Overview
3.The Act covers three main areas: the civil nuclear industry; sustainability and renewable energy sources; and energy markets and regulation. It implements commitments made in the Government’s White Papers “Our energy future: creating a low carbon economy” (Cm. 5761, February 2003) and “Managing the Nuclear Legacy – A Strategy for Action” (Cm. 5552, July 2002). The latter set out the Government’s plans for improving the management of public sector civil nuclear liabilities, in particular through the establishment of the Nuclear Decommissioning Authority (“NDA”). It also outlined plans for the restructuring of British Nuclear Fuels plc (“BNFL”) as part of new arrangements for funding the decommissioning and clean up of the public sector civil nuclear legacy.
4.The Act will also create a single wholesale electricity market for Britain, the British Electricity Trading and Transmission Arrangements (“BETTA”). Provisions covering electricity and gas interconnectors implement a number of requirements in the EU’s 2003 Gas and Electricity Directives and its Electricity Regulation.
5.The Act is in four parts with 23 Schedules. The main provisions of the Act:
Part 1: The Civil Nuclear Industry
establish the NDA as a new public body with the primary role of ensuring the decommissioning and clean-up of Britain’s civil public sector nuclear sites;
create a new Civil Nuclear Police Authority to oversee a reconstituted nuclear constabulary (the present United Kingdom Atomic Energy Authority (“UKAEA”) Constabulary), directly accountable to the Secretary of State;
amend the Anti-terrorism, Crime and Security Act 2001 (c.24) to extend the regulation of the security of uranium enrichment technologies and sensitive nuclear information;
provide statutory authority for the Secretary of State to spend money under his options to acquire British Energy’s power stations and/or its stake in Nirex. Nirex is a company owned by the major nuclear industry waste producers and tasked with investigating feasibility of a deep intermediate and low level waste disposal facility. The Secretary of State’s options arise as part of the restructuring agreements in respect of British Energy;
Part 2: Sustainability and Renewable Energy Sources
amend the Sustainable Energy Act 2003 (c.30) to require the Government to publish information about the development and bringing into use of new energy sources, actions taken to ensure that the requisite scientific and engineering expertise is available to develop new energy sources, and actions taken to achieve the statutory energy efficiency aim or aims designated under sections 2 and 3 of the Sustainable Energy Act. This information will be published as part of the annual report required under section 1 of the Sustainable Energy Act 2003;
provide for publication and implementation of a microgeneration strategy;
place a new duty on the Secretary of State and the Gas and Electricity Markets Authority to carry out their respective functions under Part 1 of both the Gas Act 1986 (c.44) and the Electricity Act 1989 (c.29), in a manner best calculated to contribute to the achievement of sustainable development;
establish a comprehensive legal framework to support renewable energy developments beyond territorial waters and augment the regime for inshore waters;
provide the Secretary of State with a power to specify shorter obligation periods under the Renewables Obligation, impose surcharges to be made on late payments to the Renewables buy-out fund and to require mutualisation payments from electricity suppliers to cover a shortfall in the buy-out fund;
make provision regarding the mutual recognition of Northern Ireland and UK Renewables Obligation Certificates;
make provision regarding the issue of Renewables Obligation Certificates in respect of electricity generated from renewable sources outside Northern Ireland and supplied to customers in Northern Ireland;
enable the Secretary of State to introduce a renewable transport fuel obligation;
Part 3: Energy Regulation
create a single wholesale electricity market for Great Britain;
introduce a new licensing regime for gas and electricity interconnectors to enable the Gas and Electricity Markets Authority (“GEMA”) to regulate their operation;
create a special administration regime for gas transportation and electricity transmission and distribution companies facing actual or threatened insolvency;
place a duty on the Secretary of State to publish an annual report on the security of energy supplies and lay that report before Parliament;
establish a mechanism allowing energy market participants to appeal GEMA’s decisions on modifications to the Codes that govern activities in the gas and electricity markets;
place a duty on the Secretary of State and GEMA to have regard to the principles of best regulatory practice in carrying out their functions under the Gas Act 1986 and the Electricity Act 1989;
amend the definition of electricity supply in the Electricity Act 1989 to include supply over a transmission line;
define “high voltage line” in respect of offshore electric lines;
create a power for GEMA (with the consent of the Secretary of State) to make regulations to extend the range of sums that can be collected from a prepayment meter;
reform the planning system for large energy projects handled by the Department for Trade and Industry (“DTI”) to enable the appointment of additional inspectors to speed up public inquiries;
amend the Electricity Act 1989 and the Gas Act 1986 to allow GEMA, when entering information on registers it is required to maintain under section 49 of the Electricity Act 1989 and section 36 of the Gas Act 1986, to exclude details in certain circumstances;
create a power for the Secretary of State to adjust transmission charges for renewable generators within a single area that can be shown to be of high renewable energy potential and where evidence would suggest that unadjusted transmission charges might have a material impact on the development of generation of electricity from renewable sources;
provide for the use of surpluses arising under the Fossil Fuel Levy in Scotland.
Part 4: Miscellaneous and Supplemental
create a fee-raising power enabling the Secretary of State to charge for specific services in relation to the exploration, production and transmission of oil and gas; the generation, transmission and distribution or supply of electricity; renewable energy zones and renewable energy installations; and the protection of the environment from these activities;
create a power to implement in domestic law certain international agreements relating to pipelines and offshore installations.
