Energy Act 2004

(6) References in this section to an electricity supplier’s renewables obligation include references to its renewables obligation in relation to a particular period. (7) For the purposes of this section— (a) the amount received by the Authority by way of discharge payments for a period falls short of the amount due in respect of that period, and (b) the amount received by the Northern 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, the Authority or (as the case may be) the Northern Ireland authority would have received more by way of discharge payments if every renewables obligation or (as the case may be) Northern Ireland obligation for that period, so far as it was not otherwise discharged, had been discharged by payment. (8) In this section— “discharge payment”, in relation to a period, means— (a) a payment by virtue of paragraph (a) of subsection (1) for discharging (in whole or in part) an electricity supplier’s renewables obligation for that period; (b) so much of a payment by virtue of paragraph (b) of that subsection 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 day mentioned in that paragraph; or (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; “Northern Ireland obligation” means a renewables obligation of a 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, 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.

• (6) The requirements of section 32(7) of the 1989 Act (consultation before making an order) may be satisfied in the case of an order containing provision made by virtue of this section by consultation that took place wholly or partly before the commencement of this section.

Issue of green certificates in Great Britain

116

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Use of green certificates issued in Northern Ireland

117

• (1) After section 32B of the 1989 Act insert—

(32BA) (1) An order under section 32 may provide that— (a) in such cases as may be specified in the order, and (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. (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).

• (2) The requirements of section 32(7) of the 1989 Act (consultation before making an order) may be satisfied in the case of an order containing provision made by virtue of this section by consultation that took place wholly or partly before the commencement of this section.

• (3) In Article 56(1) of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6)) (power to amend Part 7 of that Order to take account of amendments of corresponding Great Britain provisions), the reference to amendments made to sections 32 to 32C of the 1989 Act includes a reference to subsection (1) of this section.

• (4) Subsection (3) extends to Northern Ireland only.

Distributions to Northern Ireland suppliers

118

• (1) In section 32C of the 1989 Act (payment of money to discharge renewables obligation and distribution of fund to electricity suppliers), after subsection (4) insert—

(5) The references in subsections (3) and (4) to electricity suppliers include references to persons who are Northern Ireland suppliers.

• (2) The requirements of section 32(7) of the 1989 Act (consultation before making an order) may be satisfied in the case of an order containing provision made by virtue of this section by consultation that took place wholly or partly before the commencement of this section.

Supplementary provision relating to renewables obligation in Great Britain

119

• (1) In subsection (3) of section 32 of the 1989 Act (definition of renewables obligation), for “and 32C” substitute “ to 32C ”.

• (2) In subsection (7) of that section, for paragraph (d) substitute—

(d) such generators of electricity from renewable sources as he considers appropriate; and

.

• (3) After subsection (8) of that section insert—

(8A) In this section and in sections 32A to 32C— “generated” means generated at any place whether situated in the United Kingdom or elsewhere, and cognate expressions shall be construed accordingly; “Northern Ireland authority” means the Northern Ireland Authority for Energy Regulation; “Northern Ireland supplier” means an electricity supplier within the meaning of Part 7 of the Energy (Northern Ireland) Order 2003.

• (4) In section 32A of that Act (supplementary provision relating to orders under section 32), in subsection (3) for the words from “the differences” onwards substitute “ no supplier would by virtue of the differences be unduly disadvantaged in competing with other suppliers ”.

• (5) After that subsection insert—

(3A) In subsection (3) “supplier” means an electricity supplier or a Northern Ireland supplier.

• (6) In subsection (7) of that section, for “obligation imposed” substitute “ matters dealt with ”.

• (7) The requirements of section 32(7) of that Act (consultation before making an order) may be satisfied in the case of an order containing provision made by virtue of this section by consultation that took place wholly or partly before the commencement of this section.

Issue of green certificates in Northern Ireland

120

• (1) Article 54 of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6)) (which contains provision corresponding to provision contained in section 32B of the 1989 Act) is amended as follows.

• (2) After paragraph (2) insert—

(2A) In paragraphs (1) and (2) “Northern Ireland” does not include any part of the territorial sea of the United Kingdom. (2B) The provision that may be contained by virtue of this Article in an order under Article 52 includes— (a) provision for the person to whom a certificate is to be issued to be determined either before or after the supply of the electricity to which it relates; and (b) provision for a determination as to the person to whom a certificate is to be issued to be made in accordance with such arrangements as may be specified in or determined under the order. (2C) In the case only of a certificate relating to electricity that has been acquired, or is required to be acquired, under a qualifying arrangement, the arrangements within paragraph (2B)(b) that may be specified in or determined under the order include arrangements— (a) requiring the determination of the person to whom the certificate is to be issued to be made by reference to financial bids made in respect of the certificate or in respect of both the certificate and the electricity to which it relates; and (b) requiring that person to make a payment, in accordance with his bid, to such person as may be specified in or determined under the order. (2D) In the case only of a certificate relating to electricity that has been acquired, or is required to be acquired, under a qualifying arrangement, provision falling within paragraph (2B)(b) may require the relevant person— (a) to make and implement the arrangements that are specified in or determined under the order; and (b) to comply with directions given to him by the Authority for that purpose. (2E) A person who receives a payment in accordance with provision made by virtue of paragraph (2C)(b) shall apply the money received in such manner as the Department may direct. (2F) A direction under paragraph (2E) may require that the money received or part of that money be paid to the Department. (2G) Part VI shall apply in relation to a requirement imposed by virtue of paragraph (2D) or (2E) on a person who is not an electricity licence holder as if he were an electricity licence holder.

• (3) After paragraph (3) insert—

(4) An order under Article 52 may confer on the Authority functions in Northern Ireland in relation to the issue of Great Britain certificates. (5) In this Article— “Great Britain certificates” means certificates that are or may be issued by the Gas and Electricity Markets Authority in accordance with provision included, by virtue of section 32B of the Electricity Act 1989, in an order under section 32 of that Act; “qualifying arrangement” means an arrangement made pursuant to an order under Article 35 of the Electricity Order (or such an arrangement as modified or replaced by virtue of an order under Article 57 of this Order); “relevant person” means, in relation to electricity that is acquired, or is required to be acquired, under a qualifying arrangement, the person who acquired it, or who is required to acquire it.

• (4) The requirements of Article 52(6) of that Order (consultation before making an order) may be satisfied in the case of an order containing provision made by virtue of this section by consultation that took place wholly or partly before the commencement of this section.

• (5) This section extends to Northern Ireland only.

GEMA’s power to act on behalf of Northern Ireland regulator

121

• (1) GEMA and the Northern Ireland Authority for Utility Regulation (“the Northern Ireland Authority”) shall be entitled—

• (a) to enter into arrangements for GEMA to act on behalf of the Northern Ireland Authority for, or in connection with, the carrying out of the 2003 renewables obligations functions; and

• (b) to give effect to those arrangements.

• (2) In this section “the 2003 renewables obligations functions” means the functions conferred on the Northern Ireland Authority under or for the purposes of the Northern Ireland provisions.

• (3) For this purpose “the Northern Ireland provisions” means—

• (a) Articles 52 to 55 of the Energy (Northern Ireland) Order 2003 (renewables obligations for Northern Ireland suppliers), and

• (b) any provision made (whether before or after the passing of the Energy Act 2008) by an order under Article 56 of the Energy (Northern Ireland) Order 2003 which amends Part 7 of that Order.

Consultation in relation to Northern Ireland renewables orders

122

• (1) This section applies where the Department of Enterprise, Trade and Investment in Northern Ireland amends the provisions of Part 7 of the 2003 Order (renewables obligations for Northern Ireland suppliers) by way of an amending order to take account of amendments of the 1989 Act made by this Chapter.

• (2) In the case of a renewables order containing provision made by virtue of the amending order, the requirements of Article 52(6) of the 2003 Order (consultation before making a renewables order) may be satisfied by consultation that took place wholly or partly before the amending order came into force (including consultation taking place before the commencement of this section).

• (3) In this section—

• “amending order” means an order under Article 56 of the 2003 Order;

• “the 2003 Order” means the Energy (Northern Ireland) Order 2003;

• “renewables order” means an order under Article 52 of the 2003 Order.

• (4) This section extends to Northern Ireland only.

Modification of conditions of Northern Ireland electricity licences

123

• (1) In Part 7 of the Energy (Northern Ireland) Order 2003 (renewable energy sources), after Article 58 insert—

(58A) (1) Where the Department or the Authority considers it necessary or expedient to do so in connection with— (a) amendments of this Order made by section 120 of the Energy Act 2004, or (b) provision made by an order under Article 56 to take account of amendments of the Electricity Act 1989 made by Chapter 4 of Part 2 of that Act of 2004, it may modify the conditions of an electricity licence. (2) The power to make modifications under this Article includes power to make incidental, consequential or transitional modifications. (3) Before making a modification of a licence condition under this Article the Department shall consult the Authority and the licence holder. (4) Before making a modification of a licence condition under this Article the Authority shall— (a) consult the licence holder; and (b) obtain the consent of the Department to the modification. (5) Paragraphs (3) and (4)(a) may be satisfied by consultation— (a) that, in the case of a modification within paragraph (1)(b), took place wholly or partly before the order in question comes into force; and (b) that, in any case, took place wholly or partly before the commencement of this Article. (6) Where the Department or the Authority makes any modifications under this Article it shall publish those modifications in such manner as it considers appropriate. (7) The power conferred by virtue of paragraph (1)(a) may not be exercised after the end of the period of two years beginning with the commencement of this Article. (8) The power conferred by virtue of paragraph (1)(b) may not be exercised in relation to an order under Article 56 after the end of the period of two years beginning with the day on which the order comes into force.

• (2) This section extends to Northern Ireland only.

Chapter 5 — Renewable transport fuel obligations

Imposition of renewable transport fuel obligations

124

• (1) The Secretary of State may by order impose on each transport fuel supplier of a specified description the obligation mentioned in subsection (2) (a “renewable transport fuel obligation”).

• (2) That obligation is an obligation, for each specified period, for the supplier to produce to the Administrator, by the specified date, evidence which—

• (a) is of the specified kind and in the specified form; and

• (b) shows that during the specified period the specified amount of renewable transport fuel was supplied at or for delivery to places in the United Kingdom.

• (3) An order under subsection (1) is referred to in this Chapter as an “RTF order”.

• (4) Before making an RTF order the Secretary of State must consult such persons appearing to him to represent persons whose interests will be affected by the order, and such other persons, as he considers appropriate.

• (5) The power to make an RTF order is subject to the affirmative resolution procedure.

The Administrator

125

• (1) For the purposes of provision made by or under this Chapter, an RTF order may—

• (a) establish a body corporate, and

• (b) appoint that body as the Administrator.

• (2) An RTF order may—

• (a) make provision for the appointment of members of the body;

• (b) make provision in relation to the staffing of the body;

• (c) make provision in relation to the expenditure of the body;

• (d) make provision regulating the procedure of the body;

• (e) make any other provision that the Secretary of State considers appropriate for purposes connected with the establishment and maintenance of the body.

• (3) The provision that may be made by an RTF order by virtue of this section includes, in particular, provision conferring discretions on—

• (a) the Secretary of State;

• (b) the body itself; or

• (c) members or staff of the body.

Determinations of amounts of transport fuel

126

• (1) An RTF order may make provision about how amounts of transport fuel are to be counted or determined for the purposes of provision made by or under this Chapter.

• (2) The provision that may be made by virtue of this section includes, in particular—

• (a) provision for amounts of renewable transport fuel to count towards discharging a renewable transport fuel obligation for a period only if the fuel is of a specified description;

• (b) provision for amounts of renewable transport fuel of a specified description to count towards discharging such an obligation only up to a specified amount;

• (c) provision for such an obligation not to be treated as discharged unless a specified minimum amount of renewable transport fuel of a specified description has been counted towards its discharge;

• (d) provision for only such proportion of any renewable transport fuel of a specified description as is attributable to a specified substance, source of energy, method, process or other matter to count towards discharging such an obligation;

• (e) provision as to how that proportion is to be determined;

• (f) provision for an amount of renewable transport fuel of a specified description to count towards discharging such an obligation only if, or to the extent that, specified conditions are satisfied in relation to its supply, the person by or to whom it was supplied or the place at or for delivery to which it was supplied;

• (g) provision for evidence produced by a supplier in relation to any fuel not to count for the purposes of his renewable transport fuel obligation for a period if evidence in relation to the same fuel has previously been produced (whether by him or by another supplier);

• (h) provision for evidence produced by a supplier in relation to any fuel not to count for those purposes if, after the supply to which the evidence relates, the fuel is supplied by any person at or for delivery to a place outside the United Kingdom or a specified part of the United Kingdom;

• (i) provision about the measurement of amounts of different descriptions of transport fuel;

• (j) provision for units of transport fuel of a specified description to count for more or less than the same units of transport fuel of other descriptions;

• (k) provision about how measurements in different units of different descriptions of transport fuel are to be aggregated;

• (l) provision for the application of presumptions where specified matters are shown.

• (3) The provision that may be made by virtue of this section also includes, in particular, provision which—

• (a) is made having regard to one or more of the effects mentioned in subsection (4) (whether in the United Kingdom or elsewhere); or

• (b) requires regard to be had to one or more such effects.

• (4) Those effects are the effects of the production, supply or use of fuel of a particular description on—

• (a) carbon emissions;

• (b) agriculture;

• (c) other economic activities;

• (d) sustainable development; or

• (e) the environment generally.

• (5) If an RTF order makes provision for the counting or determination of amounts of transport fuel for the purposes of provision made by or under this Chapter by reference to any document, it may provide for references to the document to have effect as references to it as revised or re-issued from time to time.

• (6) The Secretary of State may give written directions to the Administrator about the exercise of any of the Administrator's functions in connection with the counting or determination of amounts of transport fuel for the purposes of provision made by or under this Chapter.

• (7) The power to give directions under subsection (6) includes power to vary or revoke the directions.

• (8) The Administrator must comply with any directions given under that subsection.

Renewable transport fuel certificates

127

• (1) An RTF order may make provision for the Administrator to issue certificates to transport fuel suppliers (“RTF certificates”).

• (2) An RTF certificate is to certify—

• (a) that the supplier to whom it is issued has supplied the amount of renewable transport fuel stated in the certificate;

• (b) that that amount of such fuel was supplied by him during the period stated in the certificate;

• (c) that that amount of such fuel was supplied by him during that period at or for delivery to a place in the United Kingdom or in the part of the United Kingdom stated in the certificate; and

• (d) the other specified facts.

• (3) Such a certificate may be issued to a supplier only if—

• (a) he applies for it in the specified manner;

• (b) his application includes evidence of the specified kind and in the specified form; and

• (c) the other specified conditions are satisfied.

• (4) An RTF order may authorise transfers of RTF certificates (whether for a consideration or otherwise) between persons of specified descriptions.

• (5) Such an order may also provide that such a transfer is not to be effective unless—

• (a) the specified details of it have been notified to the Administrator in the specified manner and within the specified time; and

• (b) the other specified requirements have been complied with.

• (6) If a supplier produces an RTF certificate to the Administrator, it is to count for the purposes of section 124(2) as sufficient evidence of the facts certified.

• (7) An RTF order may provide that, in specified circumstances, evidence produced by virtue of subsection (6) may count to the specified extent towards the discharge of a renewable transport fuel obligation for a period even if it is produced after the time by which evidence had to be produced for the purposes of that obligation.

• (8) Such an order may also provide that, in specified circumstances, evidence produced by virtue of subsection (6) may count to the specified extent towards the discharge of a renewable transport fuel obligation for a period that is later than the period stated in the certificate in question in accordance with subsection (2)(b).

Discharge of obligation by payment

128

• (1) An RTF order may provide that a person who does not wholly discharge his renewable transport fuel obligation for a period by the production of evidence must pay the Administrator the specified sum within the specified period.

• (2) The provision that may be made by virtue of subsection (1) includes, in particular, provision—

• (a) for the specified sum to increase, in cases where that sum is not paid within a specified period, at the specified rate until it is paid or until the occurrence of a specified event;

• (b) for specified amounts to be adjusted from time to time for inflation in the specified manner;

• (c) for the repayment of sums in cases where provision made by virtue of section 127(7) applies in relation to a person;

• (d) prohibiting the Administrator from taking steps to recover the specified sum or a part of that sum if specified conditions are satisfied.

• (3) Provision within subsection (2)(b) may refer, in particular, to a specified index or to other data, including any index or data as modified from time to time after the coming into force of the order.

• (4) An RTF order may provide that, in a case in which the amount of payments by virtue of subsection (1) which the Administrator has received by the specified time in respect of renewable transport fuel obligations for any period falls short of the amount due in respect of that period, the persons who—

• (a) were subject to renewable transport fuel obligations for that period, and

• (b) are of a specified description,

must, within the specified period and in the specified circumstances, each make a payment (or further payment) to the Administrator of an amount calculated in the specified manner.

• (5) The provision that may be made by virtue of subsection (4) includes, in particular, provision for the making of adjustments and repayments after a requirement to make payments has already arisen.

• (6) Where the Administrator is the Secretary of State—

• (a) sums received by the Administrator by virtue of this section must be paid into the Consolidated Fund, and

• (b) an RTF order may make provision for sums to be paid by the Administrator to transport fuel suppliers, or to transport fuel suppliers of a specified description, in accordance with the specified system of allocation.

• (7) Such an order must contain provision ensuring that the total of the sums so paid by the Administrator does not at any time exceed the total of the sums so received by the Administrator up to that time.

• (8) Where the Administrator is a person other than the Secretary of State, an RTF order may—

• (a) require the Administrator to use, to the specified extent, sums received by the Administrator by virtue of this section for the purpose of meeting costs incurred in carrying out the Administrator's functions, or

• (b) require the Administrator to pay, to the specified extent, sums so received to the Secretary of State.

• (9) Sums so received which are not dealt with in accordance with provision made under subsection (8) must be paid by the Administrator to transport fuel suppliers, or to transport fuel suppliers of a specified description, in accordance with the specified system of allocation.

• (10) The Secretary of State must pay sums received by the Secretary of State by virtue of provision made under subsection (8)(b) into the Consolidated Fund.

Imposition of civil penalties

129

• (1) An RTF order may—

• (a) designate a provision made by or under this Chapter for the purposes of this section; and

• (b) provide that a person is to be liable to a civil penalty if—

• (i) he contravenes that provision; and

• (ii) any other specified conditions are satisfied.

• (2) Where the Administrator is satisfied that a person (the “defaulter”) is so liable, he may give a notice to the defaulter in the specified manner (a “civil penalty notice”) imposing on the defaulter a penalty of such amount as the Administrator considers appropriate.

• (3) That penalty must not exceed the lesser of—

• (a) the specified amount; and

• (b) the amount equal to ten per cent of the turnover, as determined in the specified manner, of the specified business of the defaulter.

• (4) The civil penalty notice must—

• (a) set out the Administrator’s reasons for deciding that the defaulter is liable to a penalty;

• (b) state the amount of the penalty that is being imposed;

• (c) set out a date before which the penalty must be paid to the Administrator;

• (d) describe how payment may be made;

• (e) explain the steps that the defaulter may take if he objects to the penalty; and

• (f) set out and explain the powers of the Administrator to enforce the penalty.

• (5) The date for the payment of the penalty must not be less than 14 days after the giving of the civil penalty notice.

• (6) A penalty imposed by virtue of this section must be paid to the Administrator—

• (a) by the date set out in the civil penalty notice by which it is imposed; and

• (b) in a manner described in that notice.

• (7) Sums received by the Administrator by virtue of this section—

• (a) where the Administrator is the Secretary of State, must be paid into the Consolidated Fund, and

• (b) otherwise, must be paid to the Secretary of State, who must pay them into the Consolidated Fund.

Objections to civil penalties

130

• (1) A person to whom a civil penalty notice is given may give notice to the Administrator that he objects to the penalty on one or both of the following grounds—

• (a) that he is not liable to pay it;

• (b) that the amount of the penalty is too high.

• (2) The notice of objection—

• (a) must set out the grounds of the objection and the objector’s reasons for objecting on those grounds; and

• (b) must be given to the Administrator in the specified manner and within the specified period after the giving of the civil penalty notice.

• (3) The Administrator must consider a notice of objection given in accordance with this section and may then—

• (a) cancel the penalty;

• (b) reduce it;

• (c) increase it; or

• (d) confirm it.

• (4) The Administrator must not enforce a penalty in respect of which he has received a notice of objection before he has notified the objector of the outcome of his consideration of the objection.

• (5) That notification of the outcome of his consideration must be given, in the specified manner—

• (a) before the end of the specified period; or

• (b) within such longer period as he may agree with the objector.

• (6) Where, on consideration of an objection, the Administrator increases the penalty, he must give the objector a new civil penalty notice; and, where he reduces it, the notification mentioned in subsection (5) must set out the reduced amount.

Appeals against civil penalties

131

• (1) A person to whom a civil penalty notice is given may appeal to the court on one or both of the following grounds—

• (a) that he is not liable to pay the penalty;

• (b) that the amount of the penalty is too high.

• (2) An appeal under this section must be brought within such period after the giving of the civil penalty notice as may be set out in rules of court.

• (3) On an appeal under this section, the court may—

• (a) allow the appeal and cancel the penalty;

• (b) allow the appeal and reduce the penalty; or

• (c) dismiss the appeal.

• (4) An appeal under this section is to be by way of a rehearing of the Administrator’s decision to impose the penalty.

• (5) The matters to which the court may have regard when determining an appeal under this section include all matters that the court considers relevant, including—

• (a) matters of which the Administrator was unaware when he made his decision; and

• (b) matters which (apart from this subsection) the court would be prevented from having regard to by virtue of rules of court.

• (6) An appeal under this section may be brought in relation to a penalty irrespective of whether a notice of objection under section 130 has been given in respect of that penalty or whether there has been an increase or reduction under that section.

• (7) In this section “the court” means—

• (a) in England and Wales or Northern Ireland, the High Court; and

• (b) in Scotland, the Court of Session.

Interpretation of Chapter 5 of Part 2

132

• (1) In this Chapter—

• “Administrator” means the person for the time being appointed as the Administrator by order under this Chapter;

• “authorised person” has the meaning given by section 131A(3);

• “biofuel” means liquid or gaseous fuel that is produced wholly from biomass;

• “blended biofuel” means liquid or gaseous fuel consisting of a blend of biofuel and fossil fuel;

• “civil penalty notice” has the meaning given by section 129(2);

• “enactment” includes—an enactment contained in subordinate legislation,an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament,an enactment contained in, or in an instrument made under, Northern Ireland legislation, andan enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales;

• “renewable transport fuel” means—biofuel;blended biofuel;any solid, liquid or gaseous fuel (other than fossil fuel or nuclear fuel) which is produced—wholly by energy from a renewable source; orwholly by a process powered wholly by such energy; orany solid, liquid or gaseous fuel which is of a description of fuel designated by an RTF order as renewable transport fuel;

• “renewable transport fuel obligation” has the meaning given by section 124(1);

• “RTF order” has the meaning given by section 124(3);

• “specified” means specified in, or determined in accordance with, an RTF order;

• “supply” means, in relation to fuel, the supply of that fuel to any person with a view to its being used (whether by that person or persons to whom it is subsequently supplied) wholly or primarily for transport purposes;

• “transport fuel” means—renewable transport fuel;fossil fuel; orany solid, liquid or gaseous fuel that is neither renewable transport fuel nor fossil fuel;

• “transport fuel supplier” means a person who, in the course of any business of his, supplies transport fuel at or for delivery to places in the United Kingdom.

• (2) For the purposes of this section a process powered by electricity that was generated by energy from a particular source is to be treated as being powered by energy from that source.

• (3) For the purposes of this section fuel is used for transport purposes if—

• (a) it is used as fuel for one or more of the following—

• (i) any mode of transport, including vehicles, vessels, aircraft and trains;

• (ii) recreational craft which do not normally operate at sea;

• (iii) ... tractors;

• (iv) non-road mobile machinery, including inland waterway vessels which do not normally operate at sea; or

• (b) it is used for producing fuel that is intended to be so used.

• (3A) For the purposes of subsection (3) “sea”—

• (a) includes tidal rivers and estuaries;

• (b) does not include—

• (i) non-tidal rivers and canals where the significant wave height could not be expected to exceed 0.6 metres at any time; and

• (ii) lakes and lochs where the significant wave height could not be expected to exceed 1.2 metres at any time.

• (4) In this section—

• ...

• “biomass” means the biodegradeable portion of a specified product, waste or residue;

• “fossil fuel” has the same meaning as in section 32M of the 1989 Act;

• “inland waterway vessel” means an inland waterway vessel, within the meaning given by Article 3(c) of the 2016 Directive, to which that Directive applies (see Article 2 of the 2016 Directive); and in this definition “the 2016 Directive” means Directive EU 2016/1629 of the European Parliament and of the Council of 14 September 2016 laying down technical requirements for inland waterway vessels;

• “non-road mobile machinery” means non-road mobile machinery, within the meaning given by Article 3(1) of the 2016 Regulation, which has installed in it an engine within a category set out in paragraph 1 of Article 4 of that Regulation; and in this definition “the 2016 Regulation” means Regulation (EU) 2016/1628 of the European Parliament and of the Council of 14 September 2016 on requirements relating to gaseous and particulate pollutant emission limits and type-approval for internal combustion engines for non-road mobile machinery;

• “recreational craft” has the meaning given by Article 3(2) of Directive 2013/53/EU of the European Parliament and of the Council of 20 November 2013 on recreational craft and personal watercraft;

• “renewable source”, in relation to energy, means any of the following non-fossil sources of energy, namely wind, the sun, aerothermal sources, geothermal sources, water (including hydrothermal sources, waves and tides) and biomass (including landfill gas, sewage treatment plant gas and biogases), where—“aerothermal” means energy stored in the form of heat in the ambient air;“geothermal” means energy stored in the form of heat beneath the surface of solid earth; and“hydrothermal” means energy stored in the form of heat in surface water;

• “tractor” has the meaning given by Article 3(8) of Regulation (EU) No 167/2013 of the European Parliament and of the Council of 5 February 2013 on the approval and market surveillance of agricultural and forestry vehicles.

Part 3 — Energy Regulation

Chapter 1 — Electricity trading and transmission

“New trading and transmission arrangements”

133

• (1) References in this Chapter to the new trading and transmission arrangements are to new arrangements relating to the trading and transmission of electricity in Great Britain designed—

• (a) to promote the creation of a single competitive wholesale electricity trading market, and

• (b) to introduce a single set of arrangements for access to and use of any transmission system in Great Britain.

• (2) Expressions used in subsection (1) have the same meaning as in Part 1 of the 1989 Act (electricity supply), as amended by section 135.

Power to modify licence conditions

134

• (1) If the Secretary of State considers it necessary or expedient to do so for the purpose of implementing the new trading and transmission arrangements (whether wholly or partly), he may modify—

• (a) the conditions of a particular licence under section 6 of the 1989 Act (licences authorising supply etc.), or

• (b) the standard conditions of licences of any of the types of licence mentioned in subsection (1) of that section (generation, transmission, distribution or supply licences).

• (2) The power under subsection (1) includes—

• (a) power to make modifications relating to the operation of distribution systems, and

• (b) power to make incidental, consequential or transitional modifications.

• (3) Before making modifications under this section, the Secretary of State shall consult the holder of any licence being modified and such other persons as he considers appropriate.

• (4) Subsection (3) may be satisfied by consultation before, as well as by consultation after, the commencement of this section.

• (5) The Secretary of State shall publish any modifications under subsection (1) in such manner as he considers appropriate.

• (6) Any modification under subsection (1)(a) of part of a standard condition of a licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of Part 1 of the 1989 Act.

• (7) Where the Secretary of State modifies the standard conditions of licences of any type under subsection (1)(b), GEMA shall—

• (a) make (as nearly as may be) the same modifications of those standard conditions for the purposes of their incorporation in licences of that type granted after that time, and

• (b) publish the modifications in such manner as it considers appropriate.

• (8) The power under subsection (1) may not be exercised after the end of the period of eighteen months beginning with the day on which that subsection comes into force.

• (9) In subsection (2)(a), the reference to distribution systems is to be construed in accordance with section 4(4) of the 1989 Act.

Alteration of transmission activities requiring licence

135

• (1) Section 4 of the 1989 Act (prohibition on unlicensed activities in connection with supply of electricity) is amended as follows.

• (2) In subsection (1) (which lists the activities prohibited), for paragraph (b) substitute—

(b) participates in the transmission of electricity for that purpose;

.

• (3) After subsection (3) insert—

(3A) In subsection (1)(b) above, the reference to a person who participates in the transmission of electricity is to a person who— (a) co-ordinates, and directs, the flow of electricity onto and over a transmission system by means of which the transmission of electricity takes place, or (b) makes available for use for the purposes of such a transmission system anything which forms part of it. (3B) For the purposes of subsection (3A)(b), a person shall not be regarded as making something available just because he consents to its being made available by another.

• (4) In subsection (4) (definitions for the purposes of Part 1), for the definition of “transmit” substitute—

“transmission”, in relation to electricity, means transmission by means of a transmission system; “transmission system” means a system which— (a) consists (wholly or mainly) of high voltage lines and electrical plant, and (b) is used for conveying electricity from a generating station to a substation, from one generating station to another or from one substation to another.

Transmission licences

136

• (1) In section 6 of the 1989 Act (licences authorising supply etc.), in subsection (1) (kinds of licence which may be granted), for paragraph (b) substitute—

(b) a licence authorising a person to participate in the transmission of electricity for that purpose (“a transmission licence”);

.

• (2) After subsection (6) of that section insert—

(6A) A transmission licence may authorise the holder to participate in the transmission of electricity in any area, or only in an area specified in the licence. (6B) The Authority may, with the consent of the holder of a transmission licence, modify terms included in the licence in pursuance of subsection (6A) above.

• (3) In section 7 (licence conditions: general), after subsection (2) insert—

(2A) Without prejudice to the generality of paragraph (a) of subsection (1), conditions included in a transmission licence by virtue of that paragraph may— (a) require the licence holder not to carry on an activity which he would otherwise be authorised by the licence to carry on, or (b) restrict where he may carry on an activity which he is authorised by the licence to carry on.

New standard conditions for transmission licences

137

• (1) If the Secretary of State considers it necessary or expedient to do so for the purpose of implementing the new trading and transmission arrangements, he may determine new standard conditions in relation to transmission licences.

• (2) The Secretary of State shall publish any conditions determined under subsection (1) in such manner as he considers appropriate.

• (3) Conditions published in accordance with subsection (2) shall be standard conditions for the purposes of transmission licences, subject to any modifications of the standard conditions for the purposes of licences of that type made—

• (za) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (a) under Part 1 of the 1989 Act, or

• (b) under this Act , ...

• (f) under the Energy Act 2013, or

• (g) under the Nuclear Energy (Financing) Act 2022,

after the determination under subsection (1).

• (4) The standard conditions for the purposes of transmission licences may contain provision—

• (a) for any standard condition included in a transmission licence not to have effect until brought into operation in such manner, and in such circumstances, as may be specified in, or determined under, the standard conditions;

• (b) for the effect of any standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined;

• (c) for any standard condition included in such a licence which is suspended to be brought back into operation in such manner, and in such circumstances, as may be so specified or determined.

• (5) In section 8A of the 1989 Act (standard conditions of licences), in subsection (1) (incorporation in future licences of conditions which are standard conditions by virtue of section 33(1) of the Utilities Act 2000 (c. 27)), for the words from “section 6(1)” to “supply licences)” substitute “ section 6(1)(a), (c) or (d) (that is to say, generation licences, distribution licences or supply licences) ”.

• (6) In that section, after subsection (1) insert—

(1A) Subject to subsection (2), each condition which by virtue of section 137(3) of the Energy Act 2004 is a standard condition for the purposes of transmission licences shall be incorporated by reference in each transmission licence granted on or after the day on which section 137(6) of that Act comes into force.

• (7) The power under subsection (1) may not be exercised—

• (a) after the end of the period of eighteen months beginning with the day on which that subsection comes into force, or

• (b) on or after the day on which subsections (5) and (6) come into force.

Conversion of existing transmission licences

138

Schedule 17 (which makes provision for a licensing scheme in relation to existing transmission licences) has effect.

Grant of transmission licences

139

• (1) If the Secretary of State considers it necessary or expedient to do so for the purpose of implementing the new trading and transmission arrangements, he may by direction—

• (a) require GEMA to grant a transmission licence to such person, and on such terms and subject to such conditions, as the direction may provide;

• (b) require GEMA to refuse an application for a transmission licence.

• (2) The Secretary of State shall consult GEMA before issuing a direction under subsection (1).

• (3) Subsection (2) may be satisfied by consultation before, as well as by consultation after, the commencement of this section.

• (4) The powers under subsection (1) may not be exercised after the end of the period of eighteen months beginning with the day on which that subsection comes into force.

• (5) The power under subsection (1)(a) may only be exercised on one occasion and then only to require the grant of a single licence.

• (6) The power under subsection (1)(b) may not be exercised once the power under subsection (1)(a) has been exercised.

Duties to provide information etc. to Secretary of State

140

• (1) If GEMA receives an application for a transmission licence at a time when the power under section 139(1)(b) is exercisable, it shall as soon as practicable send a copy of the application to the Secretary of State.

• (2) GEMA shall provide the Secretary of State with all such information as he may require for the purposes of or in connection with the carrying-out of any of his functions under this Chapter.

• (3) Each holder of a licence under section 6 of the 1989 Act shall provide the Secretary of State with all such information and other assistance as he may require for the purposes of or in connection with the carrying-out of any of his functions under this Chapter.

• (4) Section 105(1) of the Utilities Act 2000 (c. 27) (general restrictions on disclosure of information) does not apply to a disclosure made in pursuance of this section.

Property arrangements schemes

141

Schedule 18 (which makes provision about property arrangements schemes) has effect.

Interpretation of Chapter 1 of Part 3

142

In this Chapter—

• “transmission licence” means a licence under section 6(1)(b) of the 1989 Act;

and references to the new trading and transmission arrangements are to be construed in accordance with section 133.

Amendments consequential on Chapter 1 of Part 3

143

• (1) Schedule 19 (which makes amendments consequential on the provisions of this Chapter) has effect.

• (2) Where the effect of—

• (a) a modification under section 134, or

• (b) a scheme under Schedule 17,

is to reduce in any respect the area in which the holder of a transmission licence may carry on activities, Schedule 4 to the 1989 Act shall have effect in relation to him as if any reference to the activities which he is authorised by his licence to carry on included a reference to the activities which he was previously so authorised to carry on.

Transition

144

The Secretary of State may by order make in connection with the coming into force of any provision of this Chapter such transitional provision or saving as he considers necessary or expedient.

Chapter 2 — Interconnectors for electricity and gas

Electricity interconnectors

Operators of electricity interconnectors to be licensed

145

• (1) The 1989 Act is amended as follows.

• (2) In subsection (1) of section 4 (licensable activities), at the end of paragraph (c) insert

or (d) participates in the operation of an electricity interconnector,

.

• (3) Before subsection (4) of that section insert—

(3C) A reference in this Part to participating in the operation of an electricity interconnector is a reference to— (a) co-ordinating and directing the flow of electricity into or through an electricity interconnector; or (b) making such an interconnector available for use for the conveyance of electricity; and a person is not to be regarded as participating in the transmission of electricity by reason only of activities constituting participation in the operation of an electricity interconnector. (3D) For the purposes of subsection (3C)(b), a person shall not be regarded as making something available just because he consents to its being made available by another. (3E) In this Part “electricity interconnector” means so much of an electric line or other electrical plant as— (a) is situated at a place within the jurisdiction of Great Britain; and (b) subsists wholly or primarily for the purposes of the conveyance of electricity (whether in both directions or in only one) between Great Britain and a place within the jurisdiction of another country or territory. (3F) For the purposes of this section— (a) a place is within the jurisdiction of Great Britain if it is in Great Britain, in the territorial sea adjacent to Great Britain or in an area designated under section 1(7) of the Continental Shelf Act 1964; and (b) a place is within the jurisdiction of another country or territory if it is in that country or territory or in waters in relation to which authorities of that country or territory exercise jurisdiction.

• (4) In section 5(1) (power of the Secretary of State to grant exemptions from licensing), for “or (c)” substitute “ , (c) or (d) ”.

• (5) In section 6 (power to grant licences), after subsection (1)(d) insert

or (e) a licence authorising a person to participate in the operation of an electricity interconnector (“an interconnector licence”).

• (6) After subsection (2) of that section insert—

(2A) The same person may not be the holder of an interconnector licence and the holder of a licence falling within any of paragraphs (a) to (d) of subsection (1).

• (7) Before subsection (7) of that section insert—

(6C) An interconnector licence authorising participation in the operation of an electricity interconnector— (a) must specify the interconnector or interconnectors in relation to which participation is authorised; and (b) may limit the forms of participation in the operation of an interconnector which are authorised by the licence.

Standard conditions for electricity interconnectors

146

• (1) The Secretary of State must, before the commencement of subsection (6), determine standard conditions for electricity interconnector licences.

• (2) Those standard conditions may contain provision—

• (a) for a standard condition included in an electricity interconnector licence not to have effect until brought into operation in such manner, and in such circumstances, as may be specified in or determined under the standard conditions;

• (b) for the effect of a standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined; or

• (c) for a standard condition included in such a licence the effect of which is for the time being suspended to be brought back into operation in such manner, and in such circumstances, as may be so specified or determined.

• (3) The Secretary of State must publish the standard conditions determined by him under this section.

• (4) The publication must be in such manner as the Secretary of State considers appropriate.

• (5) The standard conditions determined by the Secretary of State have effect subject to any modifications made... under Part 1 of the 1989 Act , under this Act , under section 98 of the Energy Act 2011 or under section 37 or 45 of the Energy Act 2013.

• (6) Before subsection (2) of section 8A of the 1989 Act (standard conditions) insert—

(1B) Subject to subsection (2), each condition which by virtue of section 146 of the Energy Act 2004 is a standard condition for the purposes of interconnector licences shall be incorporated, by reference, in each interconnector licence granted on or after the commencement of subsection (6) of that section.

• (7) In this section “electricity interconnector licence” means an interconnector licence under section 6(1)(e) of the 1989 Act.

Consequential amendments of the 1989 Act

147

• (1) The 1989 Act is amended as follows.

• (2) In section 3A—

• (a) in subsection (1) (principal objective of GEMA in relation to electricity), at the end insert “ or the provision or use of electricity interconnectors ”; and

• (b) in subsection (5)(a) (duty as to carrying out of functions), after “electricity”, where first occurring, insert “ or to participate in the operation of electricity interconnectors ”.

• (3) In section 29 (regulations)—

• (a) in subsection (1)(b), after “electricity”, where first occurring, insert “ from the use of electricity interconnectors, ”;

• (b) in subsection (2)(b), after “electricity” insert “ or in the use of electricity interconnectors ”;

• (c) in subsection (2)(c), after “electricity” insert “ or to participate in the operation of an electricity interconnector ”.

• (4) In section 30(2)(a) (duty of inspector to inspect apparatus belonging to licence holders), after “electricity” insert “ or to participate in the operation of electricity interconnectors ”.

• (5) In section 43 (concurrent functions of GEMA and the OFT under the Enterprise Act 2002), in each of subsections (2A) and (3), after “electricity” insert “ or the use of electricity interconnectors ”.

• (6) In section 58(2) (information protected by directions), after “electricity” insert “ or to participate in the operation of electricity interconnectors ”.

• (7) In section 64(1) (interpretation), after the definitions of “electricity distributor” and “electricity supplier” insert—

“electricity interconnector” has the meaning given by section 4(3E);

.

• (8) In section 98(1) (statistical information)—

• (a) after “electricity”, where first occurring, insert “ or the use of electricity interconnectors ”; and

• (b) at the end insert “ or to participate in the operation of electricity interconnectors ”.

Grant of electricity interconnector licences to existing operators

148

• (1) This section applies where a person is participating in the operation of an electricity interconnector at the time when the power of GEMA to grant electricity interconnector licences comes into force.

• (2) The Secretary of State shall have power to grant such a licence to that person under section 6 of the 1989 Act.

• (3) Sections 6A(5), 7 and 8A of the 1989 Act (notice of licence and licence conditions) shall have effect in relation to the grant of licences by the Secretary of State by virtue of this section as if—

• (a) references in those sections to GEMA included references to the Secretary of State; and

• (b) in section 8A, the words “the Secretary of State and” in subsection (4)(b) and subsection (5) were omitted.

• (4) Before granting a licence to a person by virtue of this section, the Secretary of State must consult—

• (a) that person;

• (b) GEMA; and

• (c) such other persons as the Secretary of State considers appropriate.

• (5) Subsection (4) may be satisfied by consultation that took place wholly or partly before the commencement of this section.

• (6) In this section—

• “electricity interconnector licence” means an interconnector licence under section 6(1)(e) of the 1989 Act; and

• “participating in the operation of an electricity interconnector” has the same meaning as in Part 1 of the 1989 Act.

Gas interconnectors

Operators of gas interconnectors to be licensed

149

• (1) The Gas Act 1986 (c. 44) is amended as follows.

• (2) In subsection (1) of section 5 (prohibition on unlicensed activities)—

• (a) in paragraph (a), at the beginning insert “ otherwise than by means of a gas interconnector ”; and

• (b) after that paragraph insert—

(aa) participates in the operation of a gas interconnector;

.

• (3) After subsection (5) of that section insert—

(6) A reference in this Part to participating in the operation of a gas interconnector is a reference to— (a) co-ordinating and directing the conveyance of gas into or through a gas interconnector; or (b) making such an interconnector available for use for the conveyance of gas. (7) For the purposes of subsection (6)(b) a person shall not be regarded as making something available just because he consents to its being made available by another. (8) In this Part “gas interconnector” means so much of any pipeline system as— (a) is situated at a place within the jurisdiction of Great Britain; and (b) subsists wholly or primarily for the purposes of the conveyance of gas (whether in both directions or in only one) between Great Britain and another country or territory. (9) For the purposes of this section a place is within the jurisdiction of Great Britain if it is in Great Britain, in the territorial sea adjacent to Great Britain or in an area designated under section 1(7) of the Continental Shelf Act 1964. (10) In this section “pipe-line system” includes the pipes and any associated apparatus comprised in that system.

• (4) In section 6A(1) (power of the Secretary of State to grant exemptions from licensing), after “paragraph (a)” insert “ , (aa) ”.

• (5) In section 7(3) (no licence may be issued to holder of licence under section 7A), after “under section” insert “ 7ZA or ”.

• (6) After section 7 insert—

(7ZA) (1) Subject to subsection (2), the Authority may grant a licence authorising any person to participate in the operation of a gas interconnector. (2) A licence shall not be granted under this section to a person who is the holder of a licence under section 7 or 7A. (3) A licence under this section— (a) must specify the interconnector or interconnectors in relation to which participation is authorised; and (b) may limit the forms of participation in the operation of an interconnector which are authorised by the licence.

• (7) In section 7A(3) (no licence may be issued to holder of licence under section 7), after “section 7” insert “ or 7ZA ”.

• (8) In—

• (a) the definitions of “licence” in sections 4AA(8) and 48(1), and

• (b) section 36(1) and (2)(d),

after “section 7” insert “ , 7ZA ”.

• (9) In section 24(1A)(a) (references to the Competition Commission for licence modifications), after sub-paragraph (i) insert—

(ia) licences under section 7ZA above,

.

• (10) In section 41C(4) (addition of activities to prohibited activities), after paragraph (a) insert—

(aa) participation in the operation of a gas interconnector;

.

• (11) In section 48(1) (interpretation) after the definition of “gas fittings” insert—

“gas interconnector” has the meaning given by section 5(8);

.

Standard conditions for gas interconnectors

150

• (1) The Secretary of State must, before the commencement of subsection (6) of this section, determine standard conditions for licences under section 7ZA of the Gas Act 1986 (c. 44).

• (2) Those standard conditions may contain provision—

• (a) for a standard condition included in a licence under section 7ZA of the Gas Act 1986 not to have effect until brought into operation in such manner, and in such circumstances, as may be specified in or determined under the standard conditions;

• (b) for the effect of a standard condition included in such a licence to be suspended in such manner, and in such circumstances, as may be so specified or determined; or

• (c) for a standard condition included in such a licence the effect of which is for the time being suspended to be brought back into operation in such manner, and in such circumstances, as may be so specified or determined.

• (3) The Secretary of State must publish the standard conditions determined by him under this section.

• (4) The publication must be in such manner as the Secretary of State considers appropriate.

• (5) The standard conditions determined by the Secretary of State have effect subject to any modifications made... under Part 1 of the Gas Act 1986 (c. 44) , under this Act or under section 98 of the Energy Act 2011.

• (6) In subsection (1) of section 8 of that Act (standard conditions)—

• (a) after “2000” insert “ or section 150 of the Energy Act 2004 ”; and

• (b) after paragraph (a) insert—

(aa) licences under section 7ZA above;

.

• (7) After subsection (6) of that section insert—

(6A) The Authority shall not make any modifications under subsection (3) above of a condition of a licence under section 7ZA unless it is of the opinion that the modifications are such that— (a) the licence holder would not be unduly disadvantaged in competing with one or more other holders of licences under that section; and (b) no other holder of a licence under that section would be unduly disadvantaged in competing with the holder of the licence to be modified or with any one or more other holders of licences under that section.

• (8) In sections 23(1)(b) and (2), 26(1A) and 27(1)(b) and (2) of that Act (which relate to the modification of standard conditions), after “licences under section 7 above” insert “ , licences under section 7ZA above ”.

• (9) In sections 23(11) and 26(5) of that Act (which require the publication of modifications of standard conditions), after “section 7” insert “ , 7ZA ”.

• (10) In section 26A(9) of that Act (which also relates to the modification of such conditions), after “section 7” insert “ or section 7ZA ”.

Disapplication of existing regimes

151

• (1) In each of sections 9(1A) and 9A(1A) of the Pipe-lines Act 1962 (c. 58) (pipe-lines to which provision for construction of additional pipe-lines do not apply), for “neither upstream petroleum pipe-lines nor gas pipe-lines” substitute “ not an upstream petroleum pipe-line, a gas pipe-line or a gas interconnector ”.

• (2) In section 10(1)(b)(ii) of that Act (pipe-lines excluded from provisions for securing use of pipelines), for “is not” substitute “ is neither comprised in a gas interconnector nor ”.

• (3) The following provisions of that Act shall cease to have effect—

• (a) section 10B (cases to which section 10C applies);

• (b) in section 10C(1) the words “to which this section applies (a “relevant gas pipe-line”)”; and

• (c) in section 10C(2) to (11), the word “relevant” wherever occurring.

• (4) In section 66(1) of that Act (interpretation)—

• (a) for the definition of “gas pipe-line” substitute—

“gas pipe-line” means a pipe-line used to convey gas to premises, or to a pipe-line system operated by a gas transporter (within the meaning of Part 1 of the Gas Act 1986), which— (a) is a pipe-line in respect of which an exemption has been granted by or under that Act from the requirement for a gas transporter’s licence; and (b) is not comprised in an upstream petroleum pipe-line;

• (b) after the definition of “gas” insert—

“gas interconnector” has the same meaning as in Part 1 of the Gas Act 1986;

• (c) in the definition of “owner”, for “10B” substitute “ 10C ”.

• (5) In the Petroleum Act 1998 (c. 17)—

• (a) in section 17(1A) (exceptions to application of provisions for acquisition of rights to use pipelines), for the words from “and” onwards substitute “ or to a gas interconnector (within the meaning of Part 1 of the Gas Act 1986). ”; and

• (b) sections 17A and 17B (special rules for interconnectors) shall cease to have effect.

Grant of gas interconnector licences to existing operators

152

• (1) This section applies where a person is participating in the operation of a gas interconnector at the time when the power of GEMA to grant licences under section 7ZA of the Gas Act 1986 (c. 44) comes into force.

• (2) The Secretary of State shall have power to grant a licence to that person under section 7ZA of the Gas Act 1986.

• (3) Sections 7B and 8 of the Gas Act 1986 (general provisions relating to licences and licence conditions) shall have effect in relation to the grant of licences by the Secretary of State by virtue of this section as if—

• (a) references in those sections to GEMA included references to the Secretary of State;

• (b) sections 7B(1), (2) and (2A) were omitted; and

• (c) in section 8, the words “the Secretary of State, to” in subsection (5)(b) and subsection (6) were omitted.

• (4) Before granting a licence to a person by virtue of this section, the Secretary of State must consult—

• (a) that person;

• (b) GEMA; and

• (c) such other persons as the Secretary of State considers appropriate.

• (5) Subsection (4) may be satisfied by consultation that took place wholly or partly before the commencement of this section.

• (6) In this section “participating in the operation of a gas interconnector” has the same meaning as in Part 1 of the Gas Act 1986.

Extraterritorial application of Gas Act 1986

153

After section 64 of the Gas Act 1986 (c. 44) insert—

(64A) (1) Where by virtue of this Act an act or omission taking place outside Great Britain constitutes an offence, proceedings for the offence may be taken, and the offence may for all incidental purposes be treated as having been committed, in any place in Great Britain. (2) Provision made by or under this Act in relation to places outside Great Britain— (a) so far as it applies to individuals, applies to them whether or not they are British citizens; and (b) so far as it applies to bodies corporate, applies to them whether or not they are incorporated under the law of a part of the United Kingdom.

Chapter 3 — Special administration regime for energy licensees

Energy administration orders

Energy administration orders

154

• (1) In this Chapter “energy administration order” means an order which—

• (a) is made by the court in relation to a protected energy company; and

• (b) directs that, while the order is in force, the affairs, business and property of the company are to be managed by a person appointed by the court.

• (2) The person appointed in relation to a company for the purposes of an energy administration order is referred to in this Chapter as the energy administrator of the company.

• (3) The energy administrator of a company must manage its affairs, business and property, and exercise and perform all his powers and duties as such, so as to achieve the objective set out in —

• (a) section 155(1), and

• (b) section 155(9) (if and to the extent that section 155(9) applies in relation to the company).

• (4) In relation to an energy administration order applying to a non-GB company, references in this section to the affairs, business and property of the company are references only to its affairs and business so far as carried on in Great Britain and to its property in Great Britain.

• (5) In this Chapter—

• “protected energy company” means a company which is the holder of a relevant licence; and

• “relevant licence” means—a licence granted under section 6(1)(b) or (c) of the 1989 Act (transmission and distribution licences for electricity); ora licence granted under section 7 of the Gas Act 1986 (licensing of gas transporters).

Objective of an energy administration

155

• (1) The objective of an energy administration is to secure—

• (a) that the company’s system is and continues to be maintained and developed as an efficient and economical system; and

• (b) that it becomes unnecessary, by one or both of the following means, for the energy administration order to remain in force for that purpose.

• (2) Those means are—

• (a) the rescue as a going concern of the company subject to the energy administration order; and

• (b) transfers falling within subsection (3).

• (3) A transfer falls within this subsection if it is a transfer as a going concern—

• (a) to another company, or

• (b) as respects different parts of the undertaking of the company subject to the energy administration order, to two or more different companies,

of so much of that undertaking as it is appropriate to transfer for the purpose of achieving the objective of the energy administration.

• (4) The means by which transfers falling within subsection (3) may be effected include, in particular—

• (a) a transfer of the undertaking of the company subject to the energy administration order, or of a part of its undertaking, to a wholly-owned subsidiary of that company; and

• (b) a transfer to a company of securities of a wholly-owned subsidiary to which there has been a transfer falling within paragraph (a).

• (5) The objective of an energy administration may be achieved by transfers falling within subsection (3) to the extent only that—

• (a) the rescue as a going concern of the company subject to the energy administration order is not reasonably practicable or is not reasonably practicable without such transfers;

• (b) the rescue of that company as a going concern will not achieve that objective or will not do so without such transfers;

• (c) such transfers would produce a result for the company’s creditors as a whole that is better than the result that would be produced without them; or

• (d) such transfers would, without prejudicing the interests of those creditors as a whole, produce a result for the company’s members as a whole that is better than the result that would be produced without them.

• (6) In this section “the company’s system”, in relation to an energy administration, means—

• (a) the system of electricity distribution or of electricity transmission, or

• (b) the pipe-line system for the conveyance of gas,

which the company subject to the energy administration order has been maintaining as the holder of a relevant licence.

• (7) In this section “efficient and economical”, in relation to a system for electricity distribution or electricity transmission, includes co-ordinated.

• (8) Subsection (9) applies if the company in relation to which an energy administration order is made has functions conferred by or by virtue of—

• (a) Chapter 2, 3 or 4 of Part 2 of the Energy Act 2013, or

• (b) an order made under section 46 of that Act (power of Secretary of State to transfer certain functions).

• (9) The objective of an energy administration (in addition to the objective mentioned in subsection (1)) is to secure—

• (a) that those functions are and continue to be carried out in an efficient and effective manner; and

• (b) that it becomes unnecessary, by one or both of the means mentioned in subsection (2), for the energy administration order to remain in force for that purpose.

• (10) The duty under section 154(3), so far as it relates to the objective mentioned in subsection (9)—

• (a) applies only to the extent that securing that objective is not inconsistent with securing the objective mentioned in subsection (1);

• (b) ceases to apply in respect of any function of a company if an order is made under section 46 of the Energy Act 2013 as a result of which the function is transferred from that company to another person.

Applications for energy administration orders

156

• (1) An application for an energy administration order in relation to a company may be made only—

• (a) by the Secretary of State; or

• (b) with the consent of the Secretary of State, by GEMA.

• (2) The applicant for an energy administration order in relation to a company must give notice of the application to—

• (a) every person who has appointed an administrative receiver of the company;

• (b) every person who is or may be entitled to appoint an administrative receiver of the company;

• (c) every person who is or may be entitled to make an appointment in relation to the company under paragraph 14 of Schedule B1 to the 1986 Act (appointment of administrators by holders of floating charges); and

• (d) such other persons as may be prescribed by energy administration rules.

• (3) The notice must be given as soon as reasonably practicable after the making of the application.

• (4) In this section “administrative receiver” means—

• (a) an administrative receiver within the meaning given by section 251 of the 1986 Act for the purposes of Parts 1 to 7 of that Act; or

• (b) a person whose functions in relation to a non-GB company—

• (i) are equivalent to those of an administrative receiver; and

• (ii) relate only to the affairs and business of the company so far as carried on in Great Britain and to its property in Great Britain.

Powers of court

157

• (1) On hearing an application for an energy administration order, the court has the following powers—

• (a) it may make the order;

• (b) it may dismiss the application;

• (c) it may adjourn the hearing conditionally or unconditionally;

• (d) it may make an interim order;

• (e) it may treat the application as a winding-up petition and make any order the court could make under section 125 of the 1986 Act (power of court on hearing winding-up petition);

• (f) it may make any other order which the court thinks appropriate.

• (2) The court may make an energy administration order in relation to a company only if it is satisfied—

• (a) that the company is unable to pay its debts;

• (b) that it is likely to be unable to pay its debts; or

• (c) that, on a petition by the Secretary of State under section 124A of the 1986 Act (petition for winding up on grounds of public interest), it would be just and equitable (disregarding the objective of the energy administration) to wind up the company in the public interest.

• (3) The court must not make an energy administration order in relation to a company on the ground set out in subsection (2)(c) unless the Secretary of State has certified to the court that the case is one in which he considers (disregarding the objective of the energy administration) that it would be appropriate for him to petition under section 124A of the 1986 Act.

• (4) The court has no power to make an energy administration order in relation to a company which—

• (a) is in administration under Schedule B1 to the 1986 Act; or

• (b) has gone into liquidation (within the meaning of section 247(2) of that Act).

• (5) An energy administration order comes into force—

• (a) at the time appointed by the court; or

• (b) if no time is so appointed, when the order is made.

• (6) An interim order under subsection (1)(d) may, in particular—

• (a) restrict the exercise of a power of the company or of its directors; or

• (b) make provision conferring a discretion on a person qualified to act as an insolvency practitioner in relation to the company.

• (7) Where the company in relation to which an application is made is a non-GB company, the reference in subsection (6)(a) to restricting the exercise of a power of the company or of its directors is a reference only to restricting the exercise of such a power—

• (a) within Great Britain; or

• (b) in relation to the company’s affairs or business so far as carried on in Great Britain, or to its property in Great Britain.

• (8) For the purposes of this section a company is unable to pay its debts if—

• (a) it is a company which is deemed to be so unable under section 123 of the 1986 Act (definition of inability to pay debts); or

• (b) it is an unregistered company which is deemed, by virtue of any of sections 222 to 224 of that Act, to be so unable for the purposes of section 221 of that Act (winding-up of unregistered companies), or which would be so deemed if it were an unregistered company for the purposes of those sections.

Energy administrators

158

• (1) The energy administrator of a company—

• (a) is an officer of the court; and

• (b) in exercising and performing his powers and duties in relation to the company, is the company’s agent.

• (2) The management by the energy administrator of a company of any affairs, business or property of the company must be carried out for the purpose of achieving the objective of the energy administration as quickly and as efficiently as is reasonably practicable.

• (3) The energy administrator of a company must exercise and perform his powers and duties in the manner which, so far as it is consistent with the objective of the energy administration to do so, best protects—

• (a) the interests of the creditors of the company as a whole; and

• (b) subject to those interests, the interests of the members of the company as a whole.

• (4) A person is not to be the energy administrator of a company unless he is a person qualified to act as an insolvency practitioner in relation to the company.

• (5) Where the court makes an appointment in a case in which two or more persons will be the energy administrator of a company after the appointment, the appointment must set out—

• (a) which (if any) of the powers and duties of an energy administrator are to be exercisable or performed only by those persons acting jointly;

• (b) the circumstances (if any) in which powers and duties of an energy administrator are to be exercisable, or may be performed, by one of the persons appointed to be the energy administrator, or by particular appointees, acting alone; and

• (c) the circumstances (if any) in which things done in relation to one of the persons appointed to be the energy administrator, or in relation to particular appointees, are to be treated as done in relation to all of them.

Conduct of administration, transfer schemes etc.

159

• (1) Schedule 20 (which applies the provisions of Schedule B1 to the 1986 Act about ordinary administration orders and certain other enactments to energy administration orders) has effect.

• (2) Schedule 21 (which makes provision for transfer schemes to achieve the objective of an energy administration) has effect.

• (3) The power to make rules conferred by section 411 of the 1986 Act (company insolvency rules) shall apply for the purpose of giving effect to this Chapter as it applies for the purpose of giving effect to Parts 1 to 7 of that Act and, accordingly, as if references in that section to those Parts included references to this Chapter (including this Chapter as applied by section 96 of the Energy Act 2011 , section 4 of the Smart Meters Act 2018 , section 33 of the Nuclear Energy (Financing) Act 2022 or section 44 of the Energy Act 2023).

Restrictions on other insolvency procedures

Restrictions on winding-up orders

160

• (1) This section applies where a petition for the winding-up of a protected energy company is presented by a person other than the Secretary of State.

• (2) The court is not to exercise its powers on a winding-up petition unless—

• (a) notice of the petition has been served both on the Secretary of State and on GEMA; and

• (b) a period of at least fourteen days has elapsed since the service of the last of those notices to be served.

• (3) If an application for an energy administration order in relation to the company is made to the court in accordance with section 156(1) before a winding-up order is made on the petition, the court may exercise its powers under section 157, instead of exercising its powers on a winding-up petition.

• (4) References in this section to the court’s powers on a winding-up petition are references to—

• (a) its powers under section 125 of the 1986 Act (other than its power of adjournment); and

• (b) its powers under section 135 of that Act.

Restrictions on voluntary winding up

161

• (1) A protected energy company has no power to pass a resolution for voluntary winding up without the permission of the court.

• (2) Such permission may be granted only on an application made by the company.

• (3) The court is not to grant permission on such an application unless—

• (a) notice of the application has been served both on the Secretary of State and on GEMA; and

• (b) a period of at least fourteen days has elapsed since the service of the last of those notices to be served.

• (4) If an application for an energy administration order in relation to the company is made to the court in accordance with section 156(1) after an application for permission under this section has been made and before it is granted, the court may exercise its powers under section 157, instead of granting permission.

• (5) In this section “a resolution for voluntary winding up” has the same meaning as in the 1986 Act.

Restrictions on making of ordinary administration orders

162

• (1) This section applies where an ordinary administration application is made in relation to a protected energy company by a person other than the Secretary of State.

• (2) The court must dismiss the application if—

• (a) an energy administration order is in force in relation to the company; or

• (b) an energy administration order has been made in relation to the company but is not yet in force.

• (3) Where subsection (2) does not apply, the court, on hearing the application, must not exercise its powers under paragraph 13 of Schedule B1 to the 1986 Act (other than its power of adjournment) unless—

• (a) notice of the application has been served both on the Secretary of State and on GEMA;

• (b) a period of at least fourteen days has elapsed since the service of the last of those notices to be served; and

• (c) there is no application for an energy administration order that is outstanding.

• (4) Paragraph 44 of Schedule B1 to the 1986 Act (interim moratorium) does not prevent, or require the permission of the court for, the making of an application for an energy administration order.

• (5) Upon the making of an energy administration order in relation to a protected energy company, the court must dismiss any ordinary administration application made in relation to that company which is outstanding.

• (6) In this section “ordinary administration application” means an application in accordance with paragraph 12 of Schedule B1 to the 1986 Act.

Restrictions on administrator appointments by creditors etc.

163

• (1) No step is to be taken by any person to make an appointment in relation to a company under paragraph 14 or 22 of Schedule B1 to the 1986 Act (powers of holder of floating charge and of the company itself and of its directors to appoint administrators) if—

• (a) an energy administration order is in force in relation to the company;

• (b) an energy administration order has been made in relation to the company but is not yet in force; or

• (c) an application for such an order is outstanding.

• (2) In the case of a protected energy company to which subsection (1) does not apply, an appointment in relation to that company under paragraph 14 or 22 of Schedule B1 to the 1986 Act takes effect only if each of the conditions mentioned in subsection (3) is met.

• (3) Those conditions are—

• (a) that a copy of every document in relation to the appointment that is filed or lodged with the court in accordance with paragraph 18 or 29 of Schedule B1 to the 1986 Act (documents to be filed or lodged for appointment of administrator) has been served both on the Secretary of State and on GEMA;

• (b) that a period of fourteen days has elapsed since the service of the last of those copies to be served;

• (c) that there is no outstanding application to the court for an energy administration order in relation to the company in question; and

• (d) that the making of an application for such an order has not resulted in the making of an energy administration order which is in force or is still to come into force.

• (4) Paragraph 44 of Schedule B1 to the 1986 Act (interim moratorium) does not prevent, or require the permission of the court for, the making of an application for an energy administration order at any time before the appointment takes effect.

Restrictions on enforcement of security

164

• (1) No step to enforce a security over property of a protected energy company is to be taken by any person, unless—

• (a) notice of his intention to do so has been served both on the Secretary of State and on GEMA; and

• (b) a period of at least fourteen days has elapsed since the service of the last of those notices to be served.

• (2) In the case of a protected energy company which is a non-GB company, the reference in subsection (1) to the property of the company is a reference only to its property in Great Britain.

Financial support for companies in administration

Grants and loans

165

• (1) This section applies where an energy administration order has been made in relation to a company.

• (2) The Secretary of State may make grants or loans to the company of such amounts as it appears to him appropriate to pay or lend for achieving the objective of the energy administration.

• (3) A grant or loan under this section may be made in whatever manner, and on whatever terms, the Secretary of State considers appropriate.

• (4) The terms on which a grant may be made under this section include, in particular, terms requiring the whole or a part of the grant to be repaid to the Secretary of State if there is a contravention of the other terms on which the grant is made.

• (5) The terms on which a loan may be made under this section include, in particular, terms requiring—

• (a) the loan to be repaid at such times and by such methods, and

• (b) interest to be paid on the loan at such rates and at such times,

as the Secretary of State may from time to time direct.

• (6) The consent of the Treasury is required—

• (a) for the making of a grant or loan under this section; and

• (b) for the giving by the Secretary of State of a direction under subsection (5).

• (7) The Secretary of State must pay sums received by him by virtue of this section into the Consolidated Fund.

Indemnities

166