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Energy Bill


Energy Bill
Part 2 — Electricity from renewable sources

22

 

(i)   

by the operator directly, or

(ii)   

by a person to whom the operator supplies the

electricity, being a person who is exempt from section

4(1)(c) and does not hold a supply licence.

32C     

Section 32B: supplemental provision

5

(1)   

A renewables obligation order may provide—

(a)   

that no renewables obligation certificates are to be issued in

respect of electricity generated in specified cases or

circumstances, or

(b)   

that renewables obligation certificates are to be issued in respect

10

of a proportion only of the electricity generated in specified

cases or circumstances.

(2)   

In particular, provision made by virtue of subsection (1) may specify—

(a)   

electricity generated using specified descriptions of renewable

sources,

15

(b)   

electricity generated by specified descriptions of generating

station, or

(c)   

electricity generated in specified ways.

(3)   

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

(a)   

provision about how the proportion is to be determined;

20

(b)   

provision about what, subject to such exceptions as may be

specified, constitutes sufficient evidence of any matter required

to be established for the purpose of determining that

proportion;

(c)   

provision authorising the Authority, in specified circumstances,

25

to require an operator of a generating station to arrange—

(i)   

for samples of any fuel used (or to be used) in the

generating station, or of any gas or other substance

produced as a result of the use of such fuel, to be taken

by a person, and analysed in a manner, approved by the

30

Authority, and

(ii)   

for the results of that analysis to be made available to the

Authority.

(4)   

In the case of electricity generated by a generating station fuelled or

driven—

35

(a)   

partly by renewable sources, and

(b)   

partly by fossil fuel (other than waste which constitutes a

renewable source),

   

only the proportion attributable to the renewable sources is to be

regarded as generated from such sources.

40

(5)   

A renewables obligation order may specify—

(a)   

how the proportion referred to in subsection (4) is to be

determined, and

(b)   

the consequences for the issuing of renewables obligation

certificates if a generating station of the type mentioned in that

45

subsection uses more than a specified proportion of fossil fuel

during a specified period.

 
 

Energy Bill
Part 2 — Electricity from renewable sources

23

 

(6)   

Those consequences may include the consequence that no certificates

are to be issued in respect of any of the electricity generated by that

generating station during that period.

(7)   

A renewables obligation order may specify circumstances in which the

Authority may revoke a renewables obligation certificate before its

5

production for the purposes of the renewables obligation.

(8)   

A renewables obligation order must—

(a)   

prohibit the issue of a renewables obligation certificate

certifying matters within section 32B(4) or (6) where the

Northern Ireland authority has notified the Authority that it is

10

not satisfied that the electricity in question has been supplied to

customers in Northern Ireland, and

(b)   

require the revocation of such a certificate if the Northern

Ireland authority so notifies the Authority at a time between the

issue of the certificate and its production for the purposes of the

15

renewables obligation.

(9)   

References in section 32B and this section to the supply of electricity to

customers in Northern Ireland are to be construed in accordance with

the definition of “supply” in Article 3 of the Electricity (Northern

Ireland) Order 1992.

20

32D     

 Amounts of electricity specified in certificates

(1)   

A renewables obligation order may specify the amount of electricity to

be stated in each renewables obligation certificate, and different

amounts may be specified in relation to different cases or

circumstances.

25

(2)   

In particular, different amounts may be specified in relation to—

(a)   

electricity generated from different renewable sources;

(b)   

electricity generated by different descriptions of generating

station;

(c)   

electricity generated in different ways.

30

(3)   

In this section “banding provision” means provision made in a

renewables obligation order by virtue of subsection (1).

(4)   

Before making any banding provision, the Secretary of State must have

regard to the following matters—

(a)   

the costs (including capital costs) associated with generating

35

electricity from each of the renewable sources or with

transmitting or distributing electricity so generated;

(b)   

the income of operators of generating stations in respect of

electricity generated from each of those sources or associated

with the generation of such electricity;

40

(c)   

the effect of paragraph 19 of Schedule 6 to the Finance Act 2000

(c. 17) (supplies of electricity from renewable sources exempted

from climate change levy) in relation to electricity generated

from each of those sources;

(d)   

the desirability of securing the long term growth, and economic

45

viability, of the industries associated with the generation of

electricity from renewable sources;

 
 

Energy Bill
Part 2 — Electricity from renewable sources

24

 

(e)   

the likely effect of the proposed banding provision on the

number of renewable obligations certificates issued by the

Authority, and the impact this will have on the market for such

certificates and on consumers;

(f)   

the potential contribution of electricity generated from each

5

renewable source to the attainment of any target which relates

to the generation of electricity or the production of energy and

is imposed by, or results from or arises out of, a Community

obligation.

(5)   

For the purposes of subsection (4)(a), the costs associated with

10

generating electricity from a renewable source include any costs

associated with the production or supply of heat produced in

connection with that generation.

(6)   

For the purposes of subsection (4)(b), an operator’s income associated

with the generation of electricity from a renewable source includes any

15

income connected with—

(a)   

the acquisition of the renewable source;

(b)   

the supply of heat produced in connection with the generation;

(c)   

the disposal of any by-product of the generation process.

(7)   

After the first order containing banding provision is made, no

20

subsequent order containing such provision may be made except

following a review held by virtue of subsection (8).

(8)   

A renewables obligation order—

(a)   

may authorise the Secretary of State to review the banding

provision at such intervals as are specified in or determined in

25

accordance with the order, and

(b)   

may authorise the Secretary of State to review the whole or any

part of the banding provision at any time when the Secretary of

State is satisfied that one or more of the specified conditions is

satisfied.

30

32E     

Section 32D: transitional provision and savings

(1)   

This section applies where a renewables obligation order contains

banding provision.

(2)   

The order may provide for the effect of any banding provision made in

an earlier order, or of any provision of a pre-commencement order, to

35

continue, in such circumstances as may be specified, in relation to—

(a)   

the electricity generated by generating stations of such a

description as may be specified, or

(b)   

so much of that electricity as may be determined in accordance

with the order.

40

(3)   

For the purposes of subsection (2) “pre-commencement order” means

an order made under section 32 before the coming into force of this

section.

(4)   

Subsection (5) applies to a generating station in respect of which a

statutory grant has been awarded (whether before or after the coming

45

into force of this section) if—

(a)   

the generating station first became operational after 11 July

2006, or

 
 

Energy Bill
Part 2 — Electricity from renewable sources

25

 

(b)   

the generating station is of a specified description or the

circumstances of the case meet specified requirements.

(5)   

A renewables obligation order which contains banding provision may

provide for the operation of that provision in relation to electricity

generated by each generating station to which this subsection applies

5

to be conditional upon the operator of the station agreeing—

(a)   

if the grant or any part of it has been paid, to repay to the

Secretary of State the whole or a specified part of the grant or

part before the repayment date,

(b)   

to pay to the Secretary of State interest on an amount repayable

10

under paragraph (a) for such period, and at such rate, as may be

determined by the Secretary of State, and

(c)   

if the grant or any part of it has not yet been paid, to consent to

the cancellation of the award of the grant or part.

(6)   

For the purposes of subsection (5)—

15

(a)   

“the repayment date” means the date specified in or determined

in accordance with the order, and

(b)   

the period for which interest is payable must not begin before

the grant was paid or, if the repayment relates to an instalment

of the grant, before the instalment was paid;

20

   

and, for the purposes of provision made under that subsection, a

renewables obligation order may make provision about the

cancellation of an award of a statutory grant or an instalment of such a

grant.

(7)   

For the purposes of subsection (4)(a), a generating station is operational

25

if it is generating electricity from renewable sources and one or more of

the following conditions is satisfied—

(a)   

the electricity is supplied to customers in Great Britain or

Northern Ireland;

(b)   

the electricity is used in a permitted way (within the meaning of

30

section 32B(9) and (10));

(c)   

at a time after 11 July 2006 but before 1 April 2007, the electricity

was sold by the operator of the generating station to an

electricity supplier or a Northern Ireland supplier and then

purchased back from that supplier by the operator of the

35

generating station and consumed by it.

(8)   

In this section “statutory grant” means—

(a)   

a grant awarded under section 5(1) of the Science and

Technology Act 1965 (grants to carry on or support scientific

research), or

40

(b)   

any other grant which is payable out of public funds and

awarded under or by virtue of an Act.

(9)   

This section is without prejudice to section 32K(1)(b) (power for

renewables obligation order to include transitional provision and

savings).

45

32F     

Use of renewables obligation certificates issued in Northern Ireland

(1)   

A renewables obligation order may provide that—

(a)   

in such cases as may be specified in the order, and

 
 

Energy Bill
Part 2 — Electricity from renewable sources

26

 

(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.

5

(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, in an order under Article 52 of that Order (renewables obligations

for Northern Ireland suppliers).

10

32G     

Payment as alternative to complying with renewables obligation order

(1)   

A renewables obligation order may provide—

(a)   

that an electricity supplier may (in whole or in part) discharge

its renewables obligation by making a payment to the Authority

before the last discharge day, and

15

(b)   

that an electricity supplier’s renewables obligation that was not

discharged in whole or in part before the last discharge day is to

be treated as having been discharged to the extent specified in

the order where the payment for which the order provides is

made to the Authority before the end of the late payment

20

period.

(2)   

The order may make provision—

(a)   

as to the sum which for the purposes of subsection (1) is to

correspond to a renewables obligation certificate,

(b)   

for the sums that must be paid in order for an obligation to be

25

treated as having been discharged to increase at a rate specified

in the order for each day after the last discharge day;

(c)   

for different sums or rates falling within paragraph (a) or (b) in

relation to different periods;

(d)   

for different such sums or rates in relation to electricity

30

generated in different cases or circumstances specified in the

order (including those of a kind referred to in section 32A(2)(c));

(e)   

for any such sum or rate to be adjusted from time to time for

inflation by a method specified in the order.

(3)   

The method specified under subsection (2)(e) may, in particular, refer

35

to a specified scale or index (as it may have effect from time to time) or

to other specified data of any description.

(4)   

A renewables obligation order may provide that, where—

(a)   

a renewables obligation is one in relation to which provision

made by virtue of subsection (1)(b) applies in the case of the

40

electricity supplier who is subject to the obligation, and

(b)   

the period ending with such day (after the last discharge day) as

may be specified in or determined under the order has not

expired,

   

the taking of steps under section 27A in respect of a contravention by

45

that supplier of that obligation is prohibited or otherwise restricted to

the extent specified in the order.

(5)   

A renewables obligation order may provide that, in a case in which the

amount received by the Authority, or by the Northern Ireland

 
 

Energy Bill
Part 2 — Electricity from renewable sources

27

 

authority, by way of discharge payments for a period falls short of the

amount due in respect of that period, every person who—

(a)   

was subject to a renewables obligation for the relevant period or

for a subsequent period specified in or determined under the

order, and

5

(b)   

is of a description so specified or determined,

   

must by the time and in the circumstances so specified or determined

make a payment (or further payment) to the Authority of an amount

calculated in the manner so specified or determined.

(6)   

A renewables obligation order may not by virtue of subsection (5)

10

confer an entitlement on the Authority to receive a payment in respect

of the shortfall for any period—

(a)   

in the case of a shortfall in the amount received by the

Authority, if the receipt of the payment is to be while a

prohibition or restriction by virtue of subsection (4) applies, in

15

one or more cases, to the taking of steps in relation to

contraventions of renewables obligations for that period, or

(b)   

in the case of a shortfall in the amount received by the Northern

Ireland authority, if the receipt of the payment is to be while a

prohibition or restriction by virtue of a corresponding provision

20

having effect in Northern Ireland applies, in one or more cases,

to the taking of steps in relation to contraventions of Northern

Ireland obligations for that period.

(7)   

The provision that may be made by virtue of subsection (5) includes—

(a)   

provision for the making of adjustments and repayments at

25

times after a requirement to make payments in respect of a

shortfall for a period has already arisen, and

(b)   

provision that sections 25 to 28 are to apply in relation to a

requirement imposed by virtue of that subsection on a person

who is not a licence holder as if the person were a licence holder.

30

(8)   

References in this section to an electricity supplier’s renewables

obligation include references to its renewables obligation in relation to

a particular period.

(9)   

For the purposes of this section, the amount received by the Authority

by way of discharge payments for a period falls short of the amount

35

due in respect of that period if, and to the extent that, the Authority

would have received more by way of discharge payments if every

renewables obligation for that period, so far as it was not otherwise

discharged, had been discharged by payment.

(10)   

For the purposes of this section the amount received by the Northern

40

Ireland authority by way of discharge payments for a period falls short

of the amount due in respect of that period if, and to the extent that, that

authority would have received more by way of discharge payments if

every Northern Ireland obligation for that period, so far as not

otherwise discharged, had been discharged by payment.

45

(11)   

In this section—

“discharge payment”, in relation to a period, means—

(a)   

a payment by virtue of subsection (1)(a) for discharging

(in whole or in part) an electricity supplier’s renewables

obligation for that period,

50

 
 

Energy Bill
Part 2 — Electricity from renewable sources

28

 

(b)   

so much of a payment by virtue of subsection (1)(b) for

securing that such an obligation is treated as discharged

to any extent as does not exceed the payment that would

have discharged that obligation to the same extent if it

had been made before the last discharge day, or

5

(c)   

so much of any payment to the Northern Ireland

authority as corresponds in relation to a Northern

Ireland obligation for that period, to anything falling

within paragraph (a) or (b) above;

“last discharge day” means the day specified as the day by which

10

renewables obligation certificates must be produced for the

purposes of section 32(4);

“late payment period” means such period beginning with the last

discharge day as may be specified;

“Northern Ireland obligation” means a renewables obligation of a

15

Northern Ireland supplier under Article 52 of the Energy

(Northern Ireland) Order 2003;

“the relevant period”—

(a)   

in relation to a shortfall in amounts received by the

Authority by way of discharge payments for a period,

20

means that period, and

(b)   

in relation to a shortfall in amounts received by the

Northern Ireland authority by way of discharge

payments for a period, means any period that includes

the whole or a part of that period.

25

32H     

Allocation of amounts to electricity suppliers

(1)   

The amounts received by the Authority by virtue of section 32G must

be paid by it to electricity suppliers in accordance with a system of

allocation specified in a renewables obligation order.

(2)   

Subsection (1) does not apply to those amounts to the extent that they

30

are used by the Authority under section 32I.

(3)   

The system of allocation specified in the order may provide for

payments to specified categories of electricity supplier only.

(4)   

That system may also provide for the postponement of a requirement

to make payments to electricity suppliers of amounts received by the

35

Authority under section 32G(1)(b) if, at the time the payments would

otherwise fall to be made, the aggregate of the amounts so received

(and not used under section 32I or already paid under subsection (1)) is

less than an amount specified in the order.

(5)   

The references in this section to electricity suppliers include references

40

to Northern Ireland suppliers.

32I     

Costs of the Authority and the Northern Ireland authority

(1)   

A renewables obligation order may provide for amounts received by the

Authority by virtue of section 32G to be used by the Authority

(a)   

to make payments into the Consolidated Fund in respect of costs (or a

45

proportion of costs) which have been or are expected to be incurred by

the Authority in connection with the performance of its functions

conferred by or under sections 32 to 32M, or

 
 

 
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