Energy Bill

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

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