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(1)The Secretary of State may modify—
(a)a condition of a particular licence under section 6(1)(c) or (d) of the Electricity Act 1989 (distribution and supply licences);
(b)the standard conditions incorporated in licences under those provisions by virtue of section 8A of that Act;
(c)a document maintained in accordance with the conditions of licences under section 6(1) of that Act, or an agreement that gives effect to a document so maintained.
(2)The Secretary of State may exercise the power in subsection (1) for the purpose only of—
(a)establishing, or making arrangements for the administration of, a scheme of financial incentives to encourage small-scale low-carbon generation of electricity;
(b)requiring or enabling the holder of a distribution licence to make arrangements for the distribution of electricity generated by small-scale low-carbon generation;
(c)requiring the holder of a licence to make arrangements related to the matters mentioned in paragraph (a) or (b).
(3)Modifications made by virtue of subsection (1) may include—
(a)provision requiring the holder of a supply licence to make a payment to a small-scale low-carbon generator, or to the Authority for onward payment to such a generator, in specified circumstances;
(b)provision specifying how a payment under paragraph (a) is to be calculated;
(c)provision for the level of payment under paragraph (a) to decrease year by year in accordance with a formula published, or to be published, by the Secretary of State;
(d)provision about the circumstances in which no payment, or a reduced payment, may be made to a small-scale low-carbon generator;
(e)provision about the circumstances in which a payment may be recovered from a small-scale low-carbon generator;
(f)a requirement for the holder of a supply licence or distribution licence to pay a levy to the Authority at specified times;
(g)provision specifying how a levy under paragraph (f) is to be calculated (which may require specified matters to be determined by the Authority or the Secretary of State);
(h)provision conferring an entitlement on the holder of a supply licence or distribution licence to receive a payment from the Authority.
(4)In this section—
“” means the Gas and Electricity Markets Authority;
“distribution licence” means a licence under section 6(1)(c) of the Electricity Act 1989 (c. 29);
“owner”, in relation to any plant which is the subject of a hire purchase agreement, a conditional sale agreement or any agreement of a similar nature, means the person in possession of the plant under that agreement;
“plant” includes any equipment, apparatus or appliance;
“small-scale low-carbon generation” means the use, for the generation of electricity, of any plant—
which, in generating electricity, relies wholly or mainly on a source of energy or a technology mentioned in subsection (5), and
the capacity of which to generate electricity does not exceed the specified maximum capacity;
“small-scale low-carbon generator” means an owner of plant used or intended to be used for small-scale low-carbon generation, whether or not the person is also operating or intending to operate the plant;
“specified maximum capacity” means the capacity specified by the Secretary of State by order, which must not exceed 5 megawatts;
“supply licence” means a licence under section 6(1)(d) of the Electricity Act 1989 (c. 29).
(5)The sources of energy and technologies are—
(e)water (including waves and tides);
(i)combined heat and power systems with an electrical capacity of 50 kilowatts or less.
(6)The Secretary of State may by order modify the list of sources of energy and technologies for the time being listed in subsection (5).
(7)The power conferred by subsection (1)—
(a)may be exercised generally, only in relation to specified cases or subject to exceptions (including provision for a case to be excepted only so long as specified conditions are satisfied);
(b)may be exercised differently in different cases or circumstances;
(c)includes a power to make incidental, supplemental, consequential or transitional modifications.
(8)Provision included in a licence by virtue of that power—
(a)need not relate to the activities authorised by the licence;
(b)may make different provision for different cases.
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