Energy Bill

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Energy Bill

Energy Bill
Part 2 — Electricity Market Reform
Chapter 7 — The renewables obligation: transitional arrangements
26


are to be issued only up to such number of certificates in any
specified period as may be specified or determined in
accordance with the order;
(h)
provide that the certificate purchase obligation is not to apply
on presentation of a certificate unless—
5
(i)
the certificate is presented by such a deadline as may be
specified or determined in accordance with the order,
and
(ii)
any other specified conditions are met (whether in
relation to the certificate, the person presenting it or
10
other matters);
(i)
provide for how the relevant purchasing body is to determine
whether specified conditions are met;
(j)
provide that the certificate purchase obligation in relation to a
certificate is to be discharged by such a deadline as may be
15
specified or determined in accordance with the order;
(k)
authorise the relevant purchasing body to determine the
manner in which payments under the certificate purchase
obligation are to be made;
(l)
authorise the relevant purchasing body to deduct from
20
payments specified descriptions of fees or charges incurred in
making the payments;
(m)
provide for a certificate purchase levy (see section 32P);
(n)
authorise the Secretary of State to make payments for the
purpose of enabling the certificate purchase obligation to be
25
discharged;
(o)
impose such other obligations, or confer such other functions,
on the relevant purchasing body as the Secretary of State
considers appropriate.
(3)
Once the redemption value in relation to a certificate is paid (less any
30
deductions permitted under the order by virtue of subsection (2)(l)), the
certificate purchase obligation in relation to that certificate is
discharged (and the certificate is not to be presented for payment
again).
(4)
For the purposes of carrying out its functions under a certificate
35
purchase order, the relevant purchasing body may—
(a)
require a person presenting a certificate to provide such
information or documentation as the body may reasonably
need for such purposes, and
(b)
determine the form in which, and the time by which, such
40
information or documentation is to be supplied.
(5)
The certificate purchase obligation does not apply in relation to a
certificate unless the person presenting the certificate has complied
with any requirements imposed under subsection (4).
32P
Certificate purchase levy
45
(1)
A certificate purchase order may provide for a certificate purchase levy
to be charged in connection with the provision of payments to the
relevant purchasing body.
(2)
A certificate purchase levy is a levy—

Energy Bill
Part 2 — Electricity Market Reform
Chapter 7 — The renewables obligation: transitional arrangements
27

(a)
charged in respect of supplies of electricity that have been, or
are expected to be, made in each specified period, and
(b)
payable in respect of each such period by persons who make, or
are expected to make, the supplies.
(3)
The order may (without limiting the generality of section 32Y(1)(d))
5
provide for different rates or different amounts of levy to be charged—
(a)
in different cases or circumstances;
(b)
in relation to different specified periods.
(4)
The order may secure that the levy is not to be charged in respect of
particular descriptions of supplies of electricity.
10
(5)
The order may provide for amounts of the levy received in respect of
any period to be applied for the purpose of discharging the certificate
purchase obligation in another period.
(6)
The order may, in particular, make provision about any of the
following matters—
15
(a)
what is a supply of electricity for the purposes of the levy;
(b)
when a supply of electricity is, or is expected to be, made for
those purposes;
(c)
who makes, or is expected to make, a supply of electricity for
those purposes;
20
(d)
the rates or amounts of the levy, or how such rates or amounts
are to be determined;
(e)
payment of the levy, including deadlines for payment in respect
of each period and interest in respect of late payment;
(f)
administration of the levy;
25
(g)
audit of information (whether by the administrator of the levy
or a third party) including requirements for audits to be paid by
the person whose information is subject to the audit;
(h)
provision of information, including its provision to third parties
in specified circumstances;
30
(i)
enforcement of the levy;
(j)
insolvency of persons liable to pay the levy;
(k)
reviews and appeals;
(l)
the functions of the administrator in connection with the levy.
(7)
The administrator of the levy, in the case of persons who make, or are
35
expected to make, supplies of electricity in Great Britain, is—
(a)
the Authority, or
(b)
such other eligible person as may be designated by the order as
the administrator in the case of such persons.
(8)
The administrator of the levy, in the case of persons who make, or are
40
expected to make, supplies of electricity in Northern Ireland, is—
(a)
the Northern Ireland authority, or
(b)
such other eligible person as may be designated by the order as
the administrator in the case of such persons.
(9)
A person is an “eligible person” for the purposes of designation under
45
subsection (7)(b) if the person is—

Energy Bill
Part 2 — Electricity Market Reform
Chapter 7 — The renewables obligation: transitional arrangements
28

(a)
a CFD counterparty at the time when the designation is made,
or
(b)
the Secretary of State.
(10)
A person is an “eligible person” for the purposes of designation under
subsection (8)(b) if the person is—
5
(a)
a CFD counterparty at the time when the designation is made,
or
(b)
the Northern Ireland department.
(11)
In a case where a person liable to pay the levy has made any
overpayment or underpayment (whether arising because an estimate
10
turns out to be wrong or otherwise), provision under subsection (6)(e)
may require the amount of the overpayment or underpayment
(including interest) to be set off against, or added to, any subsequent
liability of the person to pay the levy.
(12)
In a case where the amount received in respect of levy payments for a
15
period falls short of the amount due for that period, provision under
subsection (6)(e) or (j) may include a requirement on persons liable to
pay the levy to make further payments, by the time and in the
circumstances specified, of an amount calculated in the manner
specified or determined in accordance with the order.
20
(13)
Provision under subsection (6)(h) may provide for the administrator to
determine the form in which any information that a person is required
to give is to be given and the time by which it is to be given.
(14)
Provision under subsection (6)(i) may—
(a)
if the Authority is the administrator, apply sections 25 to 28 in
25
relation to a requirement in respect of the levy imposed under
the order on a person who is not a licence holder as if the person
were a licence holder;
(b)
in any other case, include provision for the imposition of
penalties if a requirement in respect of the levy is breached
30
(whether financial or not, but not including the creation of
criminal offences).
32Q
Use of levy payments
(1)
Amounts payable in respect of the certificate purchase levy are to be
paid to the administrator of the levy.
35
(2)
Amounts received by the administrator under subsection (1) must be
paid to—
(a)
the purchasing body of GB certificates, or
(b)
the purchasing body of NI certificates,

in accordance with such provision as may be contained in the order.
40
(3)
Amounts paid to a purchasing body under subsection (2) may be used
by that body only for the purpose of discharging the certificate
purchase obligation.
(4)
The order may contain further provision about—
(a)
the calculation of amounts received by the administrator that
45
are to be paid to a relevant purchasing body;

Energy Bill
Part 2 — Electricity Market Reform
Chapter 7 — The renewables obligation: transitional arrangements
29

(b)
the time by which the administrator must make payments of
such amounts to a relevant purchasing body;
(c)
the manner in which any such payments are to be made;
(d)
how amounts are to be dealt with for the purposes of subsection
(2) where the administrator and a relevant purchasing body to
5
whom they are to be paid are the same person.
(5)
Subsections (2) to (4) are subject to subsections (6) to (10).
(6)
The order may provide for amounts received by the administrator
under subsection (1) to be used by the administrator to make
payments—
10
(a)
into the Consolidated Fund in respect of costs (or a proportion
of costs) which have been or are expected to be incurred—
(i)
by the Authority,
(ii)
by the Secretary of State, or
(iii)
by a relevant designated person,
15

in connection with the performance of functions conferred by or
under sections 32N to 32Z1;
(b)
into the Consolidated Fund of Northern Ireland in respect of
costs (or a proportion of costs) which have been or are expected
to be incurred—
20
(i)
by the Northern Ireland authority, or
(ii)
by the Northern Ireland department,

in connection with the performance of functions conferred by or
under sections 32N to 32Z1.
(7)
For the purposes of subsection (6)(a), “relevant designated person”
25
means a person who is designated—
(a)
as the purchasing body of GB certificates by virtue of being an
eligible person within section 32N(6)(a) (CFD counterparty);
(b)
as the purchasing body of NI certificates by virtue of being an
eligible person within section 32N(7) (CFD counterparty);
30
(c)
as an administrator of the levy by virtue of being an eligible
person within section 32P(9)(a) or (10)(a) (CFD counterparty).
(8)
The order—
(a)
may exclude amounts of a specified description from being
used as mentioned in subsection (6);
35
(b)
may prevent the administrator using amounts to make
payments in respect of costs of a specified description.
(9)
The purchasing body of GB certificates must, if directed to do so by the
Secretary of State, pay into the Consolidated Fund any amounts
received under subsection (2) that it would (but for the direction) be
40
able to use under subsection (3) for the purpose of discharging the
purchase obligation in respect of GB certificates.
(10)
The purchasing body of NI certificates must, if directed to do so by the
Secretary of State, pay into the Consolidated Fund of Northern Ireland
any amounts received under subsection (2) that it would (but for the
45
direction) be able to use under subsection (3) for the purpose of
discharging the purchase obligation in respect of NI certificates.

Energy Bill
Part 2 — Electricity Market Reform
Chapter 7 — The renewables obligation: transitional arrangements
30

(11)
In this section “the order”, in relation to the certificate purchase levy,
means the certificate purchase order that imposes the levy.
32R
Designation of a CFD counterparty as purchasing body or
administrator
(1)
This section applies in relation to the designation of a person who is a
5
CFD counterparty—
(a)
as a relevant purchasing body under section 32N(4)(b) or (5)(b),
or
(b)
as the administrator of the levy under section 32P(7)(b) or (8)(b).
(2)
A designation may be made only with the consent of the person
10
designated.
(3)
A designation does not cease to have effect if the person’s designation
as a CFD counterparty ceases to have effect by virtue of section 7(6)(a)
or (b) of the Energy Act 2013.
(4)
A designation ceases to have effect if—
15
(a)
the Secretary of State by order revokes the designation, or
(b)
the person withdraws consent to the designation by giving not
less than 3 months’ notice in writing to the Secretary of State.
(5)
The Secretary of State may by order make transitional provision in
connection with a designation ceasing to have effect.
20
(6)
An order under subsection (5) may in particular make provision about
how obligations, imposed by virtue of a certificate purchase order on a
person whose designation ceases to have effect, are to be discharged in
any period before or after the time when the designation ceases to have
effect.
25
(7)
Subsection (5) is not to be taken as limiting the power to make
transitional provision in a certificate purchase order by virtue of section
32Y(1)(b).
32S
GB certificates
(1)
A certificate purchase order may (subject to subsection (3)) provide for
30
the Authority to issue from time to time, in accordance with such
criteria (if any) as are specified in the order, a certificate (“a GB
certificate”) to—
(a)
the operator of a generating station, or
(b)
if the order so provides, a person of any other description
35
specified in the order.
(2)
A GB certificate is to certify—
(a)
the matters within subsection (4) or (5), or
(b)
if the order provides that a certificate may certify the matters
within subsection (6), (7), (8) or (9), the matters within that
40
subsection.
(3)
A GB certificate certifying that an amount of electricity has been
generated from renewable sources in any period may not be issued if—
(a)
a renewables obligation order is in force, and

Energy Bill
Part 2 — Electricity Market Reform
Chapter 7 — The renewables obligation: transitional arrangements
31

(b)
a renewables obligation certificate has been, or could be, issued
under the order in respect of the generation in that period of the
same electricity.
(4)
The matters within this subsection are—
(a)
that the generating station, or, in the case of a certificate issued
5
otherwise than to the operator of a generating station, a
generating station specified in the certificate, has generated
from renewable sources the amount of electricity stated in the
certificate, and
(b)
that the electricity has been supplied by an electricity supplier
10
to customers in Great Britain.
(5)
The matters within this subsection are—
(a)
that the generating station, or, in the case of a certificate issued
otherwise than to the operator of a generating station, a
generating station specified in the certificate, has generated
15
from renewable sources the amount of electricity stated in the
certificate,
(b)
that the generating station in question is not in Northern
Ireland, and
(c)
that the electricity has been supplied by a Northern Ireland
20
supplier to customers in Northern Ireland.
(6)
The matters within this subsection are—
(a)
that two or more generating stations have, between them,
generated from renewable sources the amount of electricity
stated in the certificate, and
25
(b)
that the electricity has been supplied by an electricity supplier
to customers in Great Britain.
(7)
The matters within this subsection are—
(a)
that two or more generating stations have, between them,
generated from renewable sources the amount of electricity
30
stated in the certificate,
(b)
that none of them is a generating station in Northern Ireland,
and
(c)
that the electricity has been supplied by a Northern Ireland
supplier to customers in Northern Ireland.
35
(8)
The matters within this subsection are—
(a)
that the generating station, or, in the case of a certificate issued
otherwise than to the operator of a generating station, a
generating station specified in the certificate, has generated
from renewable sources the amount of electricity stated in the
40
certificate, and
(b)
that the electricity has been used in a permitted way.
(9)
The matters within this subsection are—
(a)
that two or more generating stations have, between them,
generated from renewable sources the amount of electricity
45
stated in the certificate, and
(b)
that the electricity has been used in a permitted way.

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Part 2 — Electricity Market Reform
Chapter 7 — The renewables obligation: transitional arrangements
32

(10)
For the purposes of subsections (8) and (9), electricity generated by a
generating station, or generating stations, of any description is used in
a permitted way if—
(a)
it is used in one of the ways mentioned in subsection (11), and
(b)
that way is specified in the order as a permitted way—
5
(i)
in relation to all generating stations, or
(ii)
in relation to generating stations of that description.
(11)
Those ways are—
(a)
being consumed by the operator of the generating station or
generating stations by which it was generated;
10
(b)
being supplied to customers in Great Britain through a private
wire network;
(c)
being provided to a distribution system or a transmission
system in circumstances in which its supply to customers
cannot be demonstrated;
15
(d)
being used, as respects part, as mentioned in one of paragraphs
(a), (b) or (c) and as respects the remainder—
(i)
as mentioned in one of the other paragraphs, or
(ii)
as respects part, as mentioned in one of the other
paragraphs and as respects the remainder as mentioned
20
in the other;
(e)
being used, as respects part, as mentioned in paragraph (a), (b),
(c) or (d) and as respects the remainder by being supplied by an
electricity supplier to customers in Great Britain or by a
Northern Ireland supplier to customers in Northern Ireland, or
25
both.
(12)
Subsection (11) of section 32B (meaning of supply of electricity through
a private wire network) applies for the purposes of subsection (11)(b)
as it applies for the purposes of subsection (10)(b) of that section.
32T
NI certificates
30
(1)
A certificate purchase order may (subject to subsection (3)) provide for
the Northern Ireland authority to issue from time to time, in accordance
with such criteria (if any) as are specified in the order, a certificate (“a
NI certificate”) to—
(a)
the operator of a generating station in Northern Ireland, or
35
(b)
if the order so provides, a person of any other description.
(2)
A NI certificate is to certify—
(a)
the matters within subsection (4), or
(b)
if the order provides that a certificate may certify the matters
within subsection (5), (6) or (7), the matters within that
40
subsection.
(3)
A NI certificate certifying that an amount of electricity has been
generated from renewable sources in any period may not be issued if—
(a)
an order under Article 52 of the Energy (Northern Ireland)
Order 2003 is in force, and
45
(b)
a Northern Ireland RO certificate has been, or could be, issued
under that order in respect of the same electricity.
(4)
The matters within this subsection are—