Explanatory Note
(This note is not part of the Order)
This Order, which extends to Great Britain, establishes the energy efficiency obligations for certain gas or electricity suppliers for the period 1st April 2005 to 31st March 2008. These are the successors to the energy efficiency obligations established under the Electricity and Gas (Energy Efficiency Obligations) Order 2001 (S.I 2001/4011, as amended) for the period 1st April 2002 to 31st March 2005.
The Order sets an overall target of 130 fuel-standardised, lifetime-discounted terawatt hours for the promotion of improvements in energy efficiency in relation to domestic consumers for the purposes of the exercise by the Gas and Electricity Markets Authority (“the Authority”) of its functions under this Order (article 2).
The Authority must determine, by reference to the overall target, energy efficiency targets to be met by 31st March 2008 by suppliers who supply at least 50,000 domestic customers on a relevant date, and may amend such targets annually by reference to specified criteria (article 4).
Energy efficiency targets must be met by improvements in energy efficiency resulting from qualifying actions approved by the Authority in advance and notified by the supplier after being taken (article 5). The Order provides for the Authority to determine the improvements in energy efficiency to be attributed to qualifying actions, and makes special provision in respect of the attribution of higher improvements to energy service actions and innovative actions (article 6).
The Authority may consent to targets being transferred between suppliers and to actions taken by one supplier counting towards the achievement of another supplier’s target (article 7). For each supplier, 50% of the total improvements in energy efficiency resulting from qualifying actions must be achieved in relation to domestic consumers in receipt of specified benefits or credits (article 3 and Schedule).
The Order also makes provision in relation to the provision by suppliers of information at the request of the Authority (article 8) and the submission by the Authority of an annual report to the Secretary of State (article 9).
Failure by a supplier to comply with a requirement imposed under this Order may lead to the imposition of financial penalties under section 30A of the Gas Act 1986 or section 27A of the Electricity Act 1989 (article 10).
A regulatory impact assessment has been prepared in respect of these Regulations, and copies can be obtained from the Sustainable Energy Policy Division, Department for Environment, Food and Rural Affairs, Ashdown House, 123 Victoria Street, London SW1E 6DE.