Legislation – Energy Act 2023

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Introduction

Part 1
Licensing of carbon dioxide transport and storage

Chapter 1 Licensing of activities

General functions

1 Principal objectives and general duties of Secretary of State and economic regulator

Licensable activities

2 Prohibition on unlicensed activities

3 Consultation on proposals for additional activities to become licensable

4 Territorial scope of prohibition

5 Exemption from prohibition

6 Revocation or withdrawal of exemption

Grant and conditions of licences

7 Power to grant licences

8 Power to create licence types

9 Procedure for licence applications

10 Competitive tenders for licences

11 Conditions of licences: general

12 Standard conditions of licences

13 Modification of conditions of licences

14 Modification of conditions under section 13: supplementary

15 Modification by order under other enactments

Interim power of Secretary of State to grant licences

16 Interim power of Secretary of State to grant licences

Termination of licence

17 Termination of licence

Transfer of licences

18 Transfer of licences

19 Consenting to transfer

Appeal from decisions of the economic regulator

20 Appeal to the CMA

21 Procedure on appeal to CMA

22 Determination by CMA of appeal

23 CMA’s powers on allowing appeal

24 Time limits for CMA to determine an appeal

25 Determination of appeal by CMA: supplementary

Information

26 Provision of information to or by the economic regulator

27 Power of Secretary of State to require information

Other functions of the economic regulator

28 Monitoring, information gathering etc

29 Power to require information for purposes of monitoring

30 Duty to carry out impact assessment

31 Reasons for decisions

Enforcement

32 Enforcement of obligations of licence holders

False statements

33 Making of false statements etc

Criminal liability and procedure

34 Liability of officers of entities

35 Criminal proceedings

Chapter 2 Functions with respect to competition

36 Functions under the Enterprise Act 2002

37 Functions under the Competition Act 1998

38 Sections 36 and 37: supplementary

Chapter 3 Reporting requirements

39 Forward work programmes

40 Information in relation to CCUS strategy and policy statement

41 Annual report on transport and storage licensing functions

Chapter 4 Special administration regime

Transport and storage administration orders

42 Transport and storage administration orders

43 Objective of a transport and storage administration

Application and amendment of the Energy Act 2004

44 Application of certain provisions of the Energy Act 2004

45 Conduct of administration, transfer schemes etc

Licence modifications

46 Modification of conditions of licences

Powers to modify enactments

47 Modification under the Enterprise Act 2002

48 Power to make further modifications of insolvency legislation

Interpretation

49 Interpretation of Chapter 4

Chapter 5 Transfer schemes

50 Transfer schemes

51 Consultation in relation to transfers

52 Conduct of transfer schemes

Chapter 6 Miscellaneous and general

53 Cooperation of storage licensing authority with economic regulator

54 Amendments related to Part 1

55 Interpretation of Part 1

Part 2
Carbon dioxide capture, storage etc and hydrogen production, transport and storage

Chapter 1 Revenue support contracts

Key definitions

56 Chapter 1: interpretation

Provision of revenue support under certain contracts

57 Revenue support contracts

Duties of revenue support counterparty

58 Duties of revenue support counterparty

Carbon dioxide capture, storage etc and hydrogen production, transport and storage

59 Designation of carbon dioxide transport and storage counterparty

60 Direction to offer to contract with licence holder

Hydrogen transport

61 Designation of hydrogen transport counterparty

62 Direction to offer to contract with eligible hydrogen transport provider

Hydrogen storage

63 Designation of hydrogen storage counterparty

64 Direction to offer to contract with eligible hydrogen storage provider

Hydrogen production

65 Designation of hydrogen production counterparty

66 Direction to offer to contract with eligible low carbon hydrogen producer

Carbon capture

67 Designation of carbon capture counterparty

68 Direction to offer to contract with eligible carbon capture entity

Hydrogen levy

69 Appointment of hydrogen levy administrator

70 Obligations of relevant market participants

71 Payments to relevant market participants

72 Functions of hydrogen levy administrator

Allocation of contracts

73 Power to appoint allocation bodies

74 Standard terms of revenue support contracts

75 Allocation notifications

76 Allocation of contracts

77 Duty to offer to contract following allocation

78 Modification of standard terms

79 Sections 75 to 78: supplementary

80 Licence conditions regarding functions of certain allocation bodies

General provision about counterparties

81 Further provision about designations

82 Application of sums held by a revenue support counterparty

Information and advice

83 Information and advice

Enforcement

84 Enforcement

Consultation

85 Consultation

Transfer schemes

86 Transfer schemes

87 Modification of transfer schemes

General

88 Shadow directors, etc

89 Modifications of licences etc for purposes related to levy obligations

90 Electricity system operator and gas system planner licences: modifications

91 Sections 89 and 90: supplementary

Chapter 2 Decommissioning of carbon storage installations

Financing of costs of decommissioning etc

92 Financing of costs of decommissioning etc

93 Section 92: supplementary

94 Regulations under section 92(1): procedure with devolved authorities

Abandonment of carbon storage installations etc

95 Provisions relating to Part 4 of the Petroleum Act 1998

Change of use relief

96 Change of use relief: installations

97 Change of use relief: carbon storage network pipelines

98 Change of use relief: supplementary

Chapter 3 Strategy and policy statement

99 Designation of strategy and policy statement

100 Duties with regard to considerations in the statement

101 Review

102 Procedural requirements

Chapter 4 Carbon dioxide storage licences

103 Specified provisions in carbon dioxide storage licences

104 Content of storage permits under carbon dioxide storage licences

105 Offences relating to carbon dioxide storage licences

106 Power of OGA to require information about change in control of licence holder

Chapter 5 Carbon storage information and samples

Introductory

107 Chapter 5: key definitions

Requirements relating to information and samples

108 Retention of information and samples

109 Preparation and agreement of information and samples plans

110 Information and samples plans: supplementary

111 Information and samples coordinators

112 Power of OGA to require information and samples

113 Prohibition on disclosure of information or samples by OGA

114 Power of Secretary of State to require information and samples

Enforcement of sanctionable requirements

115 Power of OGA to give sanction notices

116 Enforcement notices

117 Financial penalty notices

118 Revocation notices

119 Operator removal notices

120 Duty of OGA to give sanction warning notices

121 Publication of details of sanctions

122 Subsequent sanction notices

123 Withdrawal of sanction notices

124 Sanctions: information powers

General

125 Appeals

126 Procedure for enforcement decisions

127 Interpretation of Chapter 5

Chapter 6 General

128 Access to infrastructure

129 Financial assistance

Part 3
Licensing of hydrogen pipeline projects

130 Key definitions for Part 3

131 Designation

132 Designation: procedure

133 Revocation of designation

134 Grant, extension or restriction of gas transporter licence by Secretary of State

135 Applications for grant etc of gas transporter licence

136 Modification of gas transporter licence by Secretary of State

137 Scope of modification powers under section 136

138 Procedure etc relating to modifications under section 136

139 Information and advice

140 Conditions of gas transporter licences for conveyance of hydrogen

141 Secretary of State directions to the GEMA

142 Repeal of Part 3

Part 4
New technology

Chapter 1 Low-carbon heat schemes

143 Low-carbon heat schemes

144 Application of scheme

145 Setting of targets etc

146 Further provision about scheme regulations

147 Administration of scheme

148 Enforcement, penalties and offences

149 Application of sums paid by virtue of section 146(4) or 148(3)

150 Appeals

151 Scheme regulations: procedure etc

152 Interpretation of Chapter 1

Chapter 2 Hydrogen grid conversion trials

153 Modifications of the gas code

154 Regulations for protection of consumers

Chapter 3 Miscellaneous

Hydrogen

155 Power to modify Gas Act 1986 in relation to hydrogen

Fusion energy

156 Fusion energy facilities: nuclear site licence not required

Renewable and sustainable fuel

157 Treatment of recycled carbon fuel and nuclear-derived fuel as renewable transport fuel

158 Revenue certainty scheme for sustainable aviation fuel producers: consultation and report

159 Renewable liquid heating fuel obligations

Removals of greenhouse gases

160 Climate Change Act 2008: meaning of “UK removals”

Part 5
Independent System Operator and Planner

161 The Independent System Operator and Planner (“the ISOP”)

162 Designation etc

163 Duty to promote particular objectives

164 Duty to have regard to particular matters

165 Duty to have regard to strategy and policy statement

165A Functions relating to network connections: duty to have regard to designated plans

166 Licensing of electricity system operator activity

167 Direction for transmission licence to have effect as electricity system operator licence

168 Licensing of gas system planning activity

169 Modification of licences etc

170 Procedure relating to modifications under section 169

171 Provision of advice, analysis or information

172 Power to require information from regulated persons etc

173 Duty to keep developments in energy sector under review

174 Transfers

175 Pension arrangements

176 Financial assistance for the ISOP

177 Cross-sectoral funding

178 Principal objective and general duties of Secretary of State and GEMA under Part 5

179 Minor and consequential amendments

180 Interpretation of Part 5

181 Regulations under Part 5

Part 6
Governance of gas and electricity industry codes

182 Designation of codes etc

183 Meaning of “code manager” and “code manager licence”

184 Designation of central systems

185 Licence under Gas Act 1986 for performance of code management function

186 Licence under Electricity Act 1989 for performance of code management function

187 Selection of code manager

188 Selection on a non-competitive basis

189 Selection on a competitive basis

190 Strategic direction statement

191 Transfer of functions under section 190 to Independent System Operator and Planner

192 Modification of designated documents by GEMA

193 Modification under section 192

194 Directions relating to designated central systems

195 Directions under section 194

196 Principal objective and general duties of Secretary of State and GEMA under Part 6

197 GEMA’s annual report to cover matters relating to designated documents

198 Regulations under Part 6

199 Interpretation of Part 6

200 Transitional provision and pension arrangements

201 Minor and consequential amendments

Part 7
Market reform and consumer protection

202 Principal objectives of Secretary of State and GEMA

203 Competitive tenders for electricity projects

204 Mergers of energy network enterprises

205 Licence required for operation of multi-purpose interconnector

206 Standard conditions for MPI licences

207 Operation of multi-purpose interconnectors: independence

208 Grant of MPI licences to existing operators

209 Power to make consequential etc provision

210 Consequential amendments relating to multi-purpose interconnectors

211 Electricity support payments for energy-intensive industries

212 Levy to fund electricity support payments

213 Electricity storage

214 Payment as alternative to complying with certain energy company obligations

215 Smart meters: extension of time for exercise of powers

Part 8
Heat networks

Chapter 1 Regulation of heat networks

216 Relevant heat network

217 The Regulator

218 Alternative dispute resolution for consumer disputes

219 Heat networks regulations

220 Regulations made by Secretary of State: consultation with devolved authorities

221 Heat networks regulations: other provision about procedure

222 Recovery of costs by GEMA and NIAUR

223 Heat networks: licensing authority in Scotland

224 Heat networks: enforcement in Scotland

225 Interpretation of Chapter 1

Chapter 2 Heat network zones

Zones regulations

226 Regulations about heat network zones

Heat Network Zones Authority and zone coordinators

227 Heat Network Zones Authority

228 Zone coordinators

Identification, designation and review of zones

229 Identification, designation and review of zones

230 Zoning methodology

231 Requests for information in connection with section 229 or 230

Heat networks within zones

232 Heat networks within zones

233 Delivery of district heat networks within zones

Enforcement

234 Enforcement of heat network zone requirements

235 Penalties

Records, information and reporting

236 Records, information and reporting

Interpretation

237 Interpretation of Chapter 2

Part 9
Energy smart appliances and load control

Chapter 1 Introductory

238 Energy smart appliances and load control

Chapter 2 Energy smart appliances

239 Energy smart regulations

240 Prohibitions and requirements: supplemental

241 Enforcement

242 Sanctions, offences and recovery of costs

243 Appeals against enforcement action

244 Regulations: procedure and supplemental

Chapter 3 Licensing of load control

245 Power to amend licence conditions etc: load control

246 Power to amend licence conditions etc: procedure

247 Load control: supplemental

248 Application of general duties to functions relating to load control

249 Licensing of activities relating to load control

Part 10
Energy performance of premises

250 Power to make energy performance regulations

251 Energy performance regulations relating to new premises

252 Sanctions

253 Regulations under Part 10

Part 11
Energy Savings Opportunity Schemes

254 Energy savings opportunity schemes

255 Application of energy savings opportunity schemes

256 Requirement for assessment of energy consumption

257 Assessors

258 ESOS action plans

259 Action to achieve energy savings or emissions reductions

260 Scheme administration

261 Enforcement, penalties and offences

262 Appeals

263 ESOS regulations: procedure etc

264 Directions to scheme administrators

265 Financial assistance to scheme administrators and participants

266 Interpretation of Part 11

Part 12
Core fuel sector resilience

Chapter 1 Introduction

267 General objective

268 “Core fuel sector activity” and other key concepts

Chapter 2 Powers for resilience purposes

Directions

269 Directions to particular core fuel sector participants

270 Procedure for giving directions

271 Offence of failure to comply with a direction

Corresponding powers to make regulations

272 Corresponding powers to make regulations

Information

273 Power to require information

274 Duty to report incidents

275 Contravention of requirement under section 273 or 274

276 Provision of information at specified intervals

277 Disclosure of information held by the Secretary of State

278 Disclosure of information by HMRC

Appeal against notice or direction

279 Appeal against notice or direction

Chapter 3 Enforcement

Offences

280 False statements etc

281 Offences under regulations

282 Proceedings for offences

283 Liability of officers of entities

Enforcement undertakings

284 Enforcement undertakings

Guidance

285 Guidance: criminal and civil sanctions

286 Guidance: Parliamentary scrutiny

Chapter 4 General

Financial assistance

287 Financial assistance for resilience and continuity purposes

Power to amend thresholds

288 Power to amend thresholds

Interpretation of Part 12

289 Interpretation of Part 12

Part 13
Offshore wind electricity generation, oil and gas

Chapter 1 Offshore wind electricity generation

290 Meaning of “relevant offshore wind activity”

291 Strategic compensation for adverse environmental effects

292 Marine recovery fund

293 Assessment of environmental effects etc

294 Regulations under section 293: consultation and procedure

295 Interpretation of Chapter 1

Chapter 2 Oil and Gas

Environmental protection

296 Arrangements for responding to marine oil pollution

297 Habitats: reducing effects of offshore oil or gas activities etc

298 Regulations under sections 296 and 297: procedure with devolved authorities

Decommissioning: charging

299 Charges in connection with abandonment of offshore installations

Change in control of licensee

300 Model clauses of petroleum licences

301 Power of OGA to require information about change in control of licensee

Part 14
Civil nuclear sector

Chapter 1 Civil nuclear sites

302 Application to the territorial sea of requirement for nuclear site licence

303 Decommissioning of nuclear sites etc

304 Excluded disposal sites

305 Accession to Convention on Supplementary Compensation for Nuclear Damage

306 Power to implement Convention on Supplementary Compensation for Nuclear Damage

Chapter 2 Civil Nuclear Constabulary

307 Provision of additional police services

308 Provision of assistance to other forces

309 Cross-border enforcement powers

310 Publication of three-year strategy plan

Chapter 3 Relevant nuclear pension schemes

311 Civil nuclear industry: amendment of relevant nuclear pension schemes

312 Meaning of “relevant nuclear pension scheme”

313 Information

314 Further definitions

315 Application of relevant pensions legislation

316 Procedure for regulations under Chapter 3

Chapter 4 Great British Nuclear

Great British Nuclear: designation, status and objects

317 Great British Nuclear

318 Crown status

319 Great British Nuclear’s objects

Financial assistance and directions etc

320 Financial assistance

321 Secretary of State directions and guidance

Annual report and accounts

322 Annual report

323 Annual accounts

Transfers and pension arrangements etc

324 Transfer schemes

325 Transfer schemes: compensation

326 Transfer schemes: taxation

327 Transfer schemes: provision of information or assistance

328 Reimbursement and compensation in connection with designation

329 Pension arrangements in connection with Great British Nuclear

Part 15
General

330 Power to make consequential provision

331 Regulations

332 General definitions

333 Extent

334 Commencement

335 Short title

SCHEDULES

Schedule 1 Interim power of Secretary of State to grant licences

Schedule 2 Procedure for appeals under section 20

Schedule 3 Enforcement of obligations of licence holders

Schedule 4 Transfer schemes

Schedule 5 Amendments related to Part 1

Schedule 6 Carbon dioxide storage licences: licence provisions

Schedule 7 Permitted disclosures of material obtained by OGA

Schedule 8 Carbon storage information and samples: appeals

Schedule 9 Independent System Operator and Planner: transfers

Schedule 10 Independent System Operator and Planner: pensions

Schedule 11 Minor and consequential amendments relating to Part 5

Schedule 12 Governance of gas and electricity industry codes: transitional provision

Schedule 13 Governance of gas and electricity industry codes: pensions

Schedule 14 Minor and consequential amendments relating to Part 6

Schedule 15 Competitive tenders for electricity projects

Schedule 16 Mergers of energy network enterprises

Schedule 17 Multi-purpose interconnectors: consequential amendments

Schedule 18 Heat networks regulation

Schedule 19 Licensing of activities relating to load control

Schedule 20 Enforcement undertakings

Schedule 21 Petroleum licences: amendments to model clauses

Schedule 22 Accession to Convention on Supplementary Compensation for Nuclear Damage

Changes to legislation:

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Part 5Independent System Operator and Planner

Independent System Operator and Planner: functions and designation

161The Independent System Operator and Planner (“the ISOP”)

(1)

This Part contains provision about the Independent System Operator and Planner (referred to in this Part as “the ISOP”).

(2)

The functions of the ISOP include—

(a)

functions conferred by or by virtue of this Act, which include functions relating to the matters mentioned in subsection (3), and

(b)

whatever other functions are conferred on the ISOP by or by virtue of any enactment other than one contained in this Act.

(3)

The matters referred to in subsection (2)(a) are—

(a)

co-ordinating and directing the flow of electricity onto and over transmission systems;

(b)

making and administering arrangements for the provision of services for the purpose of facilitating the co-ordination of the flow of electricity onto and over transmission systems;

(c)

carrying out strategic planning and forecasting in connection with—

(i)

the development of transmission systems,

(ii)

the provision of services referred to in paragraph (b), and

(iii)

other arrangements relating to the conveyance or supply of electricity;

(d)

carrying out strategic planning and forecasting in connection with—

(i)

the development of pipe-line systems for the conveyance of gas, and

(ii)

other arrangements relating to the conveyance or supply of gas;

(e)

providing advice, analysis or information in relation to the matters mentioned in section 171(1).

162Designation etc

(1)

The Secretary of State may by notice designate a person as the ISOP.

(2)

A notice under subsection (1)

(a)

must specify the time from which the designation has effect;

(b)

must be published by the Secretary of State as soon as reasonably practicable after the notice is given.

(3)

The Secretary of State must ensure that a person is designated under subsection (1) at all times after a person is first designated (but at any time not more than one person may be designated).

(4)

The Secretary of State may by notice revoke a person’s designation under subsection (1).

(5)

A notice under subsection (4)

(a)

must specify the time from which the revocation has effect;

(b)

must be published by the Secretary of State as soon as reasonably practicable after the notice is given.

General duties

163Duty to promote particular objectives

(1)

The ISOP must carry out its functions in the way that it considers is best calculated to promote—

(a)

the net zero objective;

(b)

the security of supply objective;

(c)

the efficiency and economy objective.

(2)

The net zero objective is the objective of enabling the Secretary of State to meet the duties imposed by—

(a)

section 1 of the Climate Change Act 2008 (net UK carbon account target for 2050), and

(b)

section 4(1)(b) of that Act (UK carbon account not to exceed carbon budget).

(3)

The security of supply objective is the objective of ensuring the security of supply, to existing and future consumers, of—

(a)

electricity conveyed by distribution systems or transmission systems, and

(b)

gas conveyed through pipes.

(4)

The efficiency and economy objective is the objective of promoting—

(a)

efficient, co-ordinated and economical systems for the distribution and transmission of electricity and the conveyance of gas;

(b)

efficiency (including the efficient use of energy) and economy on the part of persons who carry out relevant activities within subsection (5)(a), (b) or (c).

(5)

In this Part, “relevant activity” means any of the following, so far as carried out in the course of a business—

(a)

an activity mentioned in section 5(1) of the Gas Act 1986 (gas transportation, interconnection, supply, shipping, system planning, smart meter communication, code management);

(b)

an activity mentioned in section 4(1) of the Electricity Act 1989 (electricity generation, transmission, distribution, supply, interconnection, multi-purpose interconnection, system operation, smart meter communication, code management);

(c)

an activity, other than an activity within paragraph (a) or (b), in respect of which the ISOP has functions;

(d)

an activity, other than an activity within paragraph (a), (b) or (c), that is connected with—

(i)

the production, conveyance, storage or supply of energy,

(ii)

the reduction of UK emissions of targeted greenhouse gases arising from the production, conveyance, storage, supply or consumption of energy, or

(iii)

data relating to any matter within sub-paragraph (i) or (ii), or to demand for or consumption of energy.

(6)

For the purposes of subsection (5)(d)—

(a)

energy” means energy in any form and includes fuel or other substances used to produce energy;

(b)

references to the production of energy include references to the conversion of energy from one form to another;

(c)

references to the supply of energy include references to adjusting consumption of energy (whether generally, at particular times, or by particular persons);

(d)

an activity referred to in paragraph (d)(i) is not a relevant activity when carried out in relation to products for human or animal consumption;

(e)

“UK emissions of targeted greenhouse gases” are emissions of such gases as are, or are treated for the purposes of Part 1 of the Climate Change Act 2008 as, emissions from sources in the United Kingdom.

(7)

In this section, “targeted greenhouse gas” has the same meaning as in Part 1 of the Climate Change Act 2008 (see section 24 of that Act).

164Duty to have regard to particular matters

(1)

The ISOP must, when carrying out its functions, have regard to—

(a)

the need to facilitate competition between persons who carry out a relevant activity (except to the extent that such persons are, in accordance with or by virtue of an enactment, not subject to competition in relation to the activity);

(b)

the consumer impact of a relevant activity;

(c)

the whole-system impact of a relevant activity;

(d)

the desirability of facilitating innovation in relation to the carrying out of relevant activities.

(2)

The reference in subsection (1)(b) to the consumer impact of a relevant activity is a reference to the impact (or likely impact) of—

(a)

the behaviour of persons who carry out the activity on existing and future consumers, and

(b)

the behaviour of existing and future consumers on the carrying out of the activity.

(3)

The reference in subsection (1)(c) to the whole-system impact of a relevant activity is a reference to the impact (or likely impact) of—

(a)

the carrying out of the activity, and

(b)

the behaviour of existing and future consumers in relation to the carrying out of the activity,

in relation to the carrying out of other relevant activities.

165Duty to have regard to strategy and policy statement

(1)

The ISOP must, when carrying out its functions, have regard to the strategic priorities set out in the current strategy and policy statement.

(2)

The ISOP must give notice to the Secretary of State if at any time the ISOP concludes that a policy outcome contained in the current strategy and policy statement is not realistically achievable.

(3)

A notice under subsection (2) must include—

(a)

the grounds on which the conclusion was reached;

(b)

what (if anything) the ISOP is doing or proposes to do for the purpose of furthering the delivery of the outcome so far as reasonably practicable.

(4)

In this section—

the current strategy and policy statement” means the statement for the time being designated under section 131(1) of the Energy Act 2013;

policy outcome” and “strategic priorities” have the same meaning as in Part 5 of the Energy Act 2013 (see section 131(5) of that Act).

(5)

Part 5 of the Energy Act 2013 is amended as follows.

(6)

In section 131 (designation of strategy and policy statement)—

(a)

in subsection (2)(c), after “Authority” insert “, the Independent System Operator and Planner”;

(b)

in subsection (5), after the definition of “the 1986 Act” insert—

““Independent System Operator and Planner” means the person for the time being designated under section 162(1) of the Energy Act 2023;”.

(7)

Section 134 (review of strategy and policy statement) is amended as follows.

(8)

In subsection (4), after paragraph (b) insert—

“(ba)

the Independent System Operator and Planner has given notice to the Secretary of State under section 165(2) of the Energy Act 2023 since the relevant time,”.

(9)

After subsection (5) insert—

“(5A)

The Secretary of State may also review the strategy and policy statement at any other time if the Secretary of State considers it appropriate to do so in preparation for or in connection with the designation of a person under section 162(1) of the Energy Act 2023 (Independent System Operator and Planner).”

(10)

In subsection (10), after paragraph (a) insert—

“(aa)

the Independent System Operator and Planner,”.

(11)

In section 135(4) (procedural requirements in relation to strategy and policy statement), after paragraph (a) insert—

“(aa)

the Independent System Operator and Planner,”.

F1165AFunctions relating to network connections: duty to have regard to designated plans

(1)

The ISOP must, when carrying out any of its functions relating to the management of connections to the transmission system, have regard to the designated strategic plans.

(2)

The Secretary of State may by regulations designate plans or documents for the purposes of this section.

(3)

In subsection (1), the reference to “the designated strategic plans” is a reference to those plans or documents designated by regulations under subsection (2) as they have effect at the time when the regulations are made.

Licences

166Licensing of electricity system operator activity

(1)

Part 1 of the Electricity Act 1989 is amended as follows.

(2)

In section 4(1) (prohibition on unlicensed supply, transmission etc of electricity), after paragraph (c) insert—

“(ca)

co-ordinates and directs the flow of electricity onto and over transmission systems by means of which the transmission of electricity takes place;”.

(3)

Section 6 (licences authorising supply, etc) is amended as follows.

(4)

In subsection (1), after paragraph (d) insert—

“(da)

subject to subsections (1ZB) and (2ZA), a licence authorising a person to co-ordinate and direct the flow of electricity onto and over transmission systems by means of which the transmission of electricity takes place (“an electricity system operator licence”);”.

(5)

After subsection (1) insert—

“(1ZA)

Subject to subsection (2ZA), the Secretary of State may grant an electricity system operator licence.

(1ZB)

The first electricity system operator licence may only be granted by the Secretary of State.

(1ZC)

For the purposes of this section, references to the grant of an electricity system operator licence include the giving of a direction under section 167 of the Energy Act 2023 in respect of a transmission licence.”

(6)

After subsection (2) insert—

“(2ZA)

A person may not be granted an electricity system operator licence unless the same person—

(a)

already holds a licence granted under section 7AA of the Gas Act 1986, or

(b)

is granted such a licence at the same time as the person is granted an electricity system operator licence.”

(7)

In subsection (2A), for “(d)” substitute “(da)”.

(8)

In subsection (8), after “term of the licence” insert “and subject to”.

(9)

After subsection (8) insert—

“(8A)

If a person who holds an electricity system operator licence ceases at any time to hold a licence under section 7AA of the Gas Act 1986, the person is to be treated as ceasing to hold the electricity system operator licence at the same time.”

(10)

In section 7A (transfer of licences), after subsection (11) insert—

“(11ZA)

An electricity system operator licence may not be transferred to a person unless a licence granted under section 7AA of the Gas Act 1986 is also transferred to the same person at the same time.”

167Direction for transmission licence to have effect as electricity system operator licence

(1)

The Secretary of State may (instead of granting an electricity system operator licence) direct that a pre-commencement transmission licence is to have effect as an electricity system operator licence.

(2)

A direction under this section may provide that a licence that has effect by virtue of the direction includes such terms and conditions as are specified, or of a description specified, in the direction (regardless of whether or the extent to which those terms and conditions were included in the pre-commencement transmission licence).

(3)

A direction under this section may provide for the continued effect (in accordance with the direction) of rights, liabilities and obligations that have effect immediately before the relevant date in connection with—

(a)

a pre-commencement transmission licence,

(b)

a document maintained in accordance with the conditions of such a licence, or

(c)

an agreement that gives effect to such a document.

(4)

In subsection (3), “the relevant date” means the date on which the direction takes effect.

(5)

A direction under this section may make—

(a)

incidental, consequential, supplementary and transitional provision;

(b)

such amendments relating to the revocation of a pre-commencement transmission licence as the Secretary of State considers appropriate;

(c)

different provision for different purposes.

(6)

Before giving a direction under this section, the Secretary of State must consult—

(a)

the GEMA, and

(b)

such other persons as the Secretary of State considers appropriate.

(7)

Subsection (6) may be satisfied by consultation before the passing of this Act (as well as by consultation after that time).

(8)

In this Part

electricity system operator licence” means a licence under section 6(1)(da) of the Electricity Act 1989 (as inserted by section 166);

pre-commencement transmission licence” means a licence under section 6(1)(b) of the Electricity Act 1989 that is in force immediately before this section comes into force.

168Licensing of gas system planning activity

(1)

The Gas Act 1986 is amended as follows.

(2)

In section 5 (prohibition on unlicensed activities), in subsection (1)—

(a)

omit the “or” at the end of paragraph (c);

(b)

after that paragraph insert—

“(ca)

carries out planning and forecasting functions of the Independent System Operator and Planner;”;

(c)

after subsection (10) insert—

“(10A)

In subsection (5)(1)(ca), “planning and forecasting functions of the Independent System Operator and Planner” means functions that—

(a)

are conferred by or by virtue of an enactment on a person who is designated under section 162(1) of the Energy Act 2023, and

(b)

relate to strategic planning and forecasting in connection with the development of pipe-line systems operated by gas transporters for the conveyance of gas.”

(3)

After section 7A insert—

“7AALicensing of a person carrying out gas system planner functions

(1)

Subject to subsections (3) and (4), the Authority may grant a licence authorising a person to carry out planning and forecasting functions of the Independent System Operator and Planner (“a gas system planner licence”).

(2)

Subject to subsection (4), the Secretary of State may grant a gas system planner licence.

(3)

The first gas system planner licence may only be granted by the Secretary of State.

(4)

A person may not be granted a gas system planner licence unless either of the following paragraphs applies to the person—

(a)

the person—

(i)

already holds an electricity system operator licence, or

(ii)

is treated as holding such a licence by virtue of a direction under section 167 of the Energy Act 2023;

(b)

the person is granted an electricity system operator licence, or is treated by virtue of a direction under section 167 of the Energy Act 2023 as having been granted such a licence, at the same time as the person is granted a gas system planner licence.

(5)

In this section—

electricity system operator licence” means a licence under section 6(1)(da) of the Electricity Act 1989;

planning and forecasting functions of the Independent System Operator and Planner” has the meaning given by section 5(10A).”

(4)

In section 7B (licences: general)—

(a)

in subsection (3), after “contained in it” insert “and subject to subsection (3A)”;

(b)

after subsection (3) insert—

“(3A)

If a person who holds a gas system planner licence ceases at any time to hold a licence under section 6(1)(da) of the Electricity Act 1989, the person is to be treated as ceasing to hold the gas system planner licence at the same time.”

(5)

In section 8AA (transfer of licences), after subsection (11) insert—

“(11ZA)

A gas system planner licence may not be transferred to a person unless a licence granted under section 6(1)(da) of the Electricity Act 1989 is also transferred to the same person at the same time.”

169Modification of licences etc

(1)

A relevant authority may modify—

(a)

the conditions of a particular relevant licence;

(b)

the standard conditions of relevant licences of a particular type;

(c)

a relevant document.

(2)

A relevant authority may revoke a pre-commencement transmission licence where—

(a)

the licence authorises the holder to co-ordinate and direct the flow of electricity onto and over a transmission system by means of which the transmission of electricity takes place, and

(b)

the first electricity system operator licence has been granted to a person.

(3)

A relevant authority may exercise the power under subsection (1) or (2) only—

(a)

in preparation for the designation of a person under section 162(1), or

(b)

in connection with or in consequence of the designation of a person under that provision.

(4)

A relevant authority may also exercise the power under subsection (1) where—

(a)

the operation or management of a relevant document is affected by steps taken in connection with the designation of a person under section 162(1) or by the preparation for such a designation, and

(b)

the authority considers it appropriate to exercise the power in connection with the operation or management of a relevant document.

(5)

The Secretary of State may direct the GEMA to exercise the power under subsection (1) or (2) if the Secretary of State considers it appropriate for the GEMA to exercise that power.

(6)

A relevant authority may not exercise the power under subsection (1) or (2) after the end of the period of 3 years beginning with the day on which the first designation under section 162(1) has effect.

(7)

In this section—

pre-commencement transmission licence” has the same meaning as in section 167;

relevant authority” means the Secretary of State or the GEMA;

relevant document” means a document maintained in accordance with the conditions of a relevant licence.

Annotations:
Commencement Information

I19S. 169 in force at Royal Assent, see s. 334(2)(h)(i)

170Procedure relating to modifications under section 169

(1)

Before making a modification under section 169, a relevant authority must—

(a)

publish a notice about the proposed modification,

(b)

send a copy of the notice to the persons listed in subsection (2), and

(c)

consider any representations made within the period specified in the notice about the proposed modification or the date from which it would take effect.

(2)

The persons mentioned in subsection (1)(b) are—

(a)

each relevant licence holder;

(b)

the GEMA (where the relevant authority is the Secretary of State) or the Secretary of State (where the relevant authority is the GEMA);

(c)

the National Association of Citizens Advice Bureaux;

(d)

the Scottish Association of Citizens Advice Bureaux;

(e)

Consumer Scotland;

(f)

the General Consumer Council for Northern Ireland, unless the relevant authority does not consider it appropriate for the Council to be sent a copy of the notice in a particular case;

(g)

where the proposed modification relates to a licence for the purposes of section 5 of the Gas Act 1986, the Health and Safety Executive;

(h)

such other persons as the relevant authority considers appropriate.

(3)

A notice under subsection (1) must—

(a)

state that the relevant authority proposes to make a modification;

(b)

set out the proposed modification and its effect;

(c)

specify the date from which the relevant authority proposes that the modification will have effect;

(d)

state the reasons why the relevant authority proposes to make the modification.

(4)

If, after complying with subsections (1) to (3) in relation to a modification, the relevant authority decides to make the modification, it must publish a notice about the decision.

(5)

A notice under subsection (4) must—

(a)

state that the relevant authority has decided to make the modification;

(b)

set out the modification and its effect;

(c)

specify the date from which the modification has effect;

(d)

state how the relevant authority has taken account of any representations made in the period specified in the notice under subsection (1);

(e)

state the reason for any differences between the modification set out in the notice and the proposed modification.

(6)

A notice under this section about a modification or decision must be published in such manner as the relevant authority considers appropriate for bringing it to the attention of those likely to be affected by the making of the modification or decision.

(7)

References in this section to the making of a modification, in relation to a relevant licence, include references to the revocation of the licence.

(8)

In this section, “relevant licence holder”—

(a)

in relation to the modification of standard conditions of relevant licences of any type, means the holder of a licence of that type—

(i)

that is to be modified by the inclusion of a new standard condition, or

(ii)

that includes any standard conditions to which the modification relates that are in effect at the end of the period specified by virtue of subsection (1)(c);

(b)

in relation to the modification of a condition of a particular relevant licence (other than a standard condition), means the holder of that licence;

(c)

in relation to the modification of a document maintained in accordance with the conditions of a relevant licence of a particular type, means the holder of a relevant licence of that type;

(d)

in relation to the revocation of a relevant licence, means the holder of that licence.

(9)

In this section, “relevant authority” means the Secretary of State or the GEMA.

Annotations:
Commencement Information

I20S. 170 in force at Royal Assent, see s. 334(2)(h)(i)

Advice, analysis and information

171Provision of advice, analysis or information

(1)

The ISOP must, so far as reasonably practicable, comply with a request by a person within subsection (2) for the provision of advice, analysis or information to the person in connection with—

(a)

any of the ISOP’s functions,

(b)

any of the objectives listed in section 163(1), or

(c)

any of the matters listed in section 164(1).

(2)

The persons within this subsection are—

(a)

a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975: see section 8(1) of that Act);

(b)

the GEMA.

(3)

The ISOP must, so far as reasonably practicable, comply with a request made under subsection (1) within such period, and in such form and manner, as the person making the request may reasonably require.

172Power to require information from regulated persons etc

(1)

The ISOP may by notice request from a person within subsection (2) such information as the ISOP reasonably requires in connection with the exercise of any of its functions.

(2)

A person is within this subsection if—

(a)

the person carries out a relevant activity, or

(b)

the ISOP reasonably considers that the person intends to carry out a relevant activity.

(3)

A person to whom a request is made under subsection (1) must, so far as reasonably practicable, provide the requested information within such period, and in such form and manner, as may be specified in the notice.

(4)

Where a requirement under subsection (3) is imposed on a regulated person (as defined by section 25(8) of the Electricity Act 1989), it is enforceable by the GEMA as if it were a relevant requirement imposed on the person for the purposes of section 25 of that Act.

(5)

Where a requirement under subsection (3) is imposed on a regulated person (as defined by section 28(8) of the Gas Act 1986), it is enforceable by the GEMA as if it were a relevant requirement imposed on the person for the purposes of section 28 of that Act.

(6)

Where neither of subsections (4) and (5) applies, the duty imposed under subsection (3) on a person is enforceable by the ISOP in civil proceedings—

(a)

for an injunction,

(b)

for specific performance of a statutory duty under section 45 of the Court of Session Act 1988, or

(c)

for any other appropriate remedy or relief.

(7)

Nothing in this section requires a disclosure of information that would contravene the data protection legislation (within the meaning of the Data Protection Act 2018 – see section 3 of that Act).

In determining whether a disclosure would do so, the duty imposed by subsection (3) is to be taken into account.

173Duty to keep developments in energy sector under review

The ISOP must keep under review developments relating to the energy sector that may be relevant to the carrying out of any of the ISOP’s functions.

Transfers, pensions and financial assistance

174Transfers

Schedule 9 contains—

(a)

in Part 1, provision about transfer schemes relating to the ISOP;

(b)

in Part 2, related provision about transfers and other provision in connection with the designation of a person as the ISOP.

Annotations:
Commencement Information

I27S. 174 in force at Royal Assent, see s. 334(2)(h)(ii)

175Pension arrangements

Schedule 10 contains provision about pension arrangements in connection with the ISOP.

Annotations:
Commencement Information

I28S. 175 in force at Royal Assent, see s. 334(2)(h)(ii)

176Financial assistance for the ISOP

(1)

The Secretary of State may provide financial assistance to the ISOP.

(2)

Financial assistance under this section may be provided in any form and in particular may be provided by way of—

(a)

grant,

(b)

loan,

(c)

guarantee or indemnity, or

(d)

the acquisition of shares or any other interest in, or securities of, a body corporate.

(3)

Financial assistance under this section may be provided subject to such conditions as the Secretary of State considers appropriate (which may include conditions about repayment with or without interest or other return).

177Cross-sectoral funding

(1)

In section 7 of the Electricity Act 1989 (conditions of licences: general), in subsection (3A)—

(a)

for “or a distribution licence” substitute “, a distribution licence or an electricity system operator licence”;

(b)

in paragraph (a), for “his charges for the transmission or distribution of electricity” substitute “the charges payable to the holder in connection with the transmission or distribution of electricity, or in connection with the exercise of any other functions under or by virtue of the licence,”;

(c)

in paragraph (b), for “licence holders” substitute “holders of licences under section 6 or under Part 1 of the Gas Act 1986”.

(2)

In section 9 of that Act (general duties of licence holders), after subsection (2A) insert—

“(2B)

The conditions of a licence held by a person to which a duty imposed by subsection (1) or (2) applies may include a condition requiring the person, in performing the duty, to have regard to the interests of existing and future consumers in relation to gas conveyed through pipes (within the meaning of the Gas Act 1986).”

(3)

In section 7B of the Gas Act 1986 (licences: general), in subsection (5)(b)—

(a)

after “section 7” insert “or 7AA”;

(b)

in sub-paragraph (i), for “his charges for the conveyance of gas” substitute “the charges payable to the holder in connection with the conveyance of gas, or in connection with the exercise of any other functions under or by virtue of the licence,”;

(c)

in sub-paragraph (ii), for the words from “licences under” to “above” substitute “licences under this Part or under section 6 of the Electricity Act 1989”.

(4)

In section 9 of that Act (general powers and duties of gas transporters), after subsection (2) insert—

“(2A)

The conditions of a licence held by a gas transporter may include a condition requiring the gas transporter, in performing a duty under subsection (1), (1A) or (2), to have regard to the interests of existing and future consumers in relation to electricity conveyed by distribution systems or transmission systems (within the meaning of the Electricity Act 1989).”

Other

178Principal objective and general duties of Secretary of State and GEMA under Part 5

(1)

Sections 3A to 3D of the Electricity Act 1989 and sections 4AA to 4B of the Gas Act 1986 (principal objective and general duties) apply in relation to the functions of the Secretary of State under sections 162 and 167 as they apply in relation to functions under Part 1 of the Act in question.

(2)

Where the Secretary of State or the GEMA has functions under section 169, 170 or 172 in relation to a licence under section 6(1) of the Electricity Act 1989, sections 3A to 3D of that Act apply in relation to those functions as they apply in relation to functions under Part 1 of that Act.

(3)

Where the Secretary of State or the GEMA has functions under section 169, 170 or 172 in relation to a licence under section 7, 7ZA, 7A, 7AA, 7AB or 7AC of the Gas Act 1986, sections 4AA to 4B of that Act apply in relation to those functions as they apply in relation to functions under Part 1 of that Act.

179Minor and consequential amendments

Schedule 11 contains further amendments to the Electricity Act 1989 and the Gas Act 1986.

180Interpretation of Part 5

(1)

In this Part—

distribution system” has the same meaning as in Part 1 of the Electricity Act 1989 (see section 4(4) of that Act);

electricity system operator licence” has the meaning given by section 167(8);

gas” has the same meaning as in Part 1 of the Gas Act 1986 (see section 48(1) of that Act);

relevant activity” has the meaning given by section 163(5);

relevant licence” means a licence for the purposes of section 4 of the Electricity Act 1989 or section 5 of the Gas Act 1986 (prohibitions on unlicensed activities);

transmission system” has the same meaning as in Part 1 of the Electricity Act 1989 (see section 4(4) of that Act).

(2)

References in this Part to the distribution, generation, supply or transmission of electricity are to be construed in accordance with section 4(4) of the Electricity Act 1989.

(3)

For the purposes of this Part, references to the ISOP’s functions are to any functions that are exercisable by the person for the time being designated as the ISOP (whether they are exercisable in the person’s capacity as the ISOP or in another capacity).

Annotations:
Commencement Information

I38S. 180 in force at Royal Assent, see s. 334(2)(h)(iv)

181Regulations under Part 5

(1)

Regulations under this Part are subject to the negative procedure.

(2)

Subsection (1) does not apply to regulations under paragraph 9 of Schedule 9.

Annotations:
Commencement Information

I39S. 181 in force at Royal Assent, see s. 334(2)(h)(iv)