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Public Bill Committee: 6th March 2008                  

152

 

Energy Bill, continued

 
 

emission limits notified by the Secretary of State to the Authority in

 

accordance with the provisions of the Climate Change Act 2008 [c. ].

 

(2)    

The Secretary of State and the Authority shall carry out those functions

 

in the manner which he or it considers is best calculated to further the

 

principal objective, having regard to—

 

(a)    

the protection of the interests of consumers in relation to gas or

 

heat conveyed through pipes, through effective competition

 

between persons engaged in, or in commercial activities

 

connected with, the transportation or supply of gas or heat; and

 

(b)    

the need to secure that, so far as it is economical to meet them,

 

all reasonable demands in Great Britain for gas and heat

 

conveyed though pipes are met; and

 

(c)    

the need to secure that licence holders are able to finance the

 

activities which are the subject of obligations imposed by or

 

under this Part or the Utilities Act 2000 (c.27).”

 

(2)    

For section 3(1) and (2) of the Electricity Act 1989 (c.29) substitute—

 

“(1)    

The principal objective of the Secretary of State and the Gas and

 

Electricity Markets Authority (in this Act referred to as “the Authority”)

 

in carrying out their respective functions under this Part is to deliver a

 

secure and sustainable energy system operating within greenhouse gas

 

emission limits notified by the Secretary of State to the Authority in

 

accordance with the provisions of the Climate Change Act 2008 [c ].

 

(2)    

The Secretary of State and the Authority shall carry out those functions

 

in the manner which he or it considers is best calculated to further the

 

principal objective, having regard to—

 

(a)    

the protection of the interests of consumers in relation to

 

electricity conveyed by distribution systems, through effective

 

competition between persons engaged in, or in commercial

 

activities connected with, the generation, transmission,

 

distribution or supply of electriciy; and

 

(b)    

the need to secure that all reasonable demands for electricity are

 

met; and

 

(c)    

the need to secure that licence holders are able to finance the

 

activities which are the subject of obligations imposed by or

 

under this Part of the Utilities Act 2000 (c.27).”’.

 


 

Access for renewable energy to the electricity and gas grids

 

Dr Alan Whitehead

 

Dr Desmond Turner

 

Paddy Tipping

 

 

NC13

 

To move the following Clause:—

 

‘(1)    

After section 3A of the 1989 Electricity Act (c.29) there is inserted—


 
 

Public Bill Committee: 6th March 2008                  

153

 

Energy Bill, continued

 
 

“3B    

Access for renewable energy to the electricity networks

 

(1)    

In carrying out their respective functions, the Secretary of State and the

 

Authority shall ensure that—

 

(a)    

transmission system operators and distribution system operators

 

guarantee the transmission and distribution of electricity

 

produced from renewable energy sources, without prejudice to

 

the maintenance of the reliability and safety of the grid;

 

(b)    

transmission system operators and distribution system operators

 

provide for priority access to the grid system for electricity

 

produced from renewable energy sources;

 

(c)    

when dispatching electricity generating installations,

 

transmission system operators shall give priority to generating

 

installations using renewable energy sources insofar as the

 

security of the national electricity system permits;

 

(d)    

transmission system operators and distribution system operators

 

are required to set up and publish their standard rules relating to

 

the bearing and sharing of costs of technical adaptations,

 

including grid connections and grid reinforcements, which are

 

necessary in order to integrate new producers feeding electricity

 

produced from renewable energy sources into the interconnected

 

grid, and that such rules—

 

(i)    

shall be based on objective, transparent and non-

 

discriminatory criteria taking particular account of all

 

the costs and benefits associated with the connection of

 

these producers to the grid and of the particular

 

circumstances of producers located in peripheral regions

 

and in regions of low population density,

 

(ii)    

may provide for different types of connection, and

 

(iii)    

shall provide for the sharing of costs to be enforced by a

 

mechanism based on objective, transparent and non-

 

discriminatory criteria taking into account the benefits

 

which initially and subsequently connected producers as

 

well as transmission system operators and distribution

 

system operators derive from connections;

 

(e)    

transmission system operators and distribution system operators

 

are required to provide any new producer wishing to be

 

connected to the system with a comprehensive and detailed

 

estimate of the costs associated with the connection;

 

(f)    

the charging of transmission and distribution fees does not

 

discriminate against electricity from renewable energy sources,

 

including in particular electricity from renewable energy sources

 

produced in peripheral regions, such as island regions, and in

 

regions of low population densitiy;

 

(g)    

fees charged by transmission system operators and distribution

 

system operators for the transmission and distribution of

 

electricity from plants using renewable energy souces reflect

 

realisable cost benefits resulting from the plant’s connection to

 

the network.

 

(2)    

The Secretary of State shall review and take the necessary measures to

 

improve the frameworks and rules for bearing and sharing of costs

 

referred to in paragraph (d) by 30th June 2011 at the latest, and every two

 

years thereafter, in order to ensure the intergration of new producers.

 

(2)    

After section 4AA of the Gas Act 1986 (c.44) there is inserted—


 
 

Public Bill Committee: 6th March 2008                  

154

 

Energy Bill, continued

 
 

“4AB  

Access for renewable gas to the gas networks

 

(1)    

In carrying out their respective functions, the Secretary of State and the

 

Authority shall ensure that—

 

(a)    

gas network operators guarantee the transport of gas produced

 

from renewable energy sources, without prejudice to the

 

maintenance of the reliability and safety of the gas networks;

 

(b)    

gas network operators provide for priority access to the gas

 

networks system for gas produced from renewable energy

 

sources;

 

(c)    

when dispatching gas, network operators shall give priority to

 

renewable energy sources insofar as the security of the national

 

gas system permits;

 

(d)    

gas network operators are required to set up and publish their

 

standard rules relating to the bearing and sharing of costs of

 

technical adaptations, such as gas network connections and gas

 

network upgrades, which are necessary in order to integrate new

 

producers feeding gas produced from renewable energy sources

 

in to the interconnected gas networks, and that such rules—

 

(i)    

shall be based on objective, transparent and non-

 

discriminatory criteria taking particular account of all

 

the costs and benefits associated with the connection of

 

these producers to the gas networks and of the particular

 

circumstances of producers located in peripheral regions

 

and in regions of low population density,

 

(ii)    

may provide for different types of connection, and

 

(iii)    

shall provide for the sharing of costs to be enforced by a

 

mechanism based on objective, transparent and non-

 

discriminatory criteria taking into account the benefits

 

which initially and subsequently connected producers as

 

well as gas network operators derive from the

 

connections;

 

(e)    

gas network operators are required to provide any new producer

 

wishing to be connected to the system with a comprehensive and

 

detailed estimate of the costs associated with the connection;

 

(f)    

the charging of transport fees does not discriminate against gas

 

from renewable energy sources, including in particular gas from

 

renewable energy sources produced in peripheral regions, such

 

as island regions, and in regions of low population densitiy; and

 

(g)    

fees charged by gas network operators for the transport of gas

 

from plants using renewable energy sources reflect realisable

 

cost benefits resulting from the plant’s connection to the

 

network.

 

(2)    

The Secretary of State shall review and take the necessary measures to

 

improve the frameworks and rules for bearing and sharing of costs

 

referred to in paragraph (d) by 30th June 2011 at the latest, and every two

 

years thereafter, in order to ensure the integration of new producers.”’.

 



 
 

Public Bill Committee: 6th March 2008                  

155

 

Energy Bill, continued

 
 

Tariffs for renewable energy

 

Dr Alan Whitehead

 

Dr Desmond Turner

 

Paddy Tipping

 

NC14

 

To move the following Clause:—

 

‘(1)    

The Secretary of State may by order impose on each energy supplier falling

 

within a specified description (a “designated energy supplier”) an obligation to

 

reimburse producers of renewable energy falling within a specified description (a

 

“renewable energy producer”) for each unit of renewable energy produced as set

 

out in subsection (4) (and that reimbursement rate is referred to in this section as

 

a “renewable energy tariff”).

 

(2)    

The descriptions of energy supplier upon which an order may impose the

 

renewable energy tariff are those supplying electricity or gas—

 

(a)    

in Great Britain;

 

(b)    

in England and Wales; or

 

(c)    

in Scotland,

 

    

excluding such categories of supplier as are specified.

 

(3)    

In this section—

 

“renewable source” has the same meaning as in the Utilities Act 2000 (c.

 

27);

 

“renewable energy” means energy from renewable sources;

 

“renewables obligation” means the obligation specified in section 32 of the

 

Electricity Act 1989 (c. 29);

 

“specified” means specified in the order.

 

(4)    

The renewable energy tariff shall set the reimbursement level for each kilowatt

 

hour of energy produced by the renewable source and may—

 

(a)    

be set at different levels for different types of renewable source,

 

(b)    

be varied at different times as prescribed in the order or in successive

 

orders.

 

(5)    

The order shall set out—

 

(a)    

the renewable sources in respect of which renewable energy tariffs shall

 

apply,

 

(b)    

the tariff applicable to each renewable source,

 

(c)    

which installations shall be eligible for renewable energy tariffs, and any

 

provisions to exclude installations accredited under the renewables

 

obligation,

 

(d)    

which renewable energy producer shall be eligible to receive renewable

 

energy tariffs,

 

(e)    

which designated energy supplier shall be responsible for paying the

 

renewable energy tariff to a particular renewable energy producer,

 

(f)    

the terms and duration of the renewable energy tariff arrangements,

 

(g)    

how the amount of energy produced and upon which the renewable

 

energy tariff is payable shall be measured, determined or deemed,

 

(h)    

provisions for the regulation of renewable energy tariff arrangements by

 

a designated body,

 

(i)    

provision for the Secretary of State to report periodically on the

 

effectiveness of the regulations made hereunder,

 

(j)    

any necessary amendment to distribution licences or supply licences held

 

by any person, and


 
 

Public Bill Committee: 6th March 2008                  

156

 

Energy Bill, continued

 
 

(k)    

such other provisions as may be required for the efficient and cost-

 

effective operation of the renewable energy tariff.

 

(6)    

Before making an order, the Secretary of State must consult—

 

(a)    

the Authority,

 

(b)    

the energy suppliers to whom the proposed order would apply,

 

(c)    

representatives of renewable energy producers to whom the proposed

 

order would apply, and

 

(d)    

any other persons he considers appropriate.

 

(7)    

An order under this section shall not be made unless a draft of the statutory

 

instrument containing it has been laid before, and approved by a resolution of,

 

each House of Parliament.’.

 


 

Extension of Marine Renewables Deployment Fund

 

Steve Webb

 

Martin Horwood

 

NC15

 

To move the following Clause:—

 

‘The Secretary of State shall make regulations to extend the remit of the Marine

 

Renewables Deployment Fund to include support for the early development of

 

wave and tidal technologies that need to complete pre-competitive research and

 

development through deployment and demonstration.’.

 


 

Social tariffs and energy assistance package

 

Paddy Tipping

 

Dr Alan Whitehead

 

Dr Brian Iddon

 

NC16

 

To move the following Clause:—

 

‘(1)    

The Secretary of State may make regulations prescribing that domestic gas and

 

electricity suppliers (“suppliers”), or each gas and electricity supplier of a

 

specified description, shall make available energy assistance packages to such gas

 

and electricity customers or group or groups of gas and electricity customers as

 

are prescribed by the Secretary of State (“eligible consumers”).

 

(2)    

The regulations shall—

 

(a)    

set out the group or groups of gas and electricity customers who are to be

 

eligible for energy assistance packages;

 

(b)    

specify the component parts of an energy assistance package, including

 

but not limited to obligations to—

 

(i)    

supply gas or electricity or both at a reduced cost (the “social

 

tariff”) to an eligible consumer;


 
 

Public Bill Committee: 6th March 2008                  

157

 

Energy Bill, continued

 
 

(ii)    

provide energy efficiency and heating measures that are

 

available to an eligible consumer through suppliers’ existing and

 

future energy efficiency obligations;

 

(iii)    

refer an eligible consumer to the relevant energy efficiency and

 

heating schemes funded by national and local government;

 

(iv)    

refer to such services that are able to verify that the recipient is

 

claiming or is able to claim all the financial assistance to which

 

they are entitled.

 

(c)    

specify the interval or intervals at which an eligible consumer’s

 

entitlement to the energy assistance package should be reviewed.

 

(3)    

The regulations shall set out the discounting mechanism that suppliers shall be

 

required to apply in order to ensure that the social tariff represents a rate lower

 

than any other rate available to other customers of that supplier, regardless of the

 

eligible customer’s payment method.

 

(4)    

The regulations shall specify the criteria by which the Secretary of State is to

 

determine targets that will set out the number of energy assistance packages

 

suppliers on whom the obligations are imposed by the regulations should offer

 

and the time period in which these targets are to be met.

 

(5)    

Particular provision in the regulations relating to the targets shall—

 

(a)    

require suppliers to give to the Secretary of State such specific

 

information, or information of a specified nature, about their proposals

 

for complying with their respective energy assistance package as

 

required by the Secretary of State;

 

(b)    

require gas and electricity suppliers to produce to the Secretary of State

 

evidence of a specified kind demonstrating that they have complied with

 

their obligations under this order;

 

(c)    

set out the method by which the Secretary of State will assess the

 

performance of each gas and electricity supplier against their respective

 

targets;

 

(d)    

set out the sanctions available to the Secretary of State in any instance

 

where gas and electricity suppliers fail to achieve the targets they have

 

been set under these regulations.

 

(6)    

The regulations shall prescribe the mechanisms by which the Secretary of State

 

shall ensure these regulations and resultant targets are implemented in a way that

 

falls on each supplier on whom these regulations are imposed, to ensure that no

 

supplier is unduly disadvantaged in competing with other suppliers as a result of

 

these obligations.

 

(7)    

The regulations shall set out the obligations upon other relevant departments and

 

agencies of government to assist suppliers and other agencies deemed appropriate

 

in—

 

(a)    

the efficient delivery of energy assistance packages to eligible

 

consumers;

 

(b)    

offering the income maximisation service component of the energy

 

assistance package described in (2)(b)(iii) above.

 

(8)    

The regulations may—

 

(a)    

provide for derogations from any of the requirements contained therein;

 

(b)    

make supplementary, incidental and transitional provisions;

 

(c)    

set out the arrangements applicable to suppliers who enter the supply

 

market after the beginning of the period to which the regulations relate.

 

(9)    

Before making any regulation under this section the Secretary of State shall

 

consult the Gas and Electricity Markets Authority (“the Authority”), the Gas and

 

Electricity Consumers Council (“the Council”) and suppliers and such other

 

persons as he considers appropriate.


 
 

Public Bill Committee: 6th March 2008                  

158

 

Energy Bill, continued

 
 

(10)    

Any regulations under this section shall not be made unless a draft of the

 

instrument containing it has been laid before, and approved by a resolution of,

 

each House of Parliament.’.

 

Member’s explanatory statement

 

This Amendment provides the Secretary of State with a permissive power to instruct energy

 

companies to bring forward measures to reduce fuel poverty.

 


 

Use of biomethane

 

Dr Alan Whitehead

 

Dr Desmond Turner

 

Paddy Tipping

 

NC17

 

To move the following Clause:—

 

‘(1)    

In section 32(8) of the Electricity Act 1989 (c. 29), in the definition of “renewable

 

sources”, at end insert—

 

‘(2)    

  

 

“and shall include the use of any gas drawn from a gas network to which

 

premises supplied by the supplier are connected where at the time the gas

 

is drawn from the network the supplier has arranged for the shipping to

 

the consumer at those premises of the same quantity of renewable

 

biomethane gas and that quantity has been introduced to the gas

 

transmission or distribution system to which the consumer’s premises are

 

connected.”.

 

(3)    

In section 124 of the Energy Act 2004 (c. 20), after subsection (5) insert—

 

“(6)    

For the purposes of this section ‘supplied’ shall include supply of any gas

 

or other fuel drawn from a gas or other fuel network to any premises

 

where at the time the gas or other fuel is drawn from the network by a

 

consumer the supplier has arranged for the shipping to the consumer at

 

the same premises of the same quantity of renewable transport fuel and

 

that quantity has been introduced to the gas transmission or distribution

 

system to which those premises are connected.”’.

 


 

Provision for regulations for a carbon dioxide performance standard on electricity

 

generating stations

 

Steve Webb

 

Martin Horwood

 

NC18

 

To move the following Clause:—

 

‘After section 36B of the Electricity Act 1989 insert—


 
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