Energy Act 2013

46 Power to transfer EMR functions E+W+S

(1) The Secretary of State may by order provide that EMR functions carried out by the national system operator are instead to be carried out by an alternative delivery body.

(2) An order under subsection (1) may be made only if—

(a) the national system operator has requested the making of the order,

(b) an energy administration order is in force in relation to the national system operator,

(c) the unsatisfactory performance condition is met (see subsection (3)),

(d) it appears to the Secretary of State necessary or desirable to make the order as a result of a change, occurring after the coming into force of this section, in the persons having control of the national system operator (see subsection (4)), or

(e) it otherwise appears to the Secretary of State necessary or desirable to make the order in connection with furthering the purposes of—

(i) encouraging low carbon electricity generation (within the meaning of Chapter 2), or

(ii) providing capacity to meet the demands of consumers for the supply of electricity in Great Britain.

(3) The unsatisfactory performance condition is met if—

(a) it appears to the Secretary of State that the national system operator has been failing to carry out its EMR functions in an efficient and effective manner,

(b) the Secretary of State has given notice in writing to the national system operator providing particulars of the failure,

(c) a period of at least 6 months has passed since the giving of the notice, and

(d) it appears to the Secretary of State that the failure so specified is continuing.

(4) “Control”, in relation to the national system operator, means the power of a person to secure—

(a) by means of the holding of shares or the possession of voting power in relation to the national system operator or any other body corporate, or

(b) as a result of any powers conferred by the articles of association or other document regulating the national system operator or any other body corporate,

that the affairs of the national system operator are conducted in accordance with the person's wishes.

(5) The Secretary of State must, subject to subsection (6), consult the national system operator before making an order under subsection (1) on the grounds mentioned in subsection (2)(e).

(6) Subsection (5) does not apply where the Secretary of State considers the urgency of the case makes it inexpedient to consult the national system operator before making the order.

(7) Where an EMR function has previously been transferred from the national system operator to an alternative delivery body by an order under subsection (1), the Secretary of State may by a further order provide that the function is instead to be carried out by—

(a) a different alternative delivery body, or

(b) the national system operator.

(8) “Alternative delivery body”, in relation to an order under subsection (1) or (7), means such person as may be specified in the order.

(9) An order under subsection (1) or (7) that specifies as the alternative delivery body a person other than the Secretary of State requires the consent of that person.

(10) An order under subsection (7) providing for EMR functions to be carried out by the national system operator requires the consent of the national system operator.

(11) In this section—

• “EMR functions” means functions conferred on the national system operator by or by virtue of Chapter 2 (contracts for difference), Chapter 3 (capacity market) or Chapter 4 (investment contracts);

• “energy administration order” has the same meaning as in Chapter 3 of Part 3 of the Energy Act 2004 (see section 154(1) of that Act);

• “national system operator” means the person operating the national transmission system for Great Britain (and for this purpose “transmission system” has the same meaning as in EA 1989 - see section 4(4) of that Act).