PART 2Electricity Market Reform

CHAPTER 2Contracts for Difference

6Regulations to encourage low carbon electricity generation

1

The Secretary of State may for the purpose of encouraging low carbon electricity generation make regulations about contracts for difference between a CFD counterparty and an eligible generator.

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The reference in subsection (1) to encouraging low carbon electricity generation includes encouraging the continuation of, or an increase in, low carbon electricity generation by existing generating stations.

2

A contract for difference is a contract—

a

certain payments under which are to be funded by electricity suppliers (see further section 9), and

b

which a CFD counterparty is required to enter into by virtue of section 10 or 14;

and such a contract is referred to in this Chapter as a “CFD”.

3

For the purposes of this Chapter—

  • “CFD counterparty” is to be construed in accordance with section 7(2);

  • “eligible generator” is to be construed in accordance with section 10(3);

  • “low carbon electricity generation” means electricity generation which in the opinion of the Secretary of State will contribute to a reduction in emissions of greenhouse gases;

  • “regulations” means regulations under this section.

4

In subsection (3) “greenhouse gas” has the meaning given by section 92(1) of the Climate Change Act 2008.

5

The provision which may be made by regulations includes, but is not limited to, the provision described in this Chapter.

6

Regulations may—

a

include incidental, supplementary and consequential provision;

b

make transitory or transitional provision or savings;

c

make different provision for different cases or circumstances or for different purposes;

d

make provision subject to exceptions.

7

Regulations are to be made by statutory instrument.

8

An instrument containing regulations of any of the following kinds may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament (in each case, whether or not the regulations also make other provision)—

a

the first regulations which make provision falling within each of the following—

i

section 14;

ii

section 15;

iii

section 19;

iv

section 20;

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the first regulations made after the passing of the Energy Prices Act 2022 which make provision falling within each of the sections mentioned in paragraph (a);

b

regulations which make provision falling within—

i

section 9;

ii

section 10;

iii

section 12;

iv

section 13;

v

section 17;

vi

section 18;

vii

section 21;

viii

section 22;

ix

section 23.

9

Any other instrument containing regulations is subject to annulment in pursuance of a resolution of either House of Parliament.

10

If, but for this subsection, an instrument containing regulations would be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it is to proceed in that House as if it were not a hybrid instrument.