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Energy Act 2004

Main provisions

329.In summary, this Chapter provides for:

  • a power for the Secretary of State to amend electricity licences; to enable the implementation of a single British transmission system and a single system operator; and to allow for a single set of trading arrangements and a single set of arrangements for access to and use of the transmission system, modelled on those currently operating in England and Wales, to be extended to the whole of Britain;

  • changes to the prohibition on transmitting electricity. In simple terms this will re-define what the prohibition covers. Section 4 of the Electricity Act defined what was meant by transmitting electricity and made it illegal to undertake such activity without an appropriate licence. As a result of the proposal to introduce a single system operator for Great Britain, the Act will amend section 4 in order to ensure that the licensable transmission activity covers separate components:

  • the co-ordination and direction of the flow of electricity across the whole transmission system i.e. an activity of the transmission system operator, and

  • the making available for use for the purposes of such a transmission system of anything which forms part of it.

This reflects the fact that both the system operator and the transmission asset owners will have an important role to play in the process of transmission under the new arrangements;

  • A power for the Secretary of State to instruct GEMA to award a transmission licence;

  • Changes to the licensing powers contained in the Electricity Act to reflect the two transmission functions as outlined above;

  • Other changes to the Electricity Act consequent upon a single trading market and revised transmission arrangements;

  • A licensing scheme so that existing transmission licences will become transmission licences under the amended prohibition on transmission;

  • A scheme to enable the transfer of certain assets to the transmission system operator in order to enable it to carry out its activities effectively in the event that the transmission licence holders concerned cannot agree the need for, or aspects of, the transfer amongst themselves.

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