Energy Act 2023

Part 3 Heat network authorisations

Prohibition from carrying on regulated activity

12 (1) The regulations may prohibit a person from carrying on a regulated activity, except as permitted by virtue of an authorisation conferred under regulations made by virtue of paragraph 13.

(2) In this paragraph, “regulated activity” means an activity relating to a relevant heat network of such description as may be specified in the regulations.

Heat network authorisations

13 (1) The regulations may provide for the Regulator to confer authorisations (“heat network authorisations”) to carry on one or more regulated activities specified in the authorisation in relation to a particular relevant heat network.

(2) The regulations may require a person who applies for a heat network authorisation—

(a) to satisfy such conditions relating to the person, the regulated activity or activities in question or the relevant heat network in question as the regulations may specify, and

(b) to provide such information as the regulations may specify.

(3) The regulations may provide for the Regulator—

(a) to confer a heat network authorisation;

(b) to confer a heat network authorisation on a temporary basis;

(c) to refuse to confer a heat network authorisation.

(4) The regulations may make provision about the procedure for applying for a heat network authorisation, including provision about—

(a) the form and content of an application,

(b) the manner in which the application and any accompanying documents are to be submitted to the Regulator;

(c) the payment of a fee.

(5) Regulations made in relation to England and Wales and Scotland by virtue of sub-paragraph (2)(b) or (4) may provide for the Regulator to make provision by regulations about the matters referred to in that sub-paragraph.

(6) Regulations made by the Regulator by virtue of sub-paragraph (5) are to be made by statutory instrument.

(7) The regulations may make provision as to the period for which an authorisation may be in force.

14 (1) The regulations may make provision about the conditions to be included in heat network authorisations.

(2) The regulations may, in particular—

(a) provide for the Regulator to determine and publish conditions to be included in each heat network authorisation or in each heat network authorisation of a particular description;

(b) provide for the Secretary of State or, in relation to Northern Ireland, the Department to determine and publish conditions to be included in each heat network authorisation or in each heat network authorisation of a particular description;

(c) provide for consultation on, and publication of, the conditions proposed to be so determined;

(d) make provision about the inclusion in a heat network authorisation of conditions that are special to that authorisation;

(e) make provision about including conditions that meet objectives or other criteria specified in the regulations.

(3) The regulations may, in particular, provide for conditions to be included in a heat network authorisation requiring the person who holds the authorisation—

(a) to comply with the provisions of a particular designated document;

(b) to enter into governance arrangements with the person who is from time to time the licensed code manager for that designated document and to comply with those arrangements;

(c) to provide funding for the person who is from time to time the licensed code manager for that designated document.

(4) The regulations may, in particular, provide for the following sorts of conditions to be included in a heat network authorisation—

(a) conditions about the terms on which premises are connected to a relevant heat network (whether for the purpose of supplying heating, cooling or hot water to premises, or supplying thermal energy to a relevant heat network);

(b) conditions about installing and maintaining equipment for measuring, displaying, recording and regulating consumption of heating, cooling and hot water supplied by means of relevant heat networks;

(c) conditions about—

(i) the charges payable by heat network consumers or a description of heat network consumers specified in the regulations,

(ii) the billing of heat network consumers;

(iii) service standards, or

(iv) the communication of information about the heat network, the services provided or the terms on which the services are provided;

(d) conditions relating to price regulation (including by means of regulation of charges or profits);

(e) conditions about complying with technical standards (including, in relation to England and Wales and Scotland, technical standards for which provision is made in a designated document);

(f) conditions about ensuring the continuity of the supply of heating, cooling and hot water to heat network consumers;

(g) conditions about limiting emissions of targeted greenhouse gases in relation to relevant heat networks in England or Northern Ireland;

(h) conditions about providing information to the Regulator;

(i) conditions about the payment of fees to the Regulator, including conditions about the payment of fees—

(i) in connection with the conferring of an authorisation;

(ii) while an authorisation continues to be in force in relation to a person;

(j) conditions about making payments to the Regulator of sums relating to the costs of the Regulator under regulations made by virtue of paragraph 46(2).

(5) Conditions of the sort referred to in sub-paragraph (4)(c)(i) may, in particular—

(a) provide for charges imposed on heat network consumers to be subject to a price cap;

(b) require a person who holds a heat network authorisation not to impose on heat network consumers charges that are disproportionate (see paragraph 42).

(6) Conditions of the sort referred to in sub-paragraph (4)(c)(ii) may, in particular—

(a) impose requirements about the bills given to heat network consumers (including requirements about their frequency, accuracy and the use of estimates);

(b) impose requirements about the information and explanatory material to be provided to heat network consumers;

(c) make provision about the charges that may be made in respect of the costs of providing bills and such information and explanatory material.

(7) The regulations may, in particular, provide for conditions to be included in a heat network authorisation that—

(a) in relation to England and Wales or Scotland, impose on the person who holds the authorisation a requirement of a kind that may be imposed under section 7(3) of the Electricity Act 1989 on the holder of a licence under section 6(1) of that Act;

(b) in relation to Northern Ireland, impose on the person who holds the authorisation a requirement of a kind that may be imposed under Article 11(3) of the Electricity (Northern Ireland) Order 1992 (S.I. 1992/231 (N.I. 1)) on the holder of a licence under Article 10(1) of that Order.

Conditions about technical standards: further provision

15 The technical standards for which regulations made by virtue of paragraph 14(4)(e) may make provision include technical standards relating to—

(a) the design, construction, commissioning, operation or maintenance of a heat network;

(b) the decommissioning of a heat network;

(c) equipment or materials used in the construction, operation or maintenance of a heat network;

(d) the competence of persons engaged in the design, construction, commissioning, operation or maintenance of a heat network.

Conditions about continuity of supply: further provision

16 Conditions of the sort referred to in paragraph 14(4)(f) may, in particular, require the holder of a heat network authorisation to enter into and maintain contractual arrangements under which, in circumstances of a description specified in the conditions, one or more other persons are under an obligation to secure the continuity of the supply of heating, cooling or hot water.

17 Conditions of the sort referred to in paragraph 14(4)(f) may, in particular, require the holder of a heat network authorisation, when directed to do so by the Regulator in circumstances of a description specified in the conditions, to carry on a regulated activity in relation to a relevant heat network in the place of another person (see paragraph 44).

Modification of heat network authorisations

18 (1) The regulations may provide for the modification by the Regulator of—

(a) the conditions of a particular heat network authorisation;

(b) conditions that are included in two or more heat network authorisations.

(2) Regulations made by virtue of sub-paragraph (1) may, in particular—

(a) provide for the procedure to be followed by the Regulator when it proposes to make a modification;

(b) provide for the communication of any modification;

(c) provide for the time when any modification takes effect;

(d) provide for the Regulator to comply with a direction of the Secretary of State or, in relation to Northern Ireland, the Department not to make a particular modification.

(3) In sub-paragraphs (1) and (2), a reference to the modification of a condition includes a reference to the revocation of a condition.

(4) The regulations may provide for the conditions of a heat network authorisation—

(a) to have effect or cease to have effect at such times and in such circumstances as may be determined by or under the conditions;

(b) to be modified in such manner as may be specified in the conditions at such times and in such circumstances as may be so determined.

Review and revocation of heat network authorisations

19 The regulations may provide for the conditions of, or the activities carried out by virtue of, a heat network authorisation to be reviewed by the Regulator at any time while it is in force.

20 (1) The regulations may provide—

(a) for the revocation of a heat network authorisation by the Regulator;

(b) for a heat network authorisation to cease to have effect in circumstances specified in or determined under the authorisation.

(2) Regulations made by virtue of sub-paragraph (1)(a) may, in particular, provide for the procedure to be followed by the Regulator when it proposes to revoke the authorisation.

Initial period

21 (1) The regulations may make provision with respect to persons carrying on a regulated activity in relation to a relevant heat network during a period that—

(a) begins with the day on which any regulations made by virtue of paragraph 12 come into force, and

(b) ends with a day specified in the regulations.

(2) The regulations may—

(a) provide for the period to be prolonged, or to be prolonged as it relates to a description of heat network authorisations, by the Regulator;

(b) require the consent of the Secretary of State or the Department (as the case may be) to such an alteration.

(3) Regulations made by virtue of sub-paragraph (1) may—

(a) provide for a person carrying on a regulated activity in relation to a relevant heat network to be treated as holding a heat network authorisation in relation to that activity and that relevant heat network during the period described in sub-paragraph (1) (or, if applicable, during that period as prolonged by virtue of sub-paragraph (2));

(b) make provision as to the conditions of the heat network authorisation treated as conferred on such a person (including provision similar to the provision described in paragraph 14(2));

(c) require a person carrying on a regulated activity in relation to a relevant heat network to apply to the Regulator for a heat network authorisation to be conferred on the person by a time specified in or determined under the regulations.

(4) Regulations made by virtue of sub-paragraph (3)(c) may provide for different times for different descriptions of case.