellaneous);

(f)   

section 95 (subordinate legislation under Part 3);

(g)   

section 96(1) (power to make transitional provision in relation to Part

3);

(h)   

section 97 (transfer of staff etc for purposes of Part 3);

15

(i)   

section 98(2) (power to make consequential amendments in relation to

Part 3);

(j)   

section 100 (review of Part 3);

(k)   

section 130 (review of certain provisions of Part 6);

(l)   

the provisions of this Part (including this section).

20

(4)   

An order under subsection (1) may—

(a)   

appoint different days for different purposes;

(b)   

make transitional provision and savings.

136     

Short title

This Act may be cited as the Energy Act 2013.

25

 
 

Energy Bill
Schedule 1 — CFD counterparties: transfer schemes

105

 

Schedules

Schedule 1

Section 7

 

CFD counterparties: transfer schemes

Power to make transfer schemes

1     (1)  

The Secretary of State may make one or more schemes for the transfer of

5

designated property, rights or liabilities of a person who has ceased to be a

CFD counterparty (“the transferor”) to a person who is a CFD counterparty

(“the transferee”).

      (2)  

On the transfer date, the designated property, rights and liabilities are

transferred and vest in accordance with the scheme.

10

      (3)  

The rights and liabilities that may be transferred by a scheme include those

arising under or in connection with a contract of employment.

      (4)  

A certificate by the Secretary of State that anything specified in the certificate

has vested in any person by virtue of a scheme is conclusive evidence for all

purposes of that fact.

15

      (5)  

In this Schedule—

“designated”, in relation to a scheme, means specified in or determined

in accordance with the scheme;

“property” includes interests of any description;

“the transfer date” means a date specified by a scheme as the date on

20

which the scheme is to have effect.

Contents of a scheme

2     (1)  

A scheme may make provision—

(a)   

for anything done by or in relation to the transferor in connection

with any property, rights or liabilities transferred by the scheme to

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be treated as done, or to be continued, by or in relation to the

transferee;

(b)   

for references to the transferor in any agreement (whether written or

not), instrument or other document relating to any property, rights

or liabilities transferred by the scheme to be treated as references to

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the transferee;

(c)   

about the continuation of legal proceedings;

(d)   

for transferring property, rights or liabilities which could not

otherwise be transferred or assigned;

(e)   

for transferring property, rights and liabilities irrespective of any

35

requirement for consent which would otherwise apply;

 

 

Energy Bill
Schedule 2 — Investment contracts
Part 1 — Introductory

106

 

(f)   

for preventing a right of pre-emption, right of reverter, right of

forfeiture, right to compensation or other similar right from arising

or becoming exercisable as a result of the transfer of property, rights

or liabilities;

(g)   

for dispensing with any formality in relation to the transfer of

5

property, rights or liabilities by the scheme;

(h)   

for transferring property acquired, or rights or liabilities arising,

after the scheme is made but before it takes effect;

(i)   

for apportioning property, rights or liabilities;

(j)   

for creating rights, or imposing liabilities, in connection with

10

property, rights or liabilities transferred by the scheme;

(k)   

for requiring the transferee to enter into any agreement of any kind,

or for a purpose, specified in or determined in accordance with the

scheme.

      (2)  

Sub-paragraph (1)(b) does not apply to references in primary legislation or

15

in subordinate legislation.

Compensation

3          

A scheme may contain provision for the payment of compensation by the

Secretary of State to any person whose interests are adversely affected by it.

20

Schedule 2

Section 33

 

Investment contracts

Part 1

Introductory

Meaning of “investment contract”

25

1     (1)  

In this Schedule an “investment contract” means a contract with an

electricity generator which—

(a)   

is entered into by the Secretary of State, whether before or after this

Schedule comes into force, on or before the earlier of 31st December

2015 and the date on which a definition of an “eligible generator”

30

first comes into force by virtue of section 10(3),

(b)   

if it relates to an electricity generating station in Northern Ireland, is

entered into with the consent of the Department of Enterprise, Trade

and Investment,

(c)   

includes an obligation for the parties to make payments under the

35

contract based on the difference between a strike price and a

reference price in relation to electricity generated,

(d)   

is laid before Parliament in accordance with sub-paragraph (4).

      (2)  

If the contract is entered into before the coming into force of this Schedule,

the obligation referred to in sub-paragraph (1)(c) must be conditional on the

40

being in force of this Schedule.

 
 

Energy Bill
Schedule 2 — Investment contracts
Part 1 — Introductory

107

 

      (3)  

In sub-paragraph (1)—

“electricity generator” means—

(a)   

a person who intends to establish an electricity generating

station or alter an existing station;

(b)   

a person who intends to operate or participate in the

5

operation of an electricity generating station that is to be

established or altered;

(c)   

a person who has an interest in a company falling within

paragraph (a) or (b).

“reference price” means the sum that is specified in, or determined

10

under, the contract as the reference price in respect of electricity

generated in the period specified in, or determined under, the

contract;

“Northern Ireland” includes so much of the internal waters and

territorial sea of the United Kingdom as are adjacent to Northern

15

Ireland;

“strike price” means the sum that is specified in, or determined under,

the contract as the strike price in respect of electricity generated in

the period specified in, or determined under, the contract.

      (4)  

A contract is laid before Parliament in accordance with this sub-paragraph

20

if it is laid by the Secretary of State at any time after the introduction into

Parliament of the Bill that becomes this Act—

(a)   

with a statement falling within sub-paragraph (5), and

(b)   

after the Secretary of State has excluded from the contract—

(i)   

any confidential information (see paragraph 3), or

25

(ii)   

if the investment contract does not contain any confidential

information, any information to which paragraph 3(3)

applies and which the Secretary of State considers it

appropriate to exclude.

      (5)  

A statement falls within this sub-paragraph if it is a statement—

30

(a)   

that the Secretary of State considers that payments falling within

paragraph 1(1)(c) which would be made under the contract would

encourage low carbon electricity generation,

(b)   

that the Secretary of State considers that without the contract there is

a significant risk that the electricity generation to which the contract

35

relates will not occur or will be significantly delayed, and

(c)   

summarising the regard that the Secretary of State has had, in

deciding to enter the contract, to the matters set out in subsection (2)

of section 5.

      (6)  

In sub-paragraph (5) “low carbon electricity generation” means electricity

40

generation which in the opinion of the Secretary of State will contribute to a

reduction in emissions of greenhouse gases; and “greenhouse gas” has the

meaning given by section 92(1) of the Climate Change Act 2008.

      (7)  

The Secretary of State must publish an investment contract in the form in

which it was laid before Parliament as soon as reasonably practicable after it

45

is laid.

 
 

Energy Bill
Schedule 2 — Investment contracts
Part 1 — Introductory

108

 

Varied investment contract

2     (1)  

An investment contract is a “varied investment contract” for the purposes of

this paragraph if the variation—

(a)   

is agreed at any time before or after this Schedule comes into force,

and

5

(b)   

will, in the opinion of the Secretary of State, materially increase the

likely cost to consumers of electricity.

      (2)  

A varied investment contract is an “investment contract” for the purposes of

this Schedule only if it is laid before Parliament (at any time after the

introduction into Parliament of the Bill that becomes this Act)—

10

(a)   

with a statement of why, having regard to the likely cost to

consumers of electricity, the Secretary of State believes that the

variation is appropriate, and

(b)   

after the Secretary of State has excluded from it—

(i)   

any confidential information (see paragraph 3), or

15

(ii)   

if the varied investment contract does not contain any

confidential information, any information to which

paragraph 3(3) applies and which the Secretary of State

considers it appropriate to exclude.

      (3)  

The Secretary of State must publish a varied investment contract in the form

20

in which it was laid before Parliament as soon as reasonably practicable after

it is laid.

      (4)  

This paragraph does not apply in respect of a variation which is made in

accordance with the terms of an investment contract.

Confidential information

25

3     (1)  

For the purposes of paragraphs 1 and 2, “confidential information” means

specified information to which sub-paragraph (3) applies and in relation to

which it is an initial term of the contract that it should not be disclosed.

      (2)  

For the purposes of sub-paragraph (1)—

(a)   

a term is an initial term if it is agreed at the time the investment

30

contract is entered into or, in relation to a varied investment contract,

at the time the variation is agreed;

(b)   

“specified” means specified in the initial term.

      (3)  

This sub-paragraph applies to information if it is—

(a)   

not the strike price or the reference price;

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(b)   

information which, in the opinion of the Secretary of State at the time

the initial term is agreed, constitutes a trade secret;

(c)   

information the disclosure of which, in the opinion of the Secretary

of State at that time, would or would be likely to prejudice the

commercial interests of any person;

40

(d)   

information the disclosure of which would, in the opinion of the

Secretary of State at that time, constitute a breach of confidence

actionable by any person.

Interpretation for the purposes of this Schedule

4     (1)  

In this Schedule—

45

 
 

Energy Bill
Schedule 2 — Investment contracts
Part 1 — Introductory

109

 

“CFD” is to be construed in accordance with section 6(2);

“CFD counterparty” is to be construed in accordance with section 7(2);

“electricity supplier”, subject to any provision made by regulations,

means a person who is a holder of a licence to supply electricity

under—

5

(a)   

section 6(1)(d) of EA 1989, or

(b)   

Article 10(1)(c) of the Electricity (Northern Ireland) Order

1992 (S.I. 1992/231 (N.I.1));

“investment contract counterparty” is to be construed in accordance

with paragraph 5;

10

“national system operator” means the person operating the national

transmission system for Great Britain (and for this purpose

“transmission system” has the same meaning as in EA 1989 - see

section 4(4) of that Act);

“regulations” means regulations made under paragraph 6.

15

      (2)  

References in this Schedule to a CFD counterparty (apart from the reference

in paragraph 9(1)(c), 9(1)(d) and 16) are to a CFD counterparty acting as a

counterparty in relation to an investment contract (where any property,

rights or liabilities under the contract have been transferred to the CFD

counterparty by a scheme under paragraph 16).

20

Investment contract counterparty

5     (1)  

The Secretary of State may by order made by statutory instrument designate

an eligible person to be a counterparty for investment contracts.

      (2)  

A person may be designated if the person is—

(a)   

a company formed and registered under the Companies Act 2006, or

25

(b)   

a public authority, including any person any of whose functions are

of a public nature.

      (3)  

A designation may be made only with the consent of the person designated.

      (4)  

More than one designation may have effect under this paragraph.

      (5)  

A designation ceases to have effect if—

30

(a)   

the Secretary of State by order made by statutory instrument revokes

the designation, or

(b)   

the person withdraws consent to the designation by giving not less

than 28 days’ notice in writing to the Secretary of State.

      (6)  

As soon as reasonably practicable after a designation ceases to have effect

35

the Secretary of State must make a transfer scheme under paragraph 16 to

ensure the transfer of all rights and obligations under any investment

contract to which the person who has ceased to be an investment contract

counterparty was a party.

      (7)  

If necessary for the purposes of a transfer scheme required to be made by

40

virtue of sub-paragraph (6), the Secretary of State must, so far as reasonably

practicable, exercise the power to designate so as to ensure that at least one

designation has effect under this paragraph.

      (8)  

Regulations may include provision about the period of time for which, and

the circumstances in which, a person who has ceased to be an investment

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