Overview

This amendment to the Energy Bill introduces a new clause enabling the Secretary of State to create a scheme offering financial incentives for small-scale, low-carbon electricity generation. This will involve modifying existing electricity licenses to include payments to generators and potentially levies on suppliers.

Description

Purpose

The amendment aims to promote small-scale renewable energy production by establishing a feed-in tariff system. This system will provide financial incentives to individuals and businesses generating electricity from renewable sources.

Mechanism

The Secretary of State gains the power to alter existing electricity licenses (distribution and supply) to incorporate this scheme. This includes setting payment rates for small-scale low-carbon generators (using renewable sources such as wind, solar, and biomass), defining calculation methods, and potentially introducing levies on electricity suppliers. The maximum capacity of eligible generation is increased from 3 megawatts to 5 megawatts.

Renewable Energy Sources

Eligible renewable sources include biomass, biofuels, fuel cells, photovoltaics, water (including waves and tides), wind, solar power, geothermal sources, and combined heat and power systems (with a capacity of 50 kilowatts or less). The Secretary of State can modify this list via order.

Administration

The Gas and Electricity Markets Authority ("Authority") will play a role in administering the scheme, potentially collecting levies from suppliers and distributing payments to generators.

Government Spending

The amendment does not specify the exact cost to the government. The financial burden will depend on the level of payments set to small-scale low-carbon generators and the number of participants in the scheme. The government may also incur administrative costs associated with overseeing and regulating the scheme.

Groups Affected

• Small-scale low-carbon electricity generators: Will potentially receive payments for the electricity they generate, encouraging investment in renewable energy projects.
• Electricity suppliers: May be required to make payments to generators or pay a levy to the Authority, potentially increasing their costs.
• Gas and Electricity Markets Authority: Will be involved in administering the scheme, potentially increasing its workload and responsibilities.
• Consumers: May indirectly see an impact on their electricity bills, either through increased costs (due to levies on suppliers) or through decreased costs (due to increased renewable energy generation).

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