Legal background
- The UK’s energy system is governed by a wide range of different pieces of legislation, a number of these are amended by this Act. This legislation, and a brief description of the main changes relevant to each , is provided below to assist the reader in placing some of the details described in these Explanatory Notes in context.
- The Nuclear Installations Act 1965 is amended for a number of purposes relating to: nuclear decommissioning, low level nuclear waste regulation, the scope of the 1965 Act in relation to fusion energy facilities, the territorial extent of the 1965 Act for the purposes of geological disposal in the territorial sea and for the purposes of acceding to the Convention on Supplementary Compensation for Nuclear Damage.
- The Enterprise Act 2002 is amended primarily for the purpose of allowing the Competition and Markets Authority to take action in relation to mergers between two or more energy network enterprises. That Act and the Competition Act 1998 are also modified for those and other purposes.
- The Energy Act 2004 is amended for the purpose of making changes to the powers and remit of the Civil Nuclear Constabulary and to provide a power to include as renewable transport fuel, additional fuel types derived from nuclear power and from waste. The Energy Act 2004 is also modified to extend the special administration regime for energy licensees to CO2 transport and storage licensees.
- The Energy Act 2008 (the 2008 Act) is amended to provide for the continuing supervision of the roll-out of smart meters and the Smart Meters Act 2018 is amended as a consequence of these amendments. The 2008 Act is also amended so that the modifications it makes to the Petroleum Act 1998 accurately reflect the current policy related to the abandonment of carbon dioxide storage installations and to provide for cooperation between relevant licensing authorities.
- The Gas Act 1986 is modified to ensure that the powers contained in that Act work for the purpose of conducting the hydrogen grid conversion trial. This Act is also amended in particular, to include new licensing functions for the Independent System Operator (ISOP) in respect of their planning and forecasting function and a licensing function for the new code manager who will have responsibility for the governance of a designated gas licence document. This Act is also amended to enable the ISOP’s gas system planner licence to include conditions for or in connection with the purpose of facilitating or ensuring the effective performance (whether in relation to Northern Ireland or any other part of the United Kingdom) of hydrogen production allocation body functions, at times when the hydrogen production allocation body holds a gas system planner licence. This Act is also amended to include a reference to the net zero and carbon budgets targets in the Climate Change Act 2008 in the principal objectives and duties of the Secretary of State and the GEMA; therefore, requiring the regulator to consider how its decisions may assist the Secretary of State in meeting the government’s net zero and carbon budget targets.
- The Rights of Entry (Gas and Electricity Boards) Act 1954 is modified so that the relevant provisions apply as though a reference to a gas operator includes a person conducting a hydrogen grid conversion trial.
- The Electricity Act 1989 is amended for a number of reasons but in particular to provide new activities that are licensable under the terms of that Act. These include: the activity coordinating and directing the flow of electricity for the purposes of transmitting electricity (relevant to the ISOP), industry code governance, the activity of operating a multi-purpose interconnector and a power to make regulations regarding performing load control functions. A new definition is also added to this Act which relates to storing electricity. This Act is also amended to include a reference to the net zero and carbon budgets targets in the Climate Change Act 2008 in the principal objectives and duties of the Secretary of State and the GEMA; therefore, requiring the regulator to consider how its decisions may assist the Secretary of State in meeting the government’s net zero and carbon budget targets.
- The Petroleum Act 1998 is amended to add a section related to the Oil and Gas Authority’s power over changes of control of petroleum licensees and to provide for a new charging scheme related to work carried out by the Secretary of State to abandonment programs for offshore installations. This Act is also applied in other parts of the Act (see Energy Act 2008 above) related to the abandonment of carbon dioxide storage installations.
- A number of minor consequential amendments are also made in other primary legislation including the Utilities Act 2000, the Energy Act 2013, the Enterprise and Regulatory Reform Act 2013, the Energy Act 2016 and the Heat Networks (Scotland) Act 2021.
- The Climate Change Act 2008 is amended to broaden the scope of removals of greenhouse gases so that it includes a number of different removal methods and not just removals through land use.
