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Energy Act 2010

Commentary on Sections

Electricity supply levy
Section 4: Electricity supply levy

26.This section gives the Secretary of State the power to make regulations that place a levy on electricity supplies, to be paid by electricity suppliers, based on the provision of financial assistance for CCS demonstration projects and for additional CCS use at those projects (subsections (1) and (2)).

27.Subsections (3) and (4) provide flexibility in the charging of the levy. Under subsection (3), the Secretary of State can make regulations so that the levy varies in different cases; this might be used, for example, to set different rates for different classes of energy suppliers. Subsection (4) allows provision to be made to exempt certain types of electricity supplies from the levy (for example, based on who the consumer of the electricity will be).

28.Subsection (5) provides a non-exhaustive list of matters about which the regulations may make provision, including:

  • what constitutes, for the purposes of the levy, an electricity supply and an electricity supplier;

  • the payment of the levy, including the payment of interest in respect of late payments;

  • enforcement of payment of the levy, including through the imposition of civil penalties;

  • the general arrangements for the administration of the levy;

  • requirements for the provision, and audit, of information by suppliers;

  • insolvency of persons liable to pay the levy (which would enable provision to be made to ensure that there is no shortfall in the funds raised in the event a supplier becomes insolvent); and

  • the establishment of a review and/or appeals process for resolving disputes.

29.Before making regulations regarding the levy, subsection (6) places a requirement on the Secretary of State to consult the administrator of the levy mechanism and any other person that the Secretary of State thinks appropriate. This consultation may occur before or after commencement of this power.

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