House of Commons Public Bill Committee Proceedings

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Public Bill Committee Proceedings: 11th March 2008
26

Energy Bill, continued

Access for renewable energy to the electricity and gas grids

Dr Alan Whitehead

Dr Desmond Turner

Paddy Tipping

Not called  NC13

To move the following Clause:—

‘(1)
After section 3A of the 1989 Electricity Act (c.29) there is inserted—

“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;

Public Bill Committee Proceedings: 11th March 2008
27

Energy Bill, continued

(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—

“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.

Public Bill Committee Proceedings: 11th March 2008
28

Energy Bill, continued

(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.”’.

Tariffs for renewable energy

Dr Alan Whitehead

Dr Desmond Turner

Paddy Tipping

Not called  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,

Public Bill Committee Proceedings: 11th March 2008
29

Energy Bill, continued

(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

(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

Negatived on division  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

Not selected  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”).

Public Bill Committee Proceedings: 11th March 2008
30

Energy Bill, continued

(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;

(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;

Public Bill Committee Proceedings: 11th March 2008
31

Energy Bill, continued

(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.

(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.’.

Use of biomethane

Dr Alan Whitehead

Dr Desmond Turner

Paddy Tipping

Not called  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

Not called  NC18

To move the following Clause:—

Public Bill Committee Proceedings: 11th March 2008
32

Energy Bill, continued

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

“36C
Generating stations: carbon dioxide emissions performance standard

(1)
The Secretary of State may by regulation prescribe a carbon dioxide

emission performance standard applying to any generating stations

requiring consent for construction or extension under section 36.

(2)
Regulations under this section must prescribe a carbon dioxide emission

performance standard that is in no case greater than 400 kilograms of

carbon dioxide per megawatt hour of electricity generated at any

individual generating station.

(3)
Regulations under this section may prescribe—

(a)
the ways in which proposed generating stations are able to

demonstrate compliance with the carbon dioxide emission

performance standard including by way of carbon capture and

storage;

(b)
the information that must be submitted with an application under

section 36 to demonstrate compliance with the carbon dioxide

emission performance standard;

(c)
how compliance by generating stations that have demonstrated

compliance with the prescribed performance standard and are

granted consent under section 36 shall be monitored and

enforced, including appointing and conferring powers on an

appropriate agency to carry out such monitoring and

enforcement;

(d)
any sources of electricity generation that are deemed to be

compliant with the carbon dioxide emission performance

standard including electricity generated from renewable sources.

(4)
The Secretary of State shall not grant a consent under section 36 for any

generating station that does not comply with any prescribed standard.

(5)
Before making regulations under this section (including setting the level

of performance standard), the Secretary of State shall consult—

(a)
electricity generators;

(b)
the Gas and Electricity Markets Authority;

(c)
the Gas and Electricity Consumer Council;

(d)
the Environment Agency with regard to England and Wales;

(e)
the Scottish Environmental Protection Agency with regard to

Scotland;

(f)
other persons or bodies representing the interests of the

electricity industry, local government and the environment, and

(g)
any other persons or bodies as he may consider appropriate.

(6)
The Secretary of State must make regulations under this section no later

than 12 months from the date on which this Act is passed.

(7)
Any regulations under this section shall not be made unless a draft at the

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

resolution of, each House of Parliament.

(8)
In this section—

“carbon dioxide emission performance standard” means a standard