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Energy Bill


Energy Bill
Part 2 — Electricity Market Reform
Chapter 2 — Contracts for Difference

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10      

Direction to offer to contract

(1)   

The Secretary of State or the national system operator may, in accordance with

provision made by regulations, direct a CFD counterparty to offer to contract

with a person specified in the direction, on terms specified in the direction.

(2)   

A person may be specified in a direction under subsection (1) only if that

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person is an eligible generator.

(3)   

Regulations must make provision defining who is an “eligible generator” for

the purposes of a direction under this section.

(4)   

Regulations may make further provision about a direction under this section

and in particular about—

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(a)   

the circumstances in which a direction may or must be given;

(b)   

the terms which may or must be specified in a direction.

(5)   

Provision falling within subsection (4) may include provision for—

(a)   

the determination of a matter on a competitive basis,

(b)   

calculations or determinations to be made under the regulations,

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including by such persons, in accordance with such procedure and by

reference to such matters and to the opinion of such persons, as may be

specified in the regulations.

(6)   

Regulations may make provision about appeals against a decision of the

Secretary of State or the national system operator not to issue a direction by

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virtue of this section.

(7)   

A direction may not be given under this section in relation to an electricity

generating station in Northern Ireland unless the Department of Enterprise,

Trade and Investment consent to the direction.

(8)   

But regulations may, with the consent of that Department, include provision

25

for circumstances in which consent under subsection (7) is not required.

(9)   

In subsection (7) “Northern Ireland” includes so much of the internal waters

and territorial sea of the United Kingdom as are adjacent to Northern Ireland.

11      

Payments to electricity suppliers

(1)   

Regulations may make provision about the amounts which must be paid by a

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CFD counterparty to electricity suppliers.

(2)   

In this section “electricity supplier”, subject to any provision made by

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

under—

(a)   

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

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(b)   

Article 10(1)(c) of the Electricity (Northern Ireland) Order 1992 (S.I.

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

12      

Application of sums held by a CFD counterparty

(1)   

Regulations may make provision for apportioning sums—

(a)   

received by a CFD counterparty from electricity suppliers under

40

provision made by virtue of section 9;

(b)   

received by a CFD counterparty under a CFD,

 
 

Energy Bill
Part 2 — Electricity Market Reform
Chapter 2 — Contracts for Difference

9

 

   

in circumstances where the CFD counterparty is unable fully to meet

obligations under a CFD.

(2)   

Provision made by virtue of subsection (1) may include provision about the

meaning of “unable fully to meet obligations under a CFD”.

(3)   

Regulations may make provision about the application of sums held by a CFD

5

counterparty.

(4)   

Provision made by virtue of subsection (3) may include provision that sums are

to be paid, or not to be paid, into the Consolidated Fund.

13      

Information and advice

(1)   

Regulations may make provision about the provision and publication of

10

information.

(2)   

Provision made by virtue of subsection (1) may include provision—

(a)   

for the Secretary of State to require the national system operator to

provide advice to the Secretary of State;

(b)   

for the Secretary of State to require a CFD counterparty, the Authority,

15

the Northern Ireland Authority for Utility Regulation or the Northern

Ireland system operator to provide advice to the Secretary of State or

any other person specified in the regulations;

(c)   

for the Secretary of State to require a CFD counterparty, the national

system operator, the Authority, the Northern Ireland Authority for

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Utility Regulation, the Northern Ireland system operator or a generator

who is party to a CFD to provide information to the Secretary of State

or any other person specified in the regulations;

(d)   

for the national system operator to require information to be provided

to it by a CFD counterparty, a generator who is party to a CFD or the

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Northern Ireland system operator;

(e)   

for a CFD counterparty to require information to be provided to it by

electricity suppliers or the Northern Ireland system operator;

(f)   

for the classification and protection of confidential or sensitive

information;

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(g)   

for the enforcement of any requirement imposed by virtue of

paragraphs (a) to (f).

(3)   

In subsection (2)—

(a)   

“Northern Ireland system operator” means the holder of a licence

under Article 10(1)(b) of the Electricity (Northern Ireland) Order 1992

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

(b)   

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

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

under—

(i)   

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

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(ii)   

Article 10(1)(c) of the Electricity (Northern Ireland) Order 1992

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

(4)   

The prohibition on disclosure of information by—

(a)   

section 105(1) of the Utilities Act 2000;

(b)   

Article 63(1) of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419

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(N.I.6));

   

does not apply to a disclosure required by virtue of this section.

 
 

Energy Bill
Part 2 — Electricity Market Reform
Chapter 2 — Contracts for Difference

10

 

14      

Functions of the Authority

Regulations may make provision conferring functions on the Authority for the

purpose of offering advice to, or making determinations on behalf of, a party

to a CFD.

15      

Regulations: further provision

5

(1)   

Regulations may make provision—

(a)   

to require a CFD counterparty to enter into arrangements or to offer to

contract for purposes connected to a CFD;

(b)   

specifying things that a CFD counterparty may or must do, or things

that a CFD counterparty may not do;

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(c)   

conferring on the Secretary of State further powers to direct a CFD

counterparty to do, or not to do, things specified in the regulations or

the direction.

(2)   

Provision made by virtue of subsection (1)(b) or (c) includes provision

requiring consultation with, or the consent of, the Secretary of State in relation

15

to—

(a)   

the enforcement of obligations under a CFD;

(b)   

a variation or termination of a CFD;

(c)   

the settlement or compromise of a claim under a CFD;

(d)   

the conduct of legal proceedings relating to a CFD;

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(e)   

the exercise of rights under a CFD.

16      

Enforcement

(1)   

Regulations may make provision for requirements under the regulations to be

enforceable—

(a)   

by the Authority as if they were relevant requirements on a regulated

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person for the purposes of section 25 of EA 1989;

(b)   

by the Northern Ireland Authority for Utility Regulations as if they

were relevant requirements on a regulated person for the purposes of

Article 41A of the Energy (Northern Ireland) Order 2003 (S.I 2003/419

(N.I. 6)).

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(2)   

Provision made by virtue of subsection (1)(a) may include provision about the

enforcement of requirements imposed on the national system operator.

(3)   

Provision made by virtue of subsection (1)(b) may be made in relation only to

the enforcement of requirements imposed on the holder of a licence under

Article 10(1)(c) of the Electricity (Northern Ireland) Order 1992 (S.I. 1992/231

35

(N.I.1)).

17      

Order for maximum cost and targets

(1)   

The Secretary of State may by order provide for—

(a)   

the power to give a direction under section 10 not to be exercisable if a

maximum cost incurred or to be incurred by a CFD counterparty has

40

been reached (such cost to be calculated in accordance with provision

made by or under the order);

(b)   

a power for the Secretary of State to direct the national system operator

not to give a direction by virtue of this Chapter if the Secretary of State

 
 

Energy Bill
Part 2 — Electricity Market Reform
Chapter 2 — Contracts for Difference

11

 

believes that by virtue of the direction being given a cost greater than

the maximum cost provided for by the order would be incurred;

(c)   

any other targets to be met or taken into account by the national system

operator in the giving of directions under this Chapter.

(2)   

If more than one designation has effect under section 7, the reference in

5

subsection (1)(a) is a reference to all CFD counterparties.

(3)   

Provision made by virtue of subsection (1)(a) may provide for anything which

is to be calculated under the order to be calculated by such persons, in

accordance with such procedure and by reference to such matters and to the

opinion of such persons, as may be specified in the order.

10

(4)   

Provision made by virtue of subsection (1)(c) may include targets relating to—

(a)   

the means by which electricity is to be generated;

(b)   

the generating capacity of electricity generating stations;

(c)   

the geographical location of electricity generating stations.

(5)   

An order under this section is to be made by statutory instrument and a

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statutory instrument containing an order may not be made unless a draft of the

instrument has been laid before and approved by a resolution of each House of

Parliament.

18      

Consultation

(1)   

Before making regulations under this Chapter or an order under section 17 the

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Secretary of State must consult—

(a)   

the Scottish Ministers,

(b)   

the Welsh Ministers,

(c)   

the Department of Enterprise, Trade and Investment,

(d)   

any person who is a holder of a licence to supply electricity under

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

(e)   

any person who is a holder of a licence under Article 10(1)(b) or (c) of

the Electricity (Northern Ireland) Order 1992 (S.I. 1992/231 (N.I.1))

(transmission or supply licence),

(f)   

the Authority,

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(g)   

the national system operator, and

(h)   

such other persons as the Secretary of State considers it appropriate to

consult.

(2)   

The requirement to consult may be satisfied by consultation before, as well as

consultation after, the passing of this Act.

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19      

Shadow directors, etc.

Neither the Secretary of State nor the national system operator is, by virtue of

the exercise of a power conferred by or by virtue of this Chapter, to be regarded

as—

(a)   

a person occupying in relation to a CFD counterparty the position of

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director;

(b)   

being a person in accordance with whose directions or instructions the

directors of a CFD counterparty are accustomed to act;

(c)   

exercising any function of management in a CFD counterparty;

(d)   

a principal of a CFD counterparty.

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