Energy Bill (HL Bill 57)

(c) make different provision for different cases or circumstances or for
different purposes.

(5) Consequential provision made under subsection (4)(a) may amend, repeal or
revoke any provision made by or under an Act, whenever passed or made
5(including this Act).

(6) A transfer of functions order is to be made by statutory instrument.

(7) A statutory instrument containing a transfer of functions order is subject to
annulment in pursuance of a resolution of either House of Parliament.

(8) Schedule 3 (which confers power on the Secretary of State to make transfer
10schemes in connection with the making of transfer of functions orders) has
effect.

(9) If the Secretary of State makes a transfer of functions order under which any
EMR functions of the national system operator are transferred to an alternative
delivery body, the Secretary of State must consider the extent to which (if at all)
15a licence modification power should be exercised as a consequence of the
national system operator ceasing to carry out the functions that are transferred.

(10) In subsection (9) “licence modification power” means a power conferred by
section 26, 37 or 45 to modify—

(a) a condition of a transmission licence granted to the national system
20operator under section 6(1)(b) of EA 1989,

(b) the standard conditions incorporated in such licences under section 8A
of that Act, or

(c) a document maintained in accordance with the conditions of such
licences, or an agreement that gives effect to a document so maintained.

(11) 25In this section—

• “alternative delivery body”, “EMR functions” and “national system
  operator” have the same meaning as in section 46;

• “transfer of functions order” means an order under section 46(1) or (7).

48 Energy administration orders

(1) 30The Energy Act 2004 is amended as follows.

(2) In section 154 (energy administration orders), in subsection (3) for “section 155”
substitute “—

(a) section 155(1), and

(b) section 155(9) (if and to the extent that section 155(9) applies in relation
35to the company).”

(3) In section 155 (objective of an energy administration), after subsection (7)
insert—

“(8) Subsection (9) applies if the company in relation to which an energy
administration order is made has functions conferred by or by virtue
40of—

(a) Chapter 2, 3 or 4 of Part 2 of the Energy Act 2013, or

(b) an order made under section 46 of that Act (power of Secretary
of State to transfer certain functions).

(9) The objective of an energy administration (in addition to the objective
mentioned in subsection (1)) is to secure—

(a) that those functions are and continue to be carried out in an
efficient and effective manner; and

(b) 5that it becomes unnecessary, by one or both of the means
mentioned in subsection (2), for the energy administration
order to remain in force for that purpose.

(10) The duty under section 154(3), so far as it relates to the objective
mentioned in subsection (9)—

(a) 10applies only to the extent that securing that objective is not
inconsistent with securing the objective mentioned in
subsection (1);

(b) ceases to apply in respect of any function of a company if an
order is made under section 46 of the Energy Act 2013 as a result
15of which the function is transferred from that company to
another person.”

CHAPTER 6 Access to markets etc

Market participation and liquidity

49 Power to modify licence conditions etc: market participation and liquidity

(1) 20The Secretary of State may modify—

(a) a condition of a particular licence under section 6(1)(a) or (d) of EA 1989
(generation and supply licences);

(b) the standard conditions incorporated in licences under those
provisions by virtue of section 8A of that Act;

(c) 25a document maintained in accordance with the conditions of licences
under section 6(1)(a) or (d) of that Act, or an agreement that gives effect
to a document so maintained.

(2) The Secretary of State may exercise the power in subsection (1) only for the
following purposes—

(a) 30facilitating participation in the wholesale electricity market in Great
Britain, whether by licence holders or others;

(b) promoting liquidity in that market.

(3) Modifications made by virtue of that power may include—

(a) provision imposing obligations in relation to the sale or purchase of
35electricity, including, in particular, obligations as to—

(i) the terms on which electricity is sold or purchased, and

(ii) the circumstances or manner in which electricity is sold or
purchased;

(b) provision imposing restrictions on the sale or purchase of electricity to
40or from group undertakings;

(c) provision imposing obligations in relation to the disclosure or
publication of information.

(4) For the purposes of subsection (3)(b), electricity is sold to or purchased from a
group undertaking if the transaction is between undertakings one of which is
a group undertaking in relation to the other.

For this purpose, “undertaking” and “group undertaking” have the same
5meanings as in the Companies Acts (see section 1161 of the Companies Act
2006).

For this purpose, “undertaking” and “group undertaking” have the same
meanings as in the Companies Acts (see section 1161 of the Companies Act
2006).

10Power purchase agreement scheme

50 Power to modify licence conditions etc to facilitate investment in electricity
generation

(1) The Secretary of State may modify—

(a) a condition of a particular licence under section 6(1)(d) of EA 1989
15(supply licences);

(b) the standard conditions incorporated in licences under that provision
by virtue of section 8A of that Act;

(c) a document maintained in accordance with the conditions of licences
under section 6(1)(d) of that Act, or an agreement that gives effect to a
20document so maintained.

(2) The Secretary of State may exercise the power in subsection (1) only for the
purpose of facilitating investment in electricity generation by means of a power
purchase agreement scheme.

(3) For the purposes of this section and section 51—

(a) 25a power purchase agreement scheme is a scheme established by supply
licence conditions and regulations under section 51 for promoting the
availability to electricity generators of power purchase agreements,
and

(b) “power purchase agreement” means an arrangement under which a
30licensed supplier agrees to purchase electricity generated by an
electricity generator at a discount to a prevailing market price.

For this purpose, “supply licence condition” means any condition, document
or agreement of a kind mentioned in subsection (1).

(4) Provision that may be made under subsection (1) in relation to a power
35purchase agreement scheme includes provision—

(a) as to the eligibility of an electricity generator to enter into a power
purchase agreement under the scheme;

(b) as to the terms of any power purchase agreement to be entered into
under the scheme, including provision—

(i) 40for determining the price at which electricity is to be purchased
under the agreement (including provision for determining a
market price and the amount of a discount at any time);

(ii) as to the duration of any such agreement;

(c) as to the circumstances in which a licensed supplier is or may be
45required or permitted to enter, or offer to enter, into a power purchase
agreement under the scheme;

(d) for the provision of information in connection with the scheme.

(5) Provision within subsection (4)(c) includes provision for determining which
licensed supplier or suppliers is or are to be required or permitted to enter, or

offer to enter, into a power purchase agreement with an electricity generator in
any particular case.

(6) Such provision may in particular include provision for the licensed supplier or
suppliers in question to be determined—

(a) 5by a process involving a determination or determinations by one or
more of the following—

(i) the Secretary of State;

(ii) the Authority;

(iii) the electricity generator;

(b) 10by auction or other competitive process;

and provision that may be made by virtue of paragraph (b) includes provision
as to the circumstances in which a licensed supplier is or may be required or
permitted to participate in an auction or other process.

(7) For the purposes of this section and section 51, “licensed supplier” means the
15holder of a licence under section 6(1)(d) of EA 1989.

51 Power purchase agreement scheme: regulations

(1) The Secretary of State may by regulations make provision, in connection with
any modifications made under section 50, for or in connection with a power
purchase agreement scheme.

(2) 20Any such regulations may in particular—

(a) make provision for apportioning amongst licensed suppliers, or any of
them, all or any part of the value of any or all of the costs or benefits of
any licensed supplier in connection with the scheme;

(b) confer functions on the Secretary of State or the Authority (which may
25include provision for directions to be given to the Authority by the
Secretary of State);

(c) make provision for the delegation of functions conferred on the
Secretary of State or the Authority by the regulations or by virtue of
section 50;

(d) 30include provision for obligations imposed by the regulations on
licensed suppliers to be enforceable by the Authority as if they were
relevant requirements on a regulated person for the purposes of section
25 of EA 1989;

(e) make provision about the provision of information in connection with
35the scheme.

(3) Provision that may be included in regulations under this section by virtue of
subsection (2)(a) includes, in particular, provision—

(a) for requiring licensed suppliers to pay a levy to the Authority at
specified times;

(b) 40specifying how such a levy is to be calculated;

(c) conferring an entitlement on a licensed supplier to receive a payment
from the Authority.

(4) Provision which may be included in regulations by virtue of subsection (3)
includes provision for the Secretary of State or the Authority to determine what
45is to be taken into account as a cost or benefit of any licensed supplier in
connection with the scheme and its value.

(5) Regulations under this section may—

(a) include incidental, supplementary and consequential provision;

(b) make transitory or transitional provision or savings;

(c) make different provision for different cases or circumstances or for
different purposes;

(d) 5make provision subject to exceptions.

(6) Before making any regulations under this section, the Secretary of State must
consult—

(a) licensed suppliers,

(b) the Authority, and

(c) 10such other persons as the Secretary of State considers it appropriate to
consult.

(7) Subsection (6) may be satisfied by consultation before, as well as by
consultation after, the passing of this Act.

(8) Regulations under this section must be made by statutory instrument.

(9) 15An instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

52 Power purchase agreement scheme: disclosure of information

In section 105 of the Utilities Act 2000 (general restrictions on disclosure of
information)—

(a) 20in subsection (1)(a), after “2010” insert “or section 50 or 51 of the Energy
Act 2013”;

(b) in subsection (3)(a), after “2010” insert “, section 50 or 51 of the Energy
Act 2013”.

53 Principal objective and general duties: power purchase agreement scheme

25Sections 3A to 3D of EA 1989 (principal objective and general duties) apply in
relation to functions of the Secretary of State or the Authority conferred by or
by virtue of section 50 or 51, or section 54 so far as it relates to a power purchase
agreement scheme, as they apply in relation to functions under Part 1 of that
Act.

30Supplementary

54 Licence modifications under sections 49 and 50: further provisions

(1) A modification of a licence under section 49(1) or 50(1) may in particular
include a modification—

(a) to provide for a new document to be required to be prepared and
35maintained in accordance with the conditions of such a licence;

(b) to provide for an agreement to give effect to a document so maintained.

(2) Before making modifications under section 49(1) or 50(1), the Secretary of State
must consult—

(a) the holder of any licence being modified,

(b) 40the Authority, and

(c) such other persons as the Secretary of State considers it appropriate to
consult.

(3) Subsection (2) may be satisfied by consultation before, as well as by
consultation after, the passing of this Act.

CHAPTER 7 The renewables obligation: transitional arrangements

55 Closure of support under the renewables obligation

(1) 5After section 32L of EA 1989 insert—

“32LA Renewables obligation closure order

(1) The Secretary of State may make a renewables obligation closure order.

(2) A renewables obligation closure order is an order which provides that
no renewables obligation certificates are to be issued under a
10renewables obligation order in respect of electricity generated after a
specified date.

(3) Provision made under subsection (2) may specify different dates in
relation to different cases or circumstances.

(4) The cases or circumstances mentioned in subsection (2) may in
15particular be described by reference to—

(a) accreditation of a generating station, or

(b) the addition of generating capacity to a generating station.

(5) A renewables obligation closure order may include provision about—

(a) the meaning of “accreditation” and “generating capacity” in
20subsection (4);

(b) when generating capacity is to be treated as added to a
generating station for the purposes of that subsection.

(6) References in this section to a renewables obligation order are
references to any renewables obligation order made under section 32
25(whenever made, and whether or not made by the Secretary of State).

(7) Power to make provision in a renewables obligation order (and any
provision contained in such an order) is subject to provision contained
in a renewables obligation closure order; but this section is not
otherwise to be taken as affecting power to make provision in a
30renewables obligation order of the kind mentioned in subsection (2).

(8) Section 32K applies in relation to a renewables obligation closure order
as it applies in relation to a renewables obligation order (and subsection
(3) above is not to be taken as limiting the application of that section).

32LB Renewables obligation closure orders: procedure

(1) 35Before making a renewables obligation closure order, the Secretary of
State must consult—

(a) the Authority,

(b) the Council,

(c) such generators of electricity from renewable sources as the
40Secretary of State considers appropriate, and

(d) such other persons, if any, as the Secretary of State considers
appropriate.

(2) The requirement to consult may be satisfied by consultation before, as
well as consultation after, the passing of the Energy Act 2013.

(3) 5A renewables obligation closure order is not to be made unless a draft
of the instrument containing it has been laid before and approved by a
resolution of each House of Parliament.”

(2) In section 32M(1) of EA 1989 (interpretation of sections 32 to 32M)—

(a) for “32L” substitute “32LB”;

(b) 10after the definition of “renewables obligation order” insert—

• ““renewables obligation closure order” is to be construed
  in accordance with section 32LA;”;

(c) in the definition of “specified”, after “renewables obligation order”
insert “or a renewables obligation closure order”.

(3) 15In section 106 of EA 1989 (regulations and orders), in subsection (2)(b) after
“32,” insert “32LA,”.

(4) In Article 56(1) of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419S.I. 2003/419 (N.I.
6)) (power to amend Part 7 of that Order to take account of amendments of
corresponding Great Britain provisions), the reference to amendments made to
20sections 32 to 32C of EA 1989 includes a reference to subsections (1) and (2) of
this section.

56 Transition to certificate purchase scheme

(1) EA 1989 is amended as follows.

(2) After section 32M insert—

“32N 25The certificate purchase obligation

(1) The Secretary of State may make a certificate purchase order.

(2) A certificate purchase order is an order which imposes the certificate
purchase obligation on—

(a) the purchasing body of GB certificates;

(b) 30the purchasing body of NI certificates.

(3) The certificate purchase obligation is that—

(a) the purchasing body of GB certificates must pay the redemption
value of a GB certificate to the person presenting it;

(b) the purchasing body of NI certificates must pay the redemption
35value of a NI certificate to the person presenting it.

(4) The purchasing body of GB certificates is—

(a) the Authority, or

(b) such other eligible person as may be designated by the order as
the purchasing body of GB certificates.

(5) 40The purchasing body of NI certificates is—

(a) the Northern Ireland authority, or

(b) such other eligible person as may be designated by the order as
the purchasing body of NI certificates.

(6) A person is an “eligible person” for the purposes of designation under
subsection (4)(b) if the person is—

(a) a CFD counterparty at the time when the designation is made,
or

(b) 5the Secretary of State.

(7) A person is an “eligible person” for the purposes of designation under
subsection (5)(b) if the person is a CFD counterparty at the time when
the designation is made.

(8) Subsection (3) is subject to sections 32O to 32Z2.

32O 10Further provision about the certificate purchase obligation

(1) A certificate purchase order may make provision generally in relation
to the certificate purchase obligation.

(2) A certificate purchase order may, in particular—

(a) specify the redemption value of certificates or provide for how
15the redemption value is to be calculated;

(b) provide for different redemption values for successive periods
of time;

(c) authorise the adjustment of redemption values from time to
time for inflation by a method specified in the order (including
20by reference to a specified scale or index, as it has effect from
time to time, or to other specified data of any description);

(d) require the relevant purchasing body or the Secretary of State (if
not the relevant purchasing body) to publish the redemption
value of certificates by a specified deadline;

(e) 25provide for the manner in which a certificate is to be presented
to the relevant purchasing body;

(f) provide for the certificate purchase obligation in relation to
certificates issued in respect of electricity generated—

(i) using specified descriptions of renewable sources,

(ii) 30by specified descriptions of generating stations,

(iii) in specified ways, or

(iv) in other specified cases or circumstances,

to apply only up to a specified number of the certificates that are
presented for payment in any specified period;

(g) 35provide that certificates in respect of electricity generated—

(i) using specified descriptions of renewable sources,

(ii) by specified descriptions of generating stations,

(iii) in specified ways, or

(iv) in other specified cases or circumstances,

40are 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—

(i) 45the 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
other matters);

(i) provide for how the relevant purchasing body is to determine
5whether 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
specified or determined in accordance with the order;

(k) authorise the relevant purchasing body to determine the
10manner in which payments under the certificate purchase
obligation are to be made;

(l) authorise the relevant purchasing body to deduct from
payments specified descriptions of fees or charges incurred in
making the payments;

(m) 15provide 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
discharged;

(o) impose such other obligations, or confer such other functions,
20on 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
deductions permitted under the order by virtue of subsection (2)(l)), the
certificate purchase obligation in relation to that certificate is
25discharged (and the certificate is not to be presented for payment
again).

(4) For the purposes of carrying out its functions under a certificate
purchase order, the relevant purchasing body may—

(a) require a person presenting a certificate to provide such
30information or documentation as the body may reasonably
need for such purposes, and

(b) determine the form in which, and the time by which, such
information or documentation is to be supplied.

(5) The certificate purchase obligation does not apply in relation to a
35certificate unless the person presenting the certificate has complied
with any requirements imposed under subsection (4).

32P Certificate purchase levy

(1) A certificate purchase order may provide for a certificate purchase levy
to be charged in connection with the provision of payments to the
40relevant purchasing body.

(2) A certificate purchase levy is a levy—

(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
45are expected to make, the supplies.

(3) The order may (without limiting the generality of section 32Z(1)(d))
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.

(5) The order may provide for amounts of the levy received in respect of
5any 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—

(a) what is a supply of electricity for the purposes of the levy;

(b) 10when 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;

(d) the rates or amounts of the levy, or how such rates or amounts
15are 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;

(g) audit of information (whether by the administrator of the levy
20or 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;

(i) enforcement of the levy;

(j) 25insolvency 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
expected to make, supplies of electricity in Great Britain, is—

(a) 30the 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
expected to make, supplies of electricity in Northern Ireland, is—

(a) 35the 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
subsection (7)(b) if the person is—

(a) 40a 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—

(a) 45a CFD counterparty at the time when the designation is made,
or

(b) the Northern Ireland department.