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Energy Act 2016

Contents

Legal background

The Oil and Gas Authority (OGA)

  1. The OGA will exercise certain licensing and regulatory functions in the Petroleum Act 1998, relating to the licensing of oil and gas exploration and production, which must be exercised in accordance with the Hydrocarbons Licensing Directive (94/22/EC) and the Offshore Safety Directive (2013/30/EU). It will also exercise licensing functions under Chapters 2 and 3 of Part 1 of the Energy Act 2008, relating to the importation and storage of combustible gas and the storage of carbon dioxide. In addition it will be responsible for the exercise of the functions of the Secretary of State under Chapter 3 of Part 2 of the Energy Act 2011, relating to access to upstream petroleum infrastructure and for the production of the Maximising Economic Recovery for the UK (MER UK) Strategy, required by the Petroleum Act 1998, section 9A (inserted by the Infrastructure Act 2015). It will also have a role advising on the costs of the decommissioning of offshore installations.

Fees

  1. OGED exercises environmental regulation functions in relation to offshore oil and gas and charges the industry for the exercise of those functions. It was recently discovered that the necessary fees regulations had not been made in relation to functions exercised under the enactments listed in section 77(3) of this Act. Fees are validly charged in relation to the remainder of OGED's functions in fees regulations made under section 2 of the Pollution Prevention and Control Act 1999, section 2(2) of the European Communities Act 1972 and section 56 of the Finance Act 1973.
  2. No power to make fees regulations existed in relation to the functions exercised under Part 4A of the Energy Act 2008 or some aspects of Part 4 of the Marine and Coastal Access Act 2009. Section 76 of the Act makes that provision. Section 77 validates all of the fees which have been charged without the requisite statutory authority in place.

Wind power

  1. Previously in England and Wales, onshore wind projects with a capacity of 50MW or under require planning permission under the Town and Country Planning Act 1990, where local planning authorities generally took the decisions. The construction or extension of onshore wind projects with a capacity greater than 50MW requires consent under the Planning Act 2008 from the Secretary of State for Energy and Climate Change. In addition there was a consenting regime in the Electricity Act 1989 for generating stations which have a capacity greater than 50MW, with the Secretary of State for Energy and Climate Change as the decision-maker. However this did not apply where consent was necessary under the Planning Act 2008 - which for onshore wind farms is currently the case.
  2. The Government has introduced secondary legislation:
    1. under the Planning Act 2008 to amend that Act to remove from it the requirement to obtain a consent before constructing or extending an onshore wind farm with a capacity greater than 50MW; and
    2. under the Electricity Act 1989 to provide in secondary legislation an exemption from the requirement to get consent under that Act for the construction, extension or operation of onshore wind farms greater than 50MW- consents that would be necessary once the Planning Act requirement has been removed. The provision in this Act would place that exemption in the Electricity Act itself.
  3. The RO is an obligation placed on licensed electricity suppliers. Suppliers must produce, by a specified day, a certain number of renewables obligation certificates (ROCs) in respect of each megawatt hour of electricity that each supplies to customers in Great Britain during a specified period. The RO is administered by the Gas and Electricity Markets Authority which issues ROCs to renewable electricity generators in respect of their eligible renewable output.
  4. The RO is provided for in relation to England and Wales by the Renewables Obligation Order 2015 (S.I. 2015/1947) which is made by the Secretary of State, and in relation to Scotland by the Renewables Obligation (Scotland) Order 2009 (S.S.I. 2009/140) which is made by Scottish Ministers. There is also a renewables obligation in Northern Ireland, which is provided by the Renewables Obligation Order (Northern Ireland) 2009 (S.R. 2009/154) made by the Northern Ireland Department of Enterprise, Trade and Investment. These complementary obligation orders together in effect create a UK-wide renewables obligation.
  5. Under the Renewables Obligation Closure Order 2014 (S.I. 2014/2388), the RO in England and Wales, and the RO in Scotland, will close to new generating capacity on 31st March 2017 subject to a number of grace periods. Subsequently, the Renewables Obligation Closure Order 2014 was amended by the Renewables Obligation Closure (Amendment) Order 2015 (S.I. 2015/920) to bring forward the closure date for large-scale solar pv stations to 31st March 2015, also subject to certain grace periods. It has also been amended by the Renewables Obligation Closure Etc. (Amendment) Order 2016 (S.I. 2016/457) to bring forward the closure date for small-scale solar pv stations to 31st March 2016. In Northern Ireland, the Renewables Obligation Closure Order (Northern Ireland) 2016 (S.I. 2016/174) closed the renewables obligation to new generating capacity from onshore wind generating stations over 5MW on 31st March 2016. The Northern Ireland Department of Enterprise, Trade and Investment is currently undertaking a consultation process on proposals for the early closure of the renewables obligation to new generating capacity from onshore wind generating stations under 5MW.

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