Energy Bill [HL]

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Energy Bill [HL]

Energy Bill [HL]
Part 2 — Sustainability and Renewable Energy Sources
Chapter 4 — Renewables obligations
99

arrangement, the arrangements within paragraph (2B)(b) that may be
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
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certificate and the electricity to which it relates; and
(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
10
acquired, or is required to be acquired, under a qualifying
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
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(b)
to comply with directions given to him by the Authority for that
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.
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(2F)
A direction under paragraph (2E) may require that the money received
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.”
25
(3)
After paragraph (3) insert—
“(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
30
issued by the Gas and Electricity Markets Authority in
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
35
arrangement as modified or replaced by virtue of an order
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.”
40
(4)
The requirements of Article 52(6) of that Order (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.
(5)
This section extends to Northern Ireland only.
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Energy Bill [HL]
Part 2 — Sustainability and Renewable Energy Sources
Chapter 4 — Renewables obligations
100

122
GEMA’s power to act on behalf of Northern Ireland regulator
(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
5
2003 renewables obligations functions; and
(b)
to give effect to those arrangements.
(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
10
(N.I. 6)) (renewable obligations for Northern Ireland suppliers).
123
Consultation in relation to Northern Ireland renewables orders
(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
15
amending order to take account of amendments of the 1989 Act made by this
Chapter.
(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
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consultation that took place wholly or partly before the amending order came
into force (including consultation taking place before the commencement of
this section).
(3)
In this section—

“amending order” means an order under Article 56 of the 2003 Order;
25

“the 2003 Order” means the Energy (Northern Ireland) Order 2003;

“renewables order” means an order under Article 52 of the 2003 Order.
(4)
This section extends to Northern Ireland only.
124
Modification of conditions of Northern Ireland electricity licences
(1)
In Part 7 of the Energy (Northern Ireland) Order 2003 (renewable energy
30
sources), after Article 58 insert—
“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 121 of the Energy
35
Act 2004, or
(b)
provision made by an order under Article 56 to take account of
amendments of the Electricity Act 1989 made by Chapter 4 of
Part 2 of that Act of 2004,

it may modify the conditions of an electricity licence.
40
(2)
The power to make modifications under this Article includes power to
make incidental, consequential or transitional modifications.

Energy Bill [HL]
Part 2 — Sustainability and Renewable Energy Sources
Chapter 4 — Renewables obligations
101

(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—
(a)
consult the licence holder; and
5
(b)
obtain the consent of the Department to the modification.
(5)
Paragraphs (3) and (4)(a) may be satisfied by consultation—
(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
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(b)
that, in any case, took place wholly or partly before the
commencement of this Article.
(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.
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(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
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
20
years beginning with the day on which the order comes into force.”
(2)
This section extends to Northern Ireland only.
125
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
25
their markets in increasing quantities, the Secretary of State may, by
regulations, introduce a renewable transport fuel obligation.
(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;
30
(b)
set targets for the proportion of road transport fuel to be renewable;
and
(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
35
renewable fuels.
(4)
The power conferred by this section on the Secretary of State to make
regulations is exercisable by statutory instrument subject to affirmative
resolution of both Houses of Parliament.
(5)
In this section—
40

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

Energy Bill [HL]
Part 3 — Energy Regulation
Chapter 1 — Electricity trading and transmission
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“other renewable fuels” means fuels, other than biofuels, which originate
from renewable energy sources and are used for transport purposes.
Part 3
Energy Regulation
Chapter 1
5
Electricity trading and transmission
126
“New trading and transmission arrangements”
(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—
10
(a)
to promote the creation of a single competitive wholesale electricity
trading market, and
(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
15
1989 Act (electricity supply), as amended by section 128.
127
Power to modify licence conditions
(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—
20
(a)
the conditions of a particular licence under section 6 of the 1989 Act
(licences authorising supply etc.), or
(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).
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(2)
The power under subsection (1) includes—
(a)
power to make modifications relating to the operation of distribution
systems, and
(b)
power to make incidental, consequential or transitional modifications.
(3)
Before making modifications under this section, the Secretary of State shall
30
consult the holder of any licence being modified and such other persons as he
considers appropriate.
(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
35
such manner as he considers appropriate.
(6)
Any modification under subsection (1)(a) of part of a standard condition of a
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
40
type under subsection (1)(b), GEMA shall—

Energy Bill [HL]
Part 3 — Energy Regulation
Chapter 1 — Electricity trading and transmission
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(a)
make (as nearly as may be) the same modifications of those standard
conditions for the purposes of their incorporation in licences of that
type granted after that time, and
(b)
publish the modifications in such manner as it considers appropriate.
(8)
The power under subsection (1) may not be exercised after the end of the
5
period of eighteen months beginning with the day on which that subsection
comes into force.
(9)
In subsection (2)(a), the reference to distribution systems is to be construed in
accordance with section 4(4) of the 1989 Act.
128
Alteration of transmission activities requiring licence
10
(1)
Section 4 of the 1989 Act (prohibition on unlicensed activities in connection
with supply of electricity) is amended as follows.
(2)
In subsection (1) (which lists the activities prohibited), for paragraph (b)
substitute—
“(b)
participates in the transmission of electricity for that purpose;”.
15
(3)
After subsection (3) insert—
“(3A)
In subsection (1)(b) above, the reference to a person who participates in
the transmission of electricity is to a person who—
(a)
co-ordinates, and directs, the flow of electricity onto and over a
transmission system by means of which the transmission of
20
electricity takes place, or
(b)
makes available for use for the purposes of such a transmission
system anything which forms part of it.
(3B)
For the purposes of subsection (3A)(b), a person shall not be regarded
as making something available just because he consents to its being
25
made available by another.”
(4)
In subsection (4) (definitions for the purposes of Part 1), for the definition of
“transmit” substitute—

“‘transmission’, in relation to electricity, means transmission by means of
a transmission system;
30

‘transmission system’ means a system which—
(a)
consists (wholly or mainly) of high voltage lines and electrical
plant, and
(b)
is used for conveying electricity from a generating station to a
substation, from one generating station to another or from
35
one substation to another.”
129
Transmission licences
(1)
In section 6 of the 1989 Act (licences authorising supply etc.), in subsection (1)
(kinds of licence which may be granted), for paragraph (b) substitute—
“(b)
a licence authorising a person to participate in the transmission
40
of electricity for that purpose (‘a transmission licence’);”.

Energy Bill [HL]
Part 3 — Energy Regulation
Chapter 1 — Electricity trading and transmission
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(2)
After subsection (6) of that section insert—
“(6A)
A transmission licence may authorise the holder to participate in the
transmission of electricity in any area, or only in an area specified in the
licence.
(6B)
The Authority may, with the consent of the holder of a transmission
5
licence, modify terms included in the licence in pursuance of subsection
(6A) above.”
(3)
In section 7 (licence conditions: general), after subsection (2) insert—
“(2A)
Without prejudice to the generality of paragraph (a) of subsection (1),
conditions included in a transmission licence by virtue of that
10
paragraph may—
(a)
require the licence holder not to carry on an activity which he
would otherwise be authorised by the licence to carry on, or
(b)
restrict where he may carry on an activity which he is
authorised by the licence to carry on.”
15
130
New standard conditions for transmission licences
(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, he
may determine new standard conditions in relation to transmission licences.
(2)
The Secretary of State shall publish any conditions determined under
20
subsection (1) in such manner as he considers appropriate.
(3)
Conditions published in accordance with subsection (2) shall be standard
conditions for the purposes of transmission licences, subject to any
modifications of the standard conditions for the purposes of licences of that
type made—
25
(a)
under Part 1 of the 1989 Act, or
(b)
under this Act,

after the determination under subsection (1).
(4)
The standard conditions for the purposes of transmission licences may contain
provision—
30
(a)
for any standard condition included in a transmission licence not to
have effect until brought into operation in such manner, and in such
circumstances, as may be specified in, or determined under, the
standard conditions;
(b)
for the effect of any standard condition included in such a licence to be
35
suspended in such manner, and in such circumstances, as may be so
specified or determined;
(c)
for any standard condition included in such a licence which is
suspended to be brought back into operation in such manner, and in
such circumstances, as may be so specified or determined.
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(5)
In section 8A of the 1989 Act (standard conditions of licences), in subsection (1)
(incorporation in future licences of conditions which are standard conditions
by virtue of section 33(1) of the Utilities Act 2000 (c. 27)), for the words from
“section 6(1)” to “supply licences)” substitute “section 6(1)(a), (c) or (d) (that is
to say, generation licences, distribution licences or supply licences)”.
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Energy Bill [HL]
Part 3 — Energy Regulation
Chapter 1 — Electricity trading and transmission
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(6)
In that section, after subsection (1) insert—
“(1A)
Subject to subsection (2), each condition which by virtue of section
130(3) of the Energy Act 2004 is a standard condition for the purposes
of transmission licences shall be incorporated by reference in each
transmission licence granted on or after the day on which section 130(6)
5
of that Act comes into force.”
(7)
The power under subsection (1) may not be exercised—
(a)
after the end of the period of eighteen months beginning with the day
on which that subsection comes into force, or
(b)
on or after the day on which subsections (5) and (6) come into force.
10
131
Conversion of existing transmission licences
Schedule 17 (which makes provision for a licensing scheme in relation to
existing transmission licences) has effect.
132
Grant of transmission licences
(1)
If the Secretary of State considers it necessary or expedient to do so for the
15
purpose of implementing the new trading and transmission arrangements, he
may by direction—
(a)
require GEMA to grant a transmission licence to such person, and on
such terms and subject to such conditions, as the direction may
provide;
20
(b)
require GEMA to refuse an application for a transmission licence.
(2)
The Secretary of State shall consult GEMA before issuing a direction under
subsection (1).
(3)
Subsection (2) may be satisfied by consultation before, as well as by
consultation after, the commencement of this section.
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(4)
The powers under subsection (1) may not be exercised after the end of the
period of eighteen months beginning with the day on which that subsection
comes into force.
(5)
The power under subsection (1)(a) may only be exercised on one occasion and
then only to require the grant of a single licence.
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(6)
The power under subsection (1)(b) may not be exercised once the power under
subsection (1)(a) has been exercised.
133
Duties to provide information etc. to Secretary of State
(1)
If GEMA receives an application for a transmission licence at a time when the
power under section 132(1)(b) is exercisable, it shall as soon as practicable send
35
a copy of the application to the Secretary of State.
(2)
GEMA shall provide the Secretary of State with all such information as he may
require for the purposes of or in connection with the carrying-out of any of his
functions under this Chapter.
(3)
Each holder of a licence under section 6 of the 1989 Act shall provide the
40
Secretary of State with all such information and other assistance as he may