Energy Act 2008

Official Summary

A Bill to make provision relating to gas importation and storage; to make provision in relation to electricity generated from renewable sources; to make provision about the decommissioning of energy installations and wells; to make provision about the management and disposal of waste produced during the operation of nuclear installations; to make provision relating to petroleum licences; to make provision about third party access to oil and gas infrastructure and modifications of pipelines; to make provision about reports relating to energy matters; to make provision relating to gas meters and electricity meters and provision relating to electricity safety; to make provision about the security of equipment, software and information relating to nuclear matters; and for connected purposes.

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Overview

This amendment to the Energy Bill introduces a new clause allowing the Secretary of State to modify electricity licenses to create a scheme of financial incentives for small-scale, low-carbon electricity generation. This involves payments to generators and potentially levies on suppliers, aiming to boost renewable energy.

Description

Key Provisions

The amendment grants the Secretary of State the power to modify conditions within existing electricity licenses (under the Electricity Act 1989). This power will be used to establish a financial incentive scheme for small-scale, low-carbon electricity generation (defined as using specified renewable energy sources with capacity not exceeding 5 megawatts). The scheme may include payments to generators from suppliers or a central authority, with payment levels potentially decreasing yearly. It also allows for levies on electricity suppliers or distributors and payments to them from the authority. The Secretary of State can adjust the list of eligible renewable energy sources and define the details of the scheme, including circumstances where payments are reduced or recovered.

Eligible Technologies

The eligible low-carbon technologies include biomass, biofuels, fuel cells, photovoltaics, water (including waves and tides), wind, solar power, geothermal sources, and combined heat and power systems (under 50 kilowatts).

Authority

The Gas and Electricity Markets Authority (Authority) plays a key role in administering the scheme's financial aspects, such as calculating levies and making payments.

Government Spending

The amendment does not specify exact figures for government spending. The financial impact will depend on the specifics of the incentive scheme designed by the Secretary of State, including payment levels, the number of small-scale generators participating, and the levies imposed on suppliers.

Groups Affected

Small-scale low-carbon electricity generators: Will potentially receive payments under the scheme, incentivizing renewable energy production.
Electricity suppliers and distributors: May be required to make payments to generators or pay levies to the Authority, potentially affecting their profitability.
Gas and Electricity Markets Authority (Authority): Will have a significant administrative role in the scheme's implementation.
Consumers: May indirectly experience the effects through electricity prices, which may be influenced by the scheme's costs.

Full Text

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