SCHEDULES

SCHEDULE 2The energy and environment principles

I1CSubsidies for electricity generation adequacy, renewable energy or cogeneration

1

Subsidies for electricity generation adequacy, renewable energy or cogeneration—

a

shall not undermine the ability of the United Kingdom to meet its obligations under Article 304 of the Trade and Cooperation Agreement (provisions relating to wholesale electricity and gas markets),

b

shall not unnecessarily affect the efficient use of electricity interconnectors provided for under Article 311 of the Trade and Cooperation Agreement (efficient use of electricity interconnectors), and

c

shall be determined by means of a transparent, non-discriminatory and effective competitive process.

2

But a non-competitive process may be used to determine a subsidy for renewable energy or cogeneration if appropriate measures are put in place to prevent overcompensation and—

a

the potential market supply is insufficient to ensure a competitive process,

b

the eligible capacity is unlikely to have a material effect on any of the following—

i

competition or investment within the United Kingdom,

ii

trade between the United Kingdom and any country or territory outside the United Kingdom, and

iii

investment as between the United Kingdom and any country or territory outside the United Kingdom, or

c

the subsidy is given for a demonstration project.

3

Sub-paragraph (1)(c) is without prejudice to Article 304(3) of the Trade and Co-operation Agreement (capacity mechanisms in electricity markets).

4

In this paragraph and paragraph D, “subsidy for electricity generation adequacy” means a subsidy that provides an incentive for a capacity provider to be available in times of expected system stress.