Energy Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Energy Bill

Energy Bill
Part 1 — Carbon capture and storage
1

A
Bill
To
Make provision relating to the demonstration, assessment and use of carbon
capture and storage technology; to make provision for requiring benefits to be
provided by holders of gas or electricity supply licences; to make provision
about functions of the Gas and Electricity Markets Authority; to make
provision about general duties of the Secretary of State in relation to gas and
electricity markets; to make provision about electricity generation licences; to
make provision about persons authorised to supply gas or electricity; and for
connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
Carbon capture and storage
Financial assistance
1
Financial assistance
(1)
The Secretary of State may provide financial assistance in respect of CCS
5
demonstration projects.
(2)
If relevant financial assistance is provided in respect of a CCS demonstration project,
the Secretary of State may provide financial assistance in respect of additional CCS use
at the demonstration station.
(3)
The Secretary of State may make a scheme specifying—
10
(a)
a CCS demonstration project, and
(b)
the person or persons carrying out the project,

for the purpose of enabling the administrator to provide the person or persons with
financial assistance in respect of the project.

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Part 1 — Carbon capture and storage
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(4)
If relevant financial assistance is provided in respect of a CCS demonstration project,
the Secretary of State may make a scheme specifying—
(a)
additional CCS use at the demonstration station, and
(b)
the person or persons carrying out the additional CCS use,

for the purpose of enabling the administrator to provide the person or persons with
5
financial assistance in respect of the additional CCS use.
(5)
In this section “relevant financial assistance” means assistance provided—
(a)
by the Secretary of State, or
(b)
by the administrator under an assistance scheme.
2
Assistance schemes: further provision
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(1)
An assistance scheme may, in particular—
(a)
make provision about any of the matters specified in subsection (2), and
(b)
impose obligations or confer functions on a person (including the
Secretary of State).
(2)
These are the matters referred to in subsection (1)(a)—
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(a)
what is to be carried out as part of the assisted activities;
(b)
financial assistance to be given in respect of assisted activities, including
determination of the amount of financial assistance to be given, or to be given
at a particular time, by reference to particular matters;
(c)
administration of the scheme;
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(d)
safety and other standards applicable to assisted activities;
(e)
measurement and assessment of progress made in carrying out assisted
activities;
(f)
postponement, reduction or withdrawal of financial assistance to be
given, and repayment of financial assistance given, in respect of
25
assisted activities, including postponement, reduction, withdrawal and
repayment on account of financial assistance given in respect of
assisted activities from other sources;
(g)
payments to the administrator by participants in assisted activities;
(h)
disclosure of knowledge obtained in, or relating to, assisted activities,
30
including its disclosure to third parties;
(i)
audit of information (whether by the administrator or a third party),
including requirements for audits to be paid for by the person whose
information is subject to audit;
(j)
provision of information, including its provision to third parties;
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(k)
changes to what is to be carried out as part of the assisted activities;
(l)
changes to the persons who are the participants in relation to assisted
activities;
(m)
termination of the scheme;
(n)
compliance with the scheme, except imposition of penalties for non-
40
compliance;
(o)
reviews and appeals.
(3)
The Secretary of State may amend or revoke an assistance scheme.
(4)
Before making, amending or revoking an assistance scheme, the Secretary of
State must consult the following persons—
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(a)
the administrator;

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Part 1 — Carbon capture and storage
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(b)
the Scottish Ministers, but only if the assisted activities are in Scotland;
(c)
such other persons as the Secretary of State thinks it is appropriate to
consult.
(5)
If the Secretary of State makes or amends an assistance scheme, the Secretary
of State must lay before Parliament the scheme as made or amended.
5
(6)
If the Secretary of State revokes an assistance scheme, the Secretary of State
must lay before Parliament a memorandum of revocation of the scheme.
(7)
The power under section 1(3) or (4) or under subsection (3) of this section may
not be exercised—
(a)
to make a scheme unless all persons who would, by the exercise of the
10
power, be participants consent to the exercise of the power;
(b)
to amend a scheme unless—
(i)
the scheme allows for the exercise of the power,
(ii)
regulations under section 3 allow for the exercise of the power,
or
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(iii)
all relevant persons consent to the exercise of the power;
(c)
to revoke a scheme unless—
(i)
the scheme allows for the exercise of the power,
(ii)
regulations under section 3 allow for the exercise of the power,
or
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(iii)
all persons who are participants consent to the exercise of the
power.
(8)
For the purposes of subsection (7)(b)(iii) each of the following is a relevant
person in relation to a scheme that is to be amended—
(a)
each person who is a participant in relation to the scheme (including a
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person who would cease to be a participant by the exercise of the
power);
(b)
a person who would, by the exercise of the power, be a participant in
relation to the scheme.
3
Regulations relating to assistance schemes
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(1)
The Secretary of State may, by regulations, make provision about assistance schemes.
(2)
Regulations under this section may, in particular—
(a)
make provision about any of the matters specified in section 2(2); and
(b)
despite the exception in section 2(2)(n), impose penalties (whether financial or
not) in respect of failures to comply with the scheme;
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but the regulations may not create criminal offences.
(3)
Regulations under this section may not apply to an assistance scheme that is in
existence at the time the regulations are made, except with the consent of each
person who is, at that time, a participant in relation to that scheme.
(4)
Before making regulations under this section, the Secretary of State must
40
consult the following persons—
(a)
the administrator;
(b)
the Scottish Ministers;
(c)
such other persons as the Secretary of State thinks it is appropriate to
consult.
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(5)
Subsection (4) may be satisfied by consultation before, as well as by
consultation after, this section comes into force.
(6)
The following are subject to regulations under this section—
(a)
assistance schemes;
(b)
section 1(3) and (4);
5
(c)
section 2.
Electricity supply levy
4
Electricity supply levy
(1)
The Secretary of State may by regulations provide for an electricity supply levy to be
charged in connection with provision of financial assistance—
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(a)
in respect of CCS demonstration projects, and
(b)
in respect of additional CCS use at demonstration stations.
(2)
An electricity supply levy is a levy—
(a)
charged in respect of supplies of electricity that have been, or are
expected to be, made, and
15
(b)
paid by the persons who make, or are expected to make, the supplies in
respect of which the levy is charged.
(3)
The regulations may provide for different rates or different amounts of levy to
be charged in different cases.
(4)
The regulations may secure that the levy is not to be charged in respect of
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particular descriptions of supplies of electricity.
(5)
The regulations may, in particular, make provision about any of the following
matters—
(a)
what is a supply of electricity for the purposes of the levy;
(b)
when a supply of electricity is, or is expected to be, made for those
25
purposes;
(c)
who makes, or is expected to make, a supply of electricity for those
purposes;
(d)
payment of the levy, including interest in respect of late payment;
(e)
administration of the levy;
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(f)
audit of information (whether by the administrator or a third party),
including requirements for audits to be paid for by the person whose
information is subject to audit;
(g)
provision of information, including its provision to third parties;
(h)
enforcement of the levy, including—
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(i)
imposition of penalties (whether financial or not, and whether
or not in addition to interest charged in respect of late payment),
and
(ii)
recovery of the levy as a debt due to the Crown,

but not including the creation of criminal offences;
40
(i)
insolvency of persons liable to pay the levy;
(j)
reviews and appeals.
(6)
Before making regulations under this section, the Secretary of State must
consult the following persons—

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(a)
the administrator;
(b)
such other persons as the Secretary of State thinks it is appropriate to
consult.
(7)
Subsection (6) may be satisfied by consultation before, as well as by
consultation after, this section comes into force.
5
General
5
The administrator
(1)
The Authority is the administrator for the purposes of this Part.
(2)
But the Secretary of State may, by regulations, make provision for a public
body to become the administrator (whether in place of the Authority or a
10
person who is administrator by virtue of previous regulations under this
section).
(3)
Before making regulations under this section, the Secretary of State must
consult the following persons—
(a)
the person who would cease to be administrator by virtue of the
15
regulations;
(b)
such other persons as the Secretary of State thinks it is appropriate to
consult.
(4)
In this section “public body” includes the Secretary of State.
6
CCS demonstration projects and additional CCS use
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(1)
In this Part, “CCS demonstration project” means—
(a)
a project to demonstrate and assess carbon capture and storage
technology through its use in commercial coal-fired electricity
generation, or
(b)
a project to prepare for, or assess the feasibility of, a project falling
25
within paragraph (a) of this definition.
(2)
In this Part, “additional CCS use” means—
(a)
the use of carbon capture and storage technology in commercial coal-
fired electricity generation (including bringing the technology into
such use), apart from such use in a CCS demonstration project, or
30
(b)
activities to prepare for, or assess the feasibility of, use of carbon
capture and storage technology falling within paragraph (a) of this
definition.
(3)
In this section, “carbon capture and storage technology” means technology for
doing, or contributing to the doing of, any of the following things—
35
(a)
capturing carbon dioxide that has been produced by, or in connection
with, commercial coal-fired electricity generation;
(b)
transporting such carbon dioxide that has been captured;
(c)
disposing of such carbon dioxide that has been captured, by way of
permanent storage.
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(4)
For the purposes of this section—
“carbon dioxide” includes any substance consisting primarily of carbon
dioxide;

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“commercial coal-fired electricity generation” means generation of
electricity, on a commercial scale, by generating plant that is
powered—
(a)
by coal, or
(b)
by coal and biomass.
5
7
Interpretation of Part
In this Part—
“additional CCS use” has the meaning given in section 6;
“administrator” means the person who is the administrator by virtue of
section 5;
10
“assistance scheme” means a scheme under section 1(3) or (4);
“assisted activities”, in relation to an assistance scheme, means the CCS
demonstration project or additional CCS use specified in an assistance
scheme;
“CCS demonstration project” has the meaning given in section 6;
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“demonstration station” means an electricity generating station at which
a CCS demonstration project is carried out;
“functions” includes functions involving the exercise of a discretion;
“participant”, in relation to an assistance scheme, means the person or
persons carrying out the assisted activities.
20
Part 2
Schemes for reducing fuel poverty
8
Schemes for reducing fuel poverty
(1)
The Secretary of State may by regulations make one or more schemes for the
purpose of reducing fuel poverty.
25
(2)
A scheme under this section (“a support scheme”) must make provision
requiring licensed suppliers to whom the scheme applies to provide benefits to
customers determined by or in accordance with the scheme.
(3)
A support scheme may apply to—
(a)
licensed gas suppliers,
30
(b)
licensed electricity suppliers, or
(c)
both licensed gas suppliers and licensed electricity suppliers,

and, in any of those cases, may apply to such suppliers of any description,
including any description specified by reference to supplies, whether of gas or
electricity, or both, and whether made by the suppliers or by them and
35
associated persons.
(4)
A support scheme may in particular provide for scheme customers to be
determined in any of the following ways—
(a)
by reference to membership of, or to family or other relationship to a
member of, a fuel poverty risk group;
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(b)
by scheme suppliers;
(c)
by, or by reference to evidence provided by, the Secretary of State (or a
person providing services to the Secretary of State).

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(5)
Provision included in a support scheme by virtue of subsection (4)(b) may
specify requirements about criteria to be applied in determining who are to be
scheme customers.
(6)
A support scheme may specify—
(a)
the form of benefits and ways in which they are to be provided to
5
scheme customers under the scheme;
(b)
the amounts of any benefits to be so provided.
(7)
Subsection (6)(a) includes, in particular, power to provide for—
(a)
payments to be made to or in respect of scheme customers;
(b)
charges for supplies of gas or electricity to scheme customers to be
10
lower than charges for comparable supplies to other customers.
(8)
Subsection (6)(b) includes, in particular, power for a support scheme to make
provision—
(a)
as to the aggregate amount of benefits to be provided under it (or any
part of it) by scheme suppliers, or any scheme supplier, in any period
15
specified in the scheme;
(b)
as to the amount of any benefit to be provided under it to any scheme
customer;
(c)
as to how any amount is to be determined for the purposes of the
scheme, including, in particular, provision—
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(i)
for determining the amount of any benefit provided under the
scheme;
(ii)
for any determination to be made by a scheme supplier;
(iii)
for any amount of a benefit or benefits to be provided under the
scheme to be determined by reference to the amount of any
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benefit or benefits provided or to be provided under any other
support scheme;
(iv)
for payments by a scheme supplier to be treated as amounts of
benefits provided to scheme customers under the scheme;
(v)
for amounts of benefits provided by a scheme supplier under
30
the scheme to be adjusted by reference to payments made or
received, or to be made or received, by the scheme supplier
under a relevant reconciliation mechanism;
(vi)
for benefits provided under the scheme in any period specified
in the scheme to be treated as having been provided in any other
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period so specified.
(9)
Payments by a scheme supplier within subsection (8)(c)(iv) include, in
particular—
(a)
the whole, or any part specified in the scheme, of payments in respect
of costs incurred for the purposes of determining scheme customers
40
(including to the Secretary of State or the Authority under a
requirement imposed under section 9(3));
(b)
payments under pre-existing arrangements.
(10)
In this section, “relevant reconciliation mechanism”, in relation to a support
scheme, means a reconciliation mechanism operated in relation to the scheme
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(or any part of it) under section 10.