House of Commons - Explanatory Note
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Clause 77: Periodic reviews of authorisations

225.     Clause 77 inserts a new section 17A in RSA 93. Subsection (1) provides that periodic reviews of the limitations and conditions of authorisations granted under sections 13 or 14 of RSA 93, whether for nuclear sites or for other premises, must be carried out and that additional reviews may be carried out at the discretion of the authorising authority. Subsection (2) defines "the authorising authority" and defines "periodic reviews".

Clause 78 and Schedule 15: Consequential amendments of the 1993 Act

226.     Clause 78 brings Schedule 15, which makes a number of consequential amendments to RSA 93, into effect.

CHAPTER 5: MISCELLANEOUS PROVISIONS RELATING TO NUCLEAR INDUSTRY

Clause 79:     Amendment for giving effect to international obligations

227.     Clause 79 gives the Secretary of State the power to amend primary legislation in order to implement certain international obligations contained in the Paris and Brussels Conventions on third party nuclear liability.

228.     The Conventions establish an international legal framework within Western Europe for compensating victims of a radiation leak. The Paris Convention establishes minimum levels of liability for operators of nuclear installations and the principle that their liability is strict and is to be covered by compulsory financial security. The Brussels Convention provides supplementary compensation to be paid from public funds.

229.     The Conventions have been revised to provide higher and broader levels of compensation in the event of civil nuclear accidents. In particular, the liability of individual operators has been increased from £140m to €700m (£430m) per incident and the provision for supplementary compensation has been increased from £220m to €1.5bn (£930m). The definition of "nuclear damage" is also being widened to include not only loss of life or personal injury and loss of or damage to property, but also environmental damage, loss of income deriving from such damage and the cost of measures to prevent an accident occurring again.

230.     Clause 79 also makes provision for ratification of the "Joint Protocol" which allows parties to the two international Conventions (Paris and Vienna) governing liability for civil nuclear accidents to extend reciprocal benefits to each other. The ratification of the Joint Protocol will enable UK participation for the first time in a global compensation regime between the largely Western European parties to the Paris Convention and the parties to the Vienna Convention, which include Former Soviet Union and Eastern European countries and South American states.

Clause 80: Regulation of equipment, software and information

231.     This clause fills gaps in the regulation making powers of section 77 of the ATCS Act. To the extent not already covered by section 77, the amendments will permit the regulation of persons holding, transmitting or transporting the following items outside nuclear premises, namely (a) uranium enrichment equipment and software, and (b) sensitive nuclear information. The regulation making power will apply regardless of whether uranium enrichment itself is carried out inside or outside the UK.

232.     Additional regulations will be made in these areas as soon as the enabling power has been modified.

Clause 81: Application of the 1965 Act to Northern Ireland

     233. Clause 81 makes a number of consequential amendments to the 1965 Act as a result of the Northern Ireland Act 1998, which provides that nuclear energy and installations are excepted matters.

Clause 82: Expenditure on nuclear related matters

234.     Clause 82 gives the Secretary of State statutory authority to incur expenditure as a result of options included in the documents relating to the restructuring of British Energy. The provision is general, but goes further than the free-standing provisions in EMPA by authorising spending on two elements of the agreements not currently covered by legislation:

  • In circumstances where British Energy has sold one of its nuclear power stations to a third party, the acquisition of the power station from that third party and subsequently operating it. This would follow the exercise of an option on the part of HMG to acquire the station for this purpose; and

  • The acquisition of British Energy's shareholding in Nirex, and to incur expenditure on any consequences of such an acquisition.

     Clause 83: Additional functions of UKAEA

235. Clause 83 ensures that UKAEA will have sufficient statutory powers to operate in the new UK nuclear clean up market. It provides that UKAEA:

  • can set up site licensee companies, site management companies, joint ventures or subsidiaries in order to bid for NDA site management contracts, including for non-UKAEA sites.

  • has powers to run nuclear pensions schemes and, subject to approval by the Secretary of State, public service pension schemes other than the UKAEA pensions scheme.

  • has powers to manage and commercially exploit the property it owns, where it no longer requires that property for its other functions.

PART 3: RENEWABLE ENERGY SOURCES

SUMMARY AND BACKGROUND

Chapter 1: Renewable Energy Zones and Chapter 2: Decommissioning of Offshore Installations

236.     International law has long recognised that each coastal State has jurisdiction and sovereignty over its territorial waters. The UK Government and Scottish Ministers have given consent to 12 offshore wind farms at various locations around the UK coast, in internal tidal and territorial waters. Whilst some statutes such as the Food and Environment Protection Act 1985 (c.48) apply beyond territorial waters there is no comprehensive legal framework in place for offshore renewable energy developments beyond territorial waters. The Renewable Energy Zones part of Chapter 1 and Chapter 2 create such a framework based on the rights available to the UK as a contracting party to the 1982 United Nations Convention on the Law of the Sea (UNCLOS). The text of UNCLOS can be found at http://www.un.org/Depts/los/index.htm and was published as Command Paper 8941.

237.     Part V of UNCLOS enables coastal States to establish an exclusive economic zone within which they have sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation of the zone such as the production of energy from the water, currents and winds. UNCLOS also gives coastal States the exclusive right to construct and authorize and regulate the construction, operation and use of artificial islands, installations and structures for the purposes outlined above and other economic purposes.

238.     The Government published proposals to establish a Renewable Energy Zone under UNCLOS in its consultation paper "Future Offshore, A Strategic Framework for the Offshore Wind Industry (DTI/Pub/2k/11/02/NP. URN 02/1327, November 2002). Chapter 1 implements those proposals.

     239.     UNCLOS places an obligation on contracting parties to ensure that renewable energy installations in a Renewable Energy Zone are decommissioned. Chapter 2 sets out a regime for the decommissioning of such installations.

     240.     Chapters 1 and 2 also augment the existing framework of law which applies to offshore renewable energy developments in territorial and internal waters. The effect is to create a common legal regime for all offshore renewable energy developments whether they are located in internal waters, territorial waters or a Renewable Energy Zone.

Chapter 3: Renewables Obligations

241.     Under the Electricity Act 1989 (c.29) and the Renewables Obligation Order 2002 (S.I. 2002/914), electricity suppliers in England & Wales have a "renewables obligation" to produce to the Gas and Electricity Markets Authority ("GEMA") , before a specified day,certain evidence regarding the supply to customers in Great Britain of electricity generated by using renewable sources. The evidence required is Renewables Obligation Certificates ("ROCs") issued by GEMA. Scottish electricity suppliers have a similar renewables obligation under the Renewables Obligation (Scotland) Order 2002 (S.S.I. 2002/163).

     242. As an alternative to providing ROCs, electricity suppliers may discharge their renewables obligations (either fully or partially) by making buy-out payments to GEMA. This Chapter makes it clear that the Secretary of State may provide for more than one specified day in a year. This Chapter also provides for suppliers who do not comply with the renewables obligation by the specified day, to be treated as having subsequently discharged the renewables obligation if they make late buy-out payments, together with an escalating surcharge into a late payments fund. The Order taking these powers is expected to come into force on 1 April 2005.

243.     Whilst Northern Ireland has not yet made a renewables obligation Order, it has recently enacted legislation (Articles 52 to 55 of the Energy (Northern Ireland) Order 2003) (S.I. 2003/419)(N.I.6)) which is analogous to the provisions of the Electricity Act creating the renewables obligation. That legislation requires Northern Ireland suppliers to produce, as evidence, Northern Ireland Renewables Obligation Certificates ("NIROCs") issued by the Northern Ireland equivalent of GEMA, the Northern Ireland Authority for Energy Regulation ("Ofreg").

244.     This Chapter provides for the recognition in Great Britain of Renewables Obligation Certificates issued in Northern Ireland. Taking these powers now paves the way for the reciprocal arrangements to come into force from the outset of the renewables obligation for Northern Ireland. In due course, Northern Ireland is expected to make an analogous Order which will allow electricity suppliers in Northern Ireland to satisfy all or part of their renewables obligation by producing ROCs to Ofreg instead of NIROCs. The Northern Ireland Order is expected to come into force on 1 April 2005.

COMMENTARY ON CLAUSES

PART 3: RENEWABLE ENERGY ZONES

     CHAPTER 1; OFFSHORE PRODUCTION OF ENERGY

Clause 84: Gas and Electricity Markets Authority sustainability duty

     245.     Clause 84 inserts a new sub-section into section 3A of the Electricity Act 1989 (c.29) (the Electricity Act) which requires the Secretary of State and GEMA to carry out their respective functions under Part 1 of the Electricity Act in such a manner as to ensure the contribution to the achievement of sustainable development.

Clause 85: Exploitation of areas outside the territorial sea for energy production

246.     This clause vests in Her Majesty the rights of the UK in Part V of UNCLOS only as regards the production of energy from water or winds. Clause 106(2) makes it clear that the reference to energy from water includes the production of energy from both currents and tides. The rights vested encompass exploration activities and exploitation of these renewable energy resources and related purposes. The most important such purpose is the transmission and distribution of the electricity generated using water and wind power to markets onshore. Part V of UNCLOS includes rules about establishing the breadth of the exclusive economic zone. The clause contains a power to designate by an Order in Council the extent of a Renewable Energy Zone around the UK to be established in accordance with the rules laid down in UNCLOS. The Renewable Energy Zone is the area within which the UK is able to exercise its rights to produce energy from water or winds.

Clause 86: Application of criminal law to renewable energy installations

247.     This clause provides a power to establish, by Order in Council, criminal jurisdiction over any "renewable energy installation" in a Renewable Energy Zone and over the waters within a safety zone declared pursuant to clause 96. A "renewable energy installation" is defined in clause 107, subsections (3) to (5). This clause also provides for an Order in Council to extend the jurisdiction of the police to investigate alleged offences which might have been committed on, under or above a renewable energy installation or in waters within a safety zone.

248.     An Order in Council may extend not only to renewable energy installations in a Renewable Energy Zone but also to those in tidal waters and parts of the sea in or adjacent to Great Britain up to the limits of the territorial sea. The intention is that an Order in Council will ensure uniformity of criminal jurisdiction for all renewable energy installations in the waters covered.

Clause 88: Application of civil law to renewable energy installations

249.     This clause enables civil law to be applied by Order in Council to renewable energy installations and to cables which are, will be or were used for carrying electricity to or from such an installation. The Order in Council can specify which part of the law in force in the United Kingdom is to apply and can also make provision for which courts (defined to include tribunals and regulatory bodies) are to have jurisdiction.

Clause 89: Orders in Council under sections 86 and 88

250.     Clauses 86 and 88 apply to renewable energy installations wholly or partly in Scottish offshore waters including the Scottish part of the Renewable Energy Zone designated under clause 85(5). An Order in Council could potentially cover civil or criminal law matters which are wholly reserved under the Scotland Act 1998, wholly devolved or a mix of both. Clause 89 sets out the parliamentary procedure to be followed, depending on the subject matter of the Order in Council. In the case of wholly reserved matters the Order in Council would be subject to the negative resolution procedure in the Westminster Parliament. Where the Order in Council deals with wholly devolved matters then it would be subject to an annulment of a resolution of the Scottish Parliament. Where the Order in Council includes both reserved and devolved matters it would need to be subject to the procedures of both the Westminster and Scottish Parliaments.

Clause 90: Activities in Zones requiring 1989 Act licences

251.     Section 4 of the Electricity Act prohibits the generation, transmission, distribution and supply of electricity to any premises without a licence(clause 132 amends section 4 in respect of transmission activities requiring a licence while clause 142(2) also amends section 4 to include the participation in the operation of an electricity interconnector as a licensable activity). Section 5 of that Act gives a power to the Secretary of State to grant exemptions from this licensing requirement and section 6 provides for the issue of licences. This clause amends section 4 of the Electricity Act so that the prohibitions (and licensing and exemption regime) also apply in a Renewable Energy Zone and confirms that the regime applies in the territorial sea adjacent to Great Britain.

     Clause 91: Modification of licence conditions for offshore transmission and distribution

     252.     This clause empowers the Secretary of State to modify the standard conditions of transmission and distribution licences (and make incidental, consequential or transitional changes to particular transmission or distribution licence) and associated codes. This power will enable the Secretary of State to reflect in standard licence conditions the different environment offshore, for example the differences in engineering involved in putting cables in the sea rather than on land. The power is only exercisable within 18 months of the commencement of the section.

     Clause 92: Extension of transmission licences offshore

     253.     Clause 132 amends section 4 of the Electricity Act by replacing the prohibition on transmission of electricity with a prohibition on participation in the transmission of electricity. Clause 132(3) provides that coordinating and directing the flow of electricity onto and over a transmission system constitutes participation. This clause enables the Secretary of State to modify a transmission licence in force at the commencement of the section which authorises a person to co-ordinate and direct the flow of electricity so it applies offshore to the extent set out in clause 92(2)(a) and (b). Clause 92(4) also gives the Secretary of State power to modify standard conditions of any electricity licence or a particular electricity licence for incidental, consequential or transitional purposes. The power is only exercisable within 18 months of the commencement of the section.

     Clause 93: Competitive tenders for offshore transmission licences

254.     This clause inserts a new section 6C into the Electricity Act to enable GEMA to make regulations setting out the process to be followed by it in awarding offshore transmission licences by competitive tender. There are no offshore transmission licences at the moment.

Clause 94: Consents for generating stations in Zones

255.     The effect of subsection (1) is to extend the requirement for consent to the construction, extension or operation of a generating station as set out at section 36 of the Electricity Act 1989 (c.29) to a generating station in a Renewable Energy Zone and to confirm that the regime applies in territorial waters adjacent to Great Britain.

256.     Schedule 8 to the Electricity Act 1989 (c.29) sets out detailed provisions about the operation of the section 36 licensing regime. Subsection (2) introduces new provisions to cater for situations where the generating station for which a consent is required is not within the area of a relevant planning authority. Schedule 8 to the Electricity Act provides at the moment that where a relevant planning authority maintains an objection to an application for a section 36 consent the Secretary of State must arrange for a public inquiry to be held. This Schedule was drawn up before marine generating stations were a reality and its effect in regard to such generating stations is not wholly clear. The new provisions make it clear that the requirement for a public inquiry following an objection by a local planning authority does not apply where none of the places to which the application for section 36 consent relates is within the area of a relevant planning authority. The subsection goes on to provide for situations where the section 36 application relates to places which are partially within the jurisdiction of one or more relevant planning authorities.

Clause 95: Application of regulations under 1989 Act to Zones

257.     Section 29 of the Electricity Act 1989 (c.29) provides for regulations to be made relating to the supply and safety of electricity. Section 30 of that Act provides for electrical inspectors to be appointed and describes their role. This clause extends these provisions to a Renewable Energy Zone and confirms their application to the territorial sea adjacent to Great Britain.

Clauses 96 to 99: Safety zones around renewable energy installations

258.     These clauses give a discretionary power to the Secretary of State to issue a notice declaring one or more safety zones around a renewable energy installation. The Secretary of State has the flexibility to declare a safety zone as appropriate for the main stages of the life of renewable energy installation - the construction, extension and decommissioning phases, which are relatively short, as well as the longer operational phase. A notice can be issued where the renewable energy installation is at the proposal stage in regard to its construction, extension, operation or decommissioning or equally when these activities are in progress.

259.     They also give the Secretary of State the flexibility to state in the notice which activities are prohibited within a safety zone or how such matters are to be determined, and which vessels may enter or remain in the safety zone or carry on prohibited activities. Determinations under a safety zone notice may be made by the Secretary of State or delegated to some other person.

260.     Clause 97 prohibits vessels from entering or remaining in a safety zone except where permitted to do so by a notice declaring a safety zone. The Secretary of State also has the power to make regulations setting out general permissions allowing vessels to enter any safety zone. This is in addition to any individual permissions granted in the notice declaring that safety zone.

261.     Clause 98 makes it an offence for a vessel to enter or remain in a safety zone unless the vessel is complying with a permission given in an individual safety notice or regulations made by the Secretary of State. The clause sets out certain defences. Clause 99 extends criminal responsibility to certain persons other than the master or owner of the vessel who were responsible for the commission of the offence.

     Clause 100: Installations in territorial waters and renewable energy zones

     262. Article 60(7) of UNCLOS states that artificial islands, installations and structures and the safety zones around them may not be established where interference may be caused to the use of recognised sea lanes essential to international navigation. This clause confirms the application of this obligation to installations in the renewable energy zone and extends it to such installations in territorial waters.

     Clause 101: Interference with safety of navigation

     263. This clause provides that the Secretary of State must take into account the cumulative effect of installations and the safety zones around them in assessing whether they present a danger to navigation.

Clause 102 and 103: Extinguishment etc of public rights of navigation

264.     These clauses introduce a new section, section 36A, into the Electricity Act 1989 (c.29) whereby the Secretary of State has the power to make a declaration extinguishing public rights of navigation. The power applies only where the generating station is to be located in territorial waters adjacent to Great Britain and other tidal waters up to the low water mark.

265.     The declaration relates only to public rights of navigation which apply to the site of the renewable energy installation. There is various provision in respect of the effect of the declaration on rights of navigation, when it takes effect and the information which the declaration has to give. It is important that the declaration becomes known to those with an interest and subsection (6) of new section 36A of the Electricity Act 1989 (c.29), as inserted by clause 101, places an obligation on the Secretary of State to ensure that this happens.

266.     Subsection (2) of clause 102 integrates the process for applying for a declaration with the process for a section 36 consent, as set out in Schedule 8 of the Electricity Act 1989 (c.29). Subsection (3) of clause 102 excludes the functions in new section 36A of the Electricity Act from the principal objectives and general duties of the Secretary of State set out in sections 3A-3C of that Act.

Clause 104: Application of civil aviation regulations to renewable energy installations

267.     By virtue of section 60(3) of the Civil Aviation Act 1982 (c.16) the Civil Aviation Authority, may regulate, by means of an Air Navigation Order, aircraft on or in the neighbourhood of offshore oil and gas installations and the lighting of such installations for safety purposes. Section 106 of the 1982 Act states that an Order made under section 60 extends to territorial waters. Clause 104 enables the Civil Aviation Authority to regulate (a) aircraft on or in the neighbourhood of a renewable energy installation in a Renewable Energy Zone and (b) the lighting of such an installation.

Clause 106: Other amendments consequential on Chapter 1 of Part 3

268.     The Submarine Telegraph Act 1886 (c.49) brought into effect the 1884 Submarine Telegraphs Convention for the protection of submarine telegraph cables. Section 8 of the Continental Shelf Act 1964 (c.29) extended the provisions of the Act to cover other submarine cables and pipelines. Additionally the 1964 Act extended the Submarine Telegraph Act to cover pipelines only in the territorial sea. Subsection (1) extends the Submarine Telegraph Act to all submarine cables under the territorial sea and to waters in an area designated under section 1(7) of the Continental Shelf Act.

269.     It may be the case that there is an overlap between sites which are most suitable for the exploration and exploitation of renewable energy sources on the one hand and petroleum resources on the other. Subsection (4) enables the Secretary of State to take the generation of electricity and related activities into account in exercising or performing the powers and duties conferred or imposed on him by or under the Petroleum Act 1998. Conversely the Secretary of State will take into account the exploration for or exploitation of petroleum resources in the exercise of the powers available to him in regard to the generation of electricity from renewable resources, although no legislative changes are necessary in this case.

CHAPTER 2: DECOMMISSIONING OF OFFSHORE INSTALLATIONS

Clause 108: Requirement to prepare decommissioning programmes

270.     This clause gives a discretionary power to the Secretary of State to impose an obligation on a person to submit a costed decommissioning programme initially before a renewable energy installation (or part of it) or a related electric line has been installed. The Secretary of State may impose this obligation on a person at any time after at least one of the relevant statutory consents has been granted (or has been applied for and is likely to be granted) so that arrangements for decommissioning are in place at an early stage. Equally the Secretary of State can also issue a notice requiring a decommissioning programme to be submitted at subsequent stages in the life cycle of these assets. This clause works in conjunction with clause 115 which makes it an offence for a person not to inform the Secretary of State when he becomes responsible for these assets.

271.     The decommissioning programme may be accompanied by details of the security arrangements, whether financial or otherwise, which the recipient of the notice proposes to put in place to ensure that funds are available to carry out the decommissioning programme. A non-exhaustive list of things that will constitute security for this purpose is given at clause 117(2).

 
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Prepared: 23 April 2004