Energy Act 2013

Energy Act 2013

2013 CHAPTER 32

Commentary on Sections

Part 2: Electricity Market Reform

Chapter 6: Access to markets etc

Section 49: Power to modify licence conditions etc: market participation and liquidity

257. This section enables the Secretary of State to modify electricity generation and supply licences and to amend electricity industry codes to facilitate participation and promote liquidity in the wholesale electricity market.

258. Subsection (1) allows the Secretary of State to modify the conditions of particular electricity generation and supply licences and the standard conditions contained in such licences and to amend electricity industry codes (such as the Balancing and Settlement Code), which are documents maintained in accordance with the conditions of such licences, and agreements that give effect to industry codes.

259. Subsection (2) sets out the purposes for which the Secretary of State may use the modification power, these being to:

• facilitate participation in the wholesale electricity market in Great Britain, both by licence holders and others (such as exempt suppliers and generators); and

• promote liquidity in that market.

260. Subsection (3) sets out a non-exhaustive list of the types of licence modification that the Secretary of State may choose to make when exercising the powers in subsection (1). These include:

• imposing obligations on electricity generators or suppliers to either sell or purchase electricity, including obligations to sell or purchase electricity on certain terms or in particular circumstances (such as a requirement to sell a proportion of electricity on a particular exchange or to sell particular products at particular times);

• restrictions on generators and suppliers selling or purchasing electricity to or from their group undertakings; and

• imposing obligations to disclose or publish information (such as information about transactions in the wholesale electricity market).

261. Subsection (4) provides additional clarification on the types of transactions that may be subject to the restrictions referred to in subsection (3)(b).