The Fossil Fuel Levy (Scotland) Regulations 1996

PART II methods of calculating hypothetical cost of purchasing or generating certain electricity

Method of calculating hypothetical cost of purchasing certain electricity

3.—(1) The method of calculating what would have been the total cost (in pounds) to each public electricity supplier P of purchasing the electricity mentioned in either paragraph 1 or paragraph 2 of this Schedule if that electricity had been generated by a fossil fuel generating station (which, when combined with the like total cost attributable to every other public electricity supplier, is expressed as By in paragraph 2 of Schedule 2) is given by the formula—

(2) In the formula specified in sub-paragraph (1) above—

• Σ_n signifies the summation over all the qualifying months within period y;

• W_n is the reference price (in pence per unit) in respect of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n, calculated in accordance with paragraph 5 except during a security period, when it shall be the price determined as the Director, after consultation with licensed suppliers, sees fit; and

• V_n is the number of units of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n.

Method of calculating hypothetical cost of generating certain electricity

4.—(1) The method of calculating what would have been the total cost (in pounds) to each public electricity supplier P of generating the electricity mentioned in either paragraph 1 or paragraph 2 of this Schedule if that electricity had been generated by a fossil fuel generating station (which, when combined with the like total cost attributable to every other public electricity supplier, is expressed as BB_y in paragraph 2 of Schedule 2) is given by the formula—

(2) In the formula specified in sub-paragraph (1) above—

• Σ_n signifies the summation over all the qualifying months within period y;

• W_n is the reference price (in pence per unit) in respect of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n, calculated in accordance with paragraph 5 except during a security period, when it shall be the price determined as the Director, after consultation with licensed suppliers, sees fit; and

• V_n is the number of units of the electricity referred to in paragraph 1 or, as the case may be, paragraph 2 of this Schedule within month n.

5.  In the formula in paragraphs 3 and 4 the reference price Wn shall be given by the following formula:—

where—

a

FC_n is the notional cost of fuel (calculated in pence per gigajoule) which would be consumed in generating the relevant amount of electricity if it had been generated by the generating station at Longannet in month n which is given by the following formula:—

where—

(i)

CP_n is the price (in pounds per tonne) of coal shown in the Relevant Table in relation to quarter q—2 (where “quarter q” means the calendar quarter in which month n occurs, “quarter q—1” means the quarter immediately preceding quarter q, and “quarter q—2” means the quarter immediately preceding quarter q—1); and

(ii)

δ_n is the average net calorific value of coal which would have been consumed in generating electricity at the generating station at Longannet in relation to quarter q—2 (where “quarter q” means the calendar quarter in which month n occurs, “quarter q—1” means the quarter immediately preceding quarter q, and “quarter q—2” means the quarter immediately preceding quarter q—1); and

b

α is the average incremental heat rate of the generating station at Longannet (calculated in net gigajoule per kWh).

6.  In paragraphs 3 and 4 “security period” means a period commencing on the date on which security directions come into force and ending on the specified date, and in this paragraph—

(a) “security directions” means directions given under paragraph (b) of sub-section (4) of section 34 of the Act (whether or not such directions are given in conjunction with directions given under any other provision of that section); and

(b) “specified date” means the date (not being earlier than the date on which the security directions cease to be in force) specified by the Director in a notice to licence holders as the date by which any procedure governing the despatch of electricity from generating stations the operation of which was suspended while the security directions were in force once more becomes operative.

7.  In paragraph 5 “the Relevant Table” means the table showing the average price of coal purchased by the major United Kingdom power producers as contained in the Energy Trends published from time to time by the Department of Trade and Industry, or any table expressly published to replace the same. If the Relevant Table shall at any time be suspended or terminated, an alternative method of computation, as nearly as practicable consistent with the Relevant Table, shall be determined by the Director after consultation with the public electricity suppliers.