The Renewables Obligation (Scotland) Order 2005

• (b) the Authority shall, in any September, within 10 banking days and in all other instances, within 5 banking days after the banking day on which it is first in receipt at the commencement of its working hours of requests which comply with paragraph 6(a) amend the particulars of the SROC recorded in the Register to show the substitute as the registered holder.

7

Where the Authority receives in writing a request for substitution it shall inform both the registered holder of the SROC and the substitute named therein that the request has been received and, in the event that the requests from the registered holder of the SROC and the person whom the registered holder wishes to be the substitute are not identical in all material respects or do not include the SROC identifier of the SROC, shall draw this to their attention.

8

Where a SROC is issued in accordance with article 4 or a replacement SROC is issued in accordance with article 5 or a substitute is recorded as the registered holder pursuant to paragraph 6, the Authority shall notify the registered holder (in the case of a SROC or a replacement SROC being issued) and the former and new registered holder (in the case of a substitution) in writing within 5 banking days of the issue or substitution having taken place.

9

The substitute shall not be the registered holder of the SROC until such time as the particulars of the SROC recorded in the Register identify the substitute as such.

10

The Register may be amended by a decision of the Authority–

• (a) where the Authority is satisfied that an entry in the Register has been obtained by fraud;

• (b) where a decision of a Court of competent jurisdiction or the operation of law requires the amendment of the Register;

• (c) in any other case where by reason of any error or omission on the part of the Authority it is necessary to amend the Register.

11

The contents of the Register (including the entries referred to in article 4(4)(b)) shall be available for inspection by the public on request at reasonable notice during the Authority’s working hours and at the request of any person the Authority shall provide a written statement of any entry on the Register including any entry referred to in article 4(4)(b).

12

Where any person considers that an entry maintained in respect of that person under article 4(4)(b) should be amended or deleted, that person may apply to the Authority in writing requesting that the entry be amended or deleted.

13

The Authority shall in any procedural guidelines which it produces provide details of its usual working hours.

SCHEDULE 3 — CONDITIONS OF ELIGIBILITY FOR NIROCs

1

The electricity to which the NIROC relates was generated from renewable sources.

2

The electricity was generated in Northern Ireland (which for the purposes of this paragraph shall not include any part of the territorial sea of the United Kingdom).

3

The electricity to which the NIROC relates was not generated by a generating station that is a large hydro generating station unless it was first commissioned after 1st April 2002.

4

Subject to paragraphs 5 and 6, the electricity to which the NIROC relates was not generated by a generating station (other than a micro hydro generating station) that was first commissioned before 1st January 1990 and where the main components of that generating station have not been renewed since 31st December 1989 as described in paragraph 17.

5

Paragraph 4 shall not apply in relation to a NIROC issued in respect of electricity generated by a generating station that during the month to which the NIROC relates was fuelled partly by fossil fuel and partly by biomass (and by no other fuel).

6

Paragraph 4 shall not apply in relation to a NIROC issued in respect of electricity generated by a generating station that during the month to which the NIROC relates was fuelled wholly by biomass, if–

• (a) prior to 1st April 2003 at least 75 per cent of the energy content of the fuel by which it was fuelled was derived from fossil fuel; and

• (b) during no month (being a month after March 2004) after the first month during which the generating station was fuelled wholly by biomass has the energy content of the fuel by which it was fuelled been derived as to more than 75 per cent from fossil fuel.

7

The electricity to which the NIROC relates was not generated by a generating station that in the month to which the NIROC relates was fuelled wholly or partly by waste unless–

• (a) the only waste by which it is fuelled in that month is biomass; or

• (b) all the waste by which it is fuelled in that month which is not biomass has first been manufactured into fuel which is in either a gaseous or liquid form (or both) by means of plant and equipment using advanced conversion technologies only.

8

The electricity to which the NIROC relates was not generated by a generating station that in the month to which the NIROC relates was fuelled partly by fossil fuel and partly by any other fuel (or fuels) other than biomass.

9

After 31st March 2009, the electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled partly by fossil fuel and partly by biomass (and by no other fuel) if during that month, less than the specified percentage of the energy content of the biomass derives from energy crops.

10

In paragraph 9 of this Schedule, “the specified percentage” means, in respect of any month from 1st April 2009 until 31st March 2010, 25 per cent; in respect of any month from 1st April 2010 until 31st March 2011, 50 per cent; and in respect of any month from 1st April 2011 until 31st March 2016, 75 per cent.

11

After 31st March 2016, the electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled partly by fossil fuel and partly by biomass (and by no other fuel).

12

The electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled wholly or partly by peat.

13

The electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled wholly or partly by any substance derived directly or indirectly from any of the substances referred to in article 11 (15)(a)(i) unless that substance is a substance falling within article 11(15)(a)(ii) or it is waste or a component of biomass.

14

The electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled wholly or partly by waste where all the waste which is not biomass is or is derived directly or indirectly from one or more of the substances referred to in article 11(15)(a)(i).

15

• (a) This paragraph applies where:

• (i) a qualifying arrangement (“the applicable qualifying arrangement”) provided for the building of a generating station at a specified location (“the location”);

• (ii) the applicable qualifying arrangement was terminated due to the operator of the generating station to which it applied having committed an unremedied breach of it; and

• (iii) the last period in the tables contained in Schedule 1 to the Non-Fossil Fuel Order which relates to the applicable qualifying arrangement has not expired.

• (b) If this paragraph applies then it is a condition of eligibility that the electricity to which the NIROC relates was not generated by a generating station that is situated at the location and to which the applicable qualifying arrangement applied at the time it was commissioned, or which is owned or operated by a person who was a party to the applicable qualifying arrangement (or who is a connected person or a linked person in relation to any such party).

• (c) This paragraph does not apply to a NIROC relating to electricity generated by a generating station which, during the month in question, generates only electricity which is sold pursuant to another extant qualifying arrangement.

• (d) In this paragraph and in paragraph 16, in relation to a person who is a party to the applicable qualifying arrangement (“the first person”), another person (“the second person”) is a “linked person” where the second person has given or has arranged to give or has ensured or has arranged to ensure that the first person is given, a financial or other inducement relating to any right or interest in, or in respect of, the construction or operation of a generating station at the location.

• (e) The references in sub-paragraph (d) to the first person and the second person shall include any person who is a connected person in relation to either of them.

16

• (a) This paragraph applies where an extant qualifying arrangement (“the applicable qualifying arrangement”) provides for the building of a generating station (“the specified station”) at a specified location (“the location”) and the specified station has not been commissioned.

• (b) If this paragraph applies then it is a condition of eligibility that the electricity to which the NIROC relates was not generated by a generating station which is situated at the location and which is owned or operated by a person who is a party to the applicable qualifying arrangement, or is a connected person or a linked person in relation to any such party.

• (c) This paragraph does not apply to a NIROC relating to electricity generated by a generating station which, during the month in question, generates only electricity which is sold pursuant to another extant qualifying arrangement.

17

For the purposes of paragraph 4, the main components of a generating station shall only be regarded as having been renewed since 31st December 1989 where–

• (a) in the case of a hydro generating station the following parts have been installed in the generating station after 31st December 1989 and were not used for the purpose of electricity generation prior to that date–

• (i) either all the turbine runners or all the turbine blades or the propeller; and

• (ii) either all the inlet guide vanes or all the inlet guide nozzles; or

• (b) in the case of any other generating station all the boilers and turbines (driven by any means including wind, water, steam or gas) have been installed in the generating station after 31st December 1989 and were not used for the purpose of electricity generation prior to that date.

18

The following terms shall have the meanings given below where they appear in this Schedule:

• (a) “fossil fuel” has the meaning given by article 11(15)(a);

• (b) “Non-Fossil Fuel Orders” has the meaning that it has in the NIRO Order under which the NIROC was issued;

• (c) “qualifying arrangement” has the meaning that it has in the NIRO Order under which the NIROC was issued;

• (d) “renewable sources” means sources of energy other than fossil fuel or nuclear fuel, but includes waste of which not more than a specified proportion is waste which is, or is derived from, fossil fuel;

• (e) “specified” means specified in this Schedule;

• (f) “waste” is to be regarded as including anything derived directly or indirectly from waste (as that term is defined in article 2(1)).

19

• (a) This paragraph applies to a generating station in respect of which the operator has given notice under a NIRO Order which, had that notice been given in respect of a station to which article 4(15) applies, would have constituted notice under article 4(15)(b), and where the operator has not done anything that, had it been done in respect of a station to which article 4(15) applies, would have constituted withdrawal of that notice under article 4(15)(e).

• (b) In the case of a generating station to which this paragraph applies the reference to “month” in each place where it occurs in this Schedule shall be taken to be a reference to “obligation period” where “obligation period” has the meaning that it has in the NIRO Order under which the NIROC in question was issued.

SCHEDULE 4 — AMOUNT OF RELEVANT SHORTFALL FOR EACH OBLIGATION PERIOD

Signed

ALLAN WILSON — Authorised to sign by the Scottish Ministers — 24th March 2005

Explanatory note

(This note is not part of the Regulations)

This Order is made under section 32 of the Electricity Act 1989 and imposes an obligation (“the renewables obligation”) on all electricity suppliers, which are licensed under that Act and which supply electricity in Scotland, to supply to customers in Great Britain specified amounts of electricity generated by using renewable sources. As alternatives, in respect of all or part of an electricity supplier’s renewables obligation, an electricity supplier is permitted to provide evidence that other licensed electricity suppliers have supplied electricity generated using renewable sources instead of it or to make a payment to the Gas and Electricity Markets Authority (“the Authority”). Renewable sources include sources of energy such as wind, water, solar and biomass.

The Order revokes and replaces, with amendment, the Renewables Obligation (Scotland) Order 2004 (“the 2004 Order”). The provisions of this Order are similar to the 2004 Order; however new provisions have been added relating to the recognition of NIROCs and the allocation of SROCs in respect of electricity generated in Great Britain but supplied to customers in Northern Ireland.

The new provisions of the Order also introduce a surcharge on late payments received by the Authority and a procedure known as mutualisation. This is a requirement for certain electricity suppliers to make payments to the Authority where, following a supplier’s default on its renewables obligation, there is less in the buy-out fund as established by article 15 of this Order, than there is expected to be (“a shortfall”).

Article 3 imposes the renewables obligation on electricity suppliers. The renewables obligation requires the electricity supplier to produce evidence of the supply of electricity generated from renewable sources to the Authority. The evidence required is certificates issued by the Authority. Those certificates issued under this Order are referred to as “SROCs”.

Article 4 and Schedule 2 provide for the issue of SROCs by the Authority and the maintenance by it of a register of SROCs.

Article 5 provides for the revocation of SROCs in specified circumstances.

Article 6 and Schedule 1 provide for how the amount of an electricity supplier’s renewables obligation is to be determined.

Article 7 provides that, instead of producing certificates to the Authority, an electricity supplier may discharge (in whole or part) its renewables obligation by making a payment to the Authority.

Article 8 provides for suppliers to discharge their renewables obligation by tendering eligible NIROCs to the Authority. Schedule 3 sets out the conditions governing NIROC eligibility.

Article 9 provides for an electricity supplier to discharge its renewables obligation by producing to the Authority certificates certifying the matters in section 32B(2A) of the Act rather than section 32B(2).

Articles 10, 11 and 12 determine what types of electricity generated from renewable sources are eligible to satisfy an electricity supplier’s renewables obligation.

Article 14 provides for the Authority to obtain information to enable it to carry out its functions under the Order.

Article 15 provides how payments made to the Authority by electricity suppliers under article 7 are to be divided amongst those electricity suppliers subject to the renewables obligation.

Article 16 provides for the exchange of information between the Authority and the Northern Ireland Authority relating to NIROCs produced to the Authority under article 8 and SROCs produced to the Northern Ireland Authority under NIRO orders.

Article 17 provides for an electricity supplier to be treated as having discharged its renewables obligation by making a late payment in accordance with that article. The late payment must be made during a specified period and is subject to a surcharge which rises on a daily basis. If a supplier only makes a partial late payment the remaining part of its renewables obligation not covered by the partial late payment remains outstanding and the supplier is still in default of its renewables obligation.

Article 18 provides for mutualisation and sets out the details of how the process will work; such as how a shortfall in the buy-out fund will be calculated and which shortfalls are recoverable via mutualisation. Specifically, where the shortfall is less than the sum set out in Schedule 4 for that obligation period, mutualisation is not triggered; when the shortfall is equal to or greater than the sum set out in Schedule 4 and does not exceed £20,000,000, the whole shortfall is recovered via mutualisation; and when the shortfall is over £20,000,000, only the first £20,000,000 of the shortfall is recovered.

The payments required by electricity suppliers in accordance with the article 18 are made in quarterly instalments. For example, for a shortfall in the obligation period 2005/2006 the instalments are required before the following dates: 1st September 2007, 1st December 2007, 1st March 2008 and 1st June 2008.

Article 19 makes provision relating to the functions of the Authority under the Order.

Article 20 revokes the 2004 Order, but also provides for savings provisions in respect of the obligations of each electricity supplier to produce evidence and other information in respect of the renewables obligation, or to make payments to the Authority, and to furnish information to the DTI, in respect of periods prior to the coming into force of the Order.

A regulatory impact assessment is available and can be obtained from the Energy Policy Unit, Scottish Executive Enterprise and Lifelong Learning Department, Meridian Court, 5 Cadogan Street, Glasgow, G2 6AT.

This Order re enacts provisions of the 2004 Order which gave effect to article 3.1 of the European Directive on the promotion of electricity produced from renewables energy sources in the internal market (Directive 2001/77/EC) [O.J. No. L283/33, 27.10.2001].

Footnotes

[^f00001]: 1989 c. 29. Section 62 of the Utilities Act 2000 (c. 27) substituted a new section 32 of the Electricity Act 1989 for the section 32 which was originally enacted. The new section 32 of the Electricity Act 1989 has subsequently been amended by sections 115 and 119 of the Energy Act 2004 (c. 20). Sections 63 to 65 of the Utilities Act 2000 inserted new sections 32A to 32C of the Electricity Act 1989, which have been amended by sections 115, 116, 118, and 119 of the Energy Act 2004. Section 32BA of the Electricity Act 1989 was inserted by section 117 of the Energy Act 2004. The functions of the Secretary of State, as regards sections 32 and 32A were transferred to the Scottish Ministers by virtue of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) (No. 2) Order 2000 (S.I. 2000/3253), article 3. The functions of the Secretary of State in respect of sections 32B and 32C of the Electricity Act 1989 and section 67 of the Utilities Act 2000 were transferred to the Scottish Ministers by virtue of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) (No. 2) Order 2001 (S.I. 2001/3504) article 2. The functions of the Secretary of State in respect of sections 32BA and 32(7) of the Electricity Act 1989 and sections 115(6), 116(8), 117(2), 118(2) and 119(7) of the Energy Act 2004 were transferred to the Scottish Ministers by virtue of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2005 (S.I. 2005/849) article 2.

[^f00002]: S.S.I. 2004/170.

[^f00003]: 1988 c. 1. Section 839 was amended by the Finance Act 1995 (c. 4), section 74 and Schedule 17, paragraph 20

[^f00004]: S.I. 2000/2727, as amended by S.I. 2001/3268

[^f00005]: S.I. 1994/3259, as amended by S.I. 1995/68

[^f00006]: S.I. 1994/3275 (S.190)

[^f00007]: S.I. 1997/248

[^f00008]: S.I. 1997/799 (S.76)

[^f00009]: S.I. 1998/2353

[^f00010]: S.I. 1999/439 (S.24)

[^f00011]: S.I. 1992/231 (N.I. 1)

[^f00012]: S.I. 2003/419 (N.I. 6).

[^f00013]: Section 4(4) was amended by section 28 of the Utilities Act 2000 and section 135 of the Energy Act 2004.

[^f00014]: 1990 c. 43.

[^f00015]: 1995 c. 25. At the time of the making of this Order paragraph 88 of Schedule 22 to the Environment Act 1995 has only been brought into force for the purposes of the Landfill (Scotland) Regulations 2003, SSI. 2003/235, but it is to be treated as if it had been brought into force for all purposes in this article.

[^f00016]: 1964 c. 29. Section 1(7) of the Continental Shelf Act 1964 was amended by the Oil and Gas (Enterprise) Act 1982 (c. 23), section 37 and Schedule 3, paragraph 1.

[^f00017]: 1976 c. 7.