Energy Bill [HL]

House of Commons

Session 2003 - 04
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Energy Bill [HL]

Energy Bill [HL]
Part 3 — Renewable Energy Sources
Chapter 3 — Renewables obligations
97

121
Use of green certificates issued in Northern Ireland
(1)
After section 32B of the 1989 Act insert—
“32BA
Use of green certificates issued in Northern Ireland
(1)
An order under section 32 may provide that—
(a)
in such cases as may be specified in the order, and
5
(b)
subject to such conditions as may be so specified,

an electricity supplier may (to the extent provided for in accordance
with the order) discharge its renewables obligation (or its obligation in
relation to a particular period) by the production to the Authority of a
Northern Ireland certificate.
10
(2)
In this section ‘Northern Ireland certificate’ means a certificate issued
by the Northern Ireland authority in accordance with provision
included, by virtue of Article 54 of the Energy (Northern Ireland) Order
2003 (S.I. 2003/419 (N.I. 6)), in an order under Article 52 of that Order
(renewables obligations for Northern Ireland suppliers).”
15
(2)
The requirements of section 32(7) of the 1989 Act (consultation before making
an order) may be satisfied in the case of an order containing provision made by
virtue of this section by consultation that took place wholly or partly before the
commencement of this section.
(3)
In Article 56(1) of the Energy (Northern Ireland) Order 2003 (power to amend
20
Part 7 of that Order to take account of amendments of corresponding Great
Britain provisions), the reference to amendments made to sections 32 to 32C of
the 1989 Act includes a reference to subsection (1) of this section.
(4)
Subsection (3) extends to Northern Ireland only.
122
Distributions to Northern Ireland suppliers
25
(1)
In section 32C of the 1989 Act (payment of money to discharge renewables
obligation and distribution of fund to electricity suppliers), after subsection (4)
insert—
“(5)
The references in subsections (3) and (4) to electricity suppliers include
references to persons who are Northern Ireland suppliers.”
30
(2)
The requirements of section 32(7) of the 1989 Act (consultation before making
an order) may be satisfied in the case of an order containing provision made by
virtue of this section by consultation that took place wholly or partly before the
commencement of this section.
123
Supplementary provision relating to renewables obligation in Great Britain
35
(1)
In subsection (3) of section 32 of the 1989 Act (definition of renewables
obligation), for “and 32C” substitute “to 32C”.
(2)
In subsection (7) of that section, for paragraph (d) substitute—
“(d)
such generators of electricity from renewable sources as he
considers appropriate; and”.
40
(3)
After subsection (8) of that section insert—
“(8A)
In this section and in sections 32A to 32C—

Energy Bill [HL]
Part 3 — Renewable Energy Sources
Chapter 3 — Renewables obligations
98


‘generated’ means generated at any place whether situated in the
United Kingdom or elsewhere, and cognate expressions shall be
construed accordingly;

‘Northern Ireland authority’ means the Northern Ireland
Authority for Energy Regulation;
5

‘Northern Ireland supplier’ means an electricity supplier within
the meaning of Part 7 of the Energy (Northern Ireland) Order
2003.”
(4)
In section 32A of that Act (supplementary provision relating to orders under
section 32), in subsection (3) for the words from “the differences” onwards
10
substitute “no supplier would by virtue of the differences be unduly
disadvantaged in competing with other suppliers”.
(5)
After that subsection insert—
“(3A)
In subsection (3) ‘supplier’ means an electricity supplier or a Northern
Ireland supplier.”
15
(6)
In subsection (7) of that section, for “obligation imposed” substitute “matters
dealt with”.
(7)
The requirements of section 32(7) of that Act (consultation before making an
order) may be satisfied in the case of an order containing provision made by
virtue of this section by consultation that took place wholly or partly before the
20
commencement of this section.
124
Issue of green certificates in Northern Ireland
(1)
Article 54 of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6))
(which contains provision corresponding to provision contained in section 32B
of the 1989 Act) is amended as follows.
25
(2)
After paragraph (2) insert—
“(2A)
In paragraphs (1) and (2) ‘Northern Ireland’ does not include any part
of the territorial sea of the United Kingdom.
(2B)
The provision that may be contained by virtue of this Article in an order
under Article 52 includes—
30
(a)
provision for the person to whom a certificate is to be issued to
be determined either before or after the supply of the electricity
to which it relates; and
(b)
provision for a determination as to the person to whom a
certificate is to be issued to be made in accordance with such
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arrangements as may be specified in or determined under the
order.
(2C)
In the case only of a certificate relating to electricity that has been
acquired, or is required to be acquired, under a qualifying
arrangement, the arrangements within paragraph (2B)(b) that may be
40
specified in or determined under the order include arrangements—
(a)
requiring the determination of the person to whom the
certificate is to be issued to be made by reference to financial
bids made in respect of the certificate or in respect of both the
certificate and the electricity to which it relates; and
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Energy Bill [HL]
Part 3 — Renewable Energy Sources
Chapter 3 — Renewables obligations
99

(b)
requiring that person to make a payment, in accordance with
his bid, to such person as may be specified in or determined
under the order.
(2D)
In the case only of a certificate relating to electricity that has been
acquired, or is required to be acquired, under a qualifying
5
arrangement, provision falling within paragraph (2B)(b) may require
the relevant person—
(a)
to make and implement the arrangements that are specified in
or determined under the order; and
(b)
to comply with directions given to him by the Authority for that
10
purpose.
(2E)
A person who receives a payment in accordance with provision made
by virtue of paragraph (2C)(b) shall apply the money received in such
manner as the Department may direct.
(2F)
A direction under paragraph (2E) may require that the money received
15
or part of that money be paid to the Department.
(2G)
Part VI shall apply in relation to a requirement imposed by virtue of
paragraph (2D) or (2E) on a person who is not an electricity licence
holder as if he were an electricity licence holder.”
(3)
After paragraph (3) insert—
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“(4)
An order under Article 52 may confer on the Authority functions in
Northern Ireland in relation to the issue of Great Britain certificates.
(5)
In this Article—

‘Great Britain certificates’ means certificates that are or may be
issued by the Gas and Electricity Markets Authority in
25
accordance with provision included, by virtue of section 32B of
the Electricity Act 1989, in an order under section 32 of that Act;

‘qualifying arrangement’ means an arrangement made pursuant
to an order under Article 35 of the Electricity Order (or such an
arrangement as modified or replaced by virtue of an order
30
under Article 57 of this Order);

‘relevant person’ means, in relation to electricity that is acquired,
or is required to be acquired, under a qualifying arrangement,
the person who acquired it, or who is required to acquire it.”
(4)
The requirements of Article 52(6) of that Order (consultation before making an
35
order) may be satisfied in the case of an order containing provision made by
virtue of this section by consultation that took place wholly or partly before the
commencement of this section.
(5)
This section extends to Northern Ireland only.
125
GEMA’s power to act on behalf of Northern Ireland regulator
40
(1)
GEMA and the Northern Ireland Authority for Energy Regulation (“the
Northern Ireland Authority”) shall be entitled—
(a)
to enter into arrangements for GEMA to act on behalf of the Northern
Ireland Authority for, or in connection with, the carrying out of the
2003 renewables obligations functions; and
45
(b)
to give effect to those arrangements.

Energy Bill [HL]
Part 3 — Renewable Energy Sources
Chapter 3 — Renewables obligations
100

(2)
In this section “the 2003 renewables obligations functions” means the functions
conferred on the Northern Ireland Authority under or for the purposes of
Articles 52 to 55 of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419
(N.I. 6)) (renewable obligations for Northern Ireland suppliers).
126
Consultation in relation to Northern Ireland renewables orders
5
(1)
This section applies where the Department of Enterprise, Trade and
Investment in Northern Ireland amends the provisions of Part 7 of the 2003
Order (renewables obligations for Northern Ireland suppliers) by way of an
amending order to take account of amendments of the 1989 Act made by this
Chapter.
10
(2)
In the case of a renewables order containing provision made by virtue of the
amending order, the requirements of Article 52(6) of the 2003 Order
(consultation before making a renewables order) may be satisfied by
consultation that took place wholly or partly before the amending order came
into force (including consultation taking place before the commencement of
15
this section).
(3)
In this section—

“amending order” means an order under Article 56 of the 2003 Order;

“the 2003 Order” means the Energy (Northern Ireland) Order 2003
(S.I. 2003/419 (N.I. 6));
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“renewables order” means an order under Article 52 of the 2003 Order.
(4)
This section extends to Northern Ireland only.
127
Modification of conditions of Northern Ireland electricity licences
(1)
In Part 7 of the Energy (Northern Ireland) Order 2003 (renewable energy
sources), after Article 58 insert—
25
“58A
Modifications of licences in connection with Energy Act 2004
(1)
Where the Department or the Authority considers it necessary or
expedient to do so in connection with—
(a)
amendments of this Order made by section 124 of the Energy
Act 2004, or
30
(b)
provision made by an order under Article 56 to take account of
amendments of the Electricity Act 1989 made by Chapter 3 of
Part 3 of that Act of 2004,

it may modify the conditions of an electricity licence.
(2)
The power to make modifications under this Article includes power to
35
make incidental, consequential or transitional modifications.
(3)
Before making a modification of a licence condition under this Article
the Department shall consult the Authority and the licence holder.
(4)
Before making a modification of a licence condition under this Article
the Authority shall—
40
(a)
consult the licence holder; and
(b)
obtain the consent of the Department to the modification.
(5)
Paragraphs (3) and (4)(a) may be satisfied by consultation—

Energy Bill [HL]
Part 3 — Renewable Energy Sources
Chapter 3 — Renewables obligations
101

(a)
that, in the case of a modification within paragraph (1)(b), took
place wholly or partly before the order in question comes into
force; and
(b)
that, in any case, took place wholly or partly before the
commencement of this Article.
5
(6)
Where the Department or the Authority makes any modifications
under this Article it shall publish those modifications in such manner
as it considers appropriate.
(7)
The power conferred by virtue of paragraph (1)(a) may not be exercised
after the end of the period of two years beginning with the
10
commencement of this Article.
(8)
The power conferred by virtue of paragraph (1)(b) may not be exercised
in relation to an order under Article 56 after the end of the period of two
years beginning with the day on which the order comes into force.”
(2)
This section extends to Northern Ireland only.
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128
Renewable transport fuel obligation
(1)
In order to comply with EU Directive 2003/30/EC, which requires Member
States of the European Union to demonstrate how biofuels are to be placed on
their markets in increasing quantities, the Secretary of State may, by
regulations, introduce a renewable transport fuel obligation.
20
(2)
Regulations made under subsection (1) may—
(a)
require relevant parts of the road transport fuel industry to
demonstrate that a specified proportion of their product is renewable;
(b)
set targets for the proportion of road transport fuel to be renewable;
and
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(c)
provide for penalties for failure to meet targets.
(3)
For the purposes of the obligation, renewable transport fuels shall be defined
as liquid or gaseous fuel for transport produced from biomass or other
renewable fuels.
(4)
The power conferred by this section on the Secretary of State to make
30
regulations is exercisable by statutory instrument subject to affirmative
resolution of both Houses of Parliament.
(5)
In this section—

“biomass” means the biodegradable fraction of products, waste and
residues from agriculture (including vegetable and animal substances),
35
forestry and related industries, as well as the biodegradable fraction of
industrial and municipal waste;

“other renewable fuels” means fuels, other than biofuels, which originate
from renewable energy sources and are used for transport purposes.

Energy Bill [HL]
Part 3 — Renewable Energy Sources
Chapter 4 — Microgeneration
102

Chapter 4
Microgeneration
129
Strategy for microgeneration
(1)
For the purposes of promoting and developing the use of new and renewable
energy sources, the Secretary of State shall within twelve months of the passing
5
of this Act publish a strategy for microgeneration (“the strategy”).
(2)
In drawing up the strategy or any revision of the strategy, the Secretary of State
shall consider the role of microgeneration in—
(a)
reducing the emission of carbon dioxide,
(b)
alleviating fuel poverty,
10
(c)
reducing the need for reinforcement of electricity networks, and
(d)
ensuring security of supply of electricity.
(3)
In preparing the strategy or any revision of the strategy, the Secretary of State
shall consult such persons as in his opinion are producers of energy by means
of microgeneration.
15
(4)
The strategy shall include such targets for the generation of energy by
microgeneration as in the opinion of the Secretary of State are practicable and
cost effective.
(5)
It shall be the duty of the Secretary of State to take reasonable steps to—
(a)
implement the strategy, and
20
(b)
ensure that any targets included in the strategy are met.
(6)
The Secretary of State may from time to time revise the strategy, and any
revised strategy may set new targets for the generation of energy by
microgeneration, and it shall be the duty of the Secretary of State to take
reasonable steps to—
25
(a)
implement the revised strategy, and
(b)
ensure that any targets included in the revised strategy are met.
(7)
In this section the following terms shall have the following meanings—

“new and renewable energy sources” means sources of production of
energy from or by means of—
30
(a)
wind power,
(b)
solar power,
(c)
ground source heat,
(d)
micro combined heat and power systems,
(e)
micro hydro power, and
35
(f)
other low or zero carbon sources;

“microgeneration” means generation of energy by means of equipment
installed in, or for use by, a single unit or a small number of units of
residential accommodation or office accommodation.

Energy Bill [HL]
Part 4 — Energy Regulation
Chapter 1 — Electricity trading and transmission
103

Part 4
Energy Regulation
Chapter 1
Electricity trading and transmission
130
“New trading and transmission arrangements”
5
(1)
References in this Chapter to the new trading and transmission arrangements
are to new arrangements relating to the trading and transmission of electricity
in Great Britain designed—
(a)
to promote the creation of a single competitive wholesale electricity
trading market, and
10
(b)
to introduce a single set of arrangements for access to and use of any
transmission system in Great Britain.
(2)
Expressions used in subsection (1) have the same meaning as in Part 1 of the
1989 Act (electricity supply), as amended by section 132.
131
Power to modify licence conditions
15
(1)
If the Secretary of State considers it necessary or expedient to do so for the
purpose of implementing the new trading and transmission arrangements
(whether wholly or partly), he may modify—
(a)
the conditions of a particular licence under section 6 of the 1989 Act
(licences authorising supply etc.), or
20
(b)
the standard conditions of licences of any of the types of licence
mentioned in subsection (1) of that section (generation, transmission,
distribution or supply licences).
(2)
The power under subsection (1) includes—
(a)
power to make modifications relating to the operation of distribution
25
systems, and
(b)
power to make incidental, consequential or transitional modifications.
(3)
Before making modifications under this section, the Secretary of State shall
consult the holder of any licence being modified and such other persons as he
considers appropriate.
30
(4)
Subsection (3) may be satisfied by consultation before, as well as by
consultation after, the commencement of this section.
(5)
The Secretary of State shall publish any modifications under subsection (1) in
such manner as he considers appropriate.
(6)
Any modification under subsection (1)(a) of part of a standard condition of a
35
licence shall not prevent any other part of the condition from continuing to be
regarded as a standard condition for the purposes of Part 1 of the 1989 Act.
(7)
Where the Secretary of State modifies the standard conditions of licences of any
type under subsection (1)(b), GEMA shall—
(a)
make (as nearly as may be) the same modifications of those standard
40
conditions for the purposes of their incorporation in licences of that
type granted after that time, and