PART 2Electricity Market Reform
CHAPTER 6Access to markets etc
Power purchase agreement scheme
50Power to modify licence conditions etc to facilitate investment in electricity generation
1
The Secretary of State may modify—
a
a condition of a particular licence under section 6(1)(d) of EA 1989 (supply licences);
b
the standard conditions incorporated in licences under that provision by virtue of section 8A of that Act;
c
a document maintained in accordance with the conditions of licences under section 6(1)(d) of that Act, or an agreement that gives effect to a document so maintained.
2
The Secretary of State may exercise the power in subsection (1) only for the purpose of facilitating investment in electricity generation by means of a power purchase agreement scheme.
3
For the purposes of this section and section 51—
a
a power purchase agreement scheme is a scheme established by supply licence conditions and regulations under section 51 for promoting the availability to electricity generators of power purchase agreements, and
b
“power purchase agreement” means an arrangement under which a licensed supplier agrees to purchase electricity generated by an electricity generator at a discount to a prevailing market price.
For this purpose, “supply licence condition” means any condition, document or agreement of a kind mentioned in subsection (1).
4
Provision that may be made under subsection (1) in relation to a power purchase agreement scheme includes provision—
a
as to the eligibility of an electricity generator to enter into a power purchase agreement under the scheme;
b
as to the terms of any power purchase agreement to be entered into under the scheme, including provision—
i
for determining the price at which electricity is to be purchased under the agreement (including provision for determining a market price and the amount of a discount at any time);
ii
as to the duration of any such agreement;
c
as to the circumstances in which a licensed supplier is or may be required or permitted to enter, or offer to enter, into a power purchase agreement under the scheme;
d
for the provision of information in connection with the scheme.
5
Provision within subsection (4)(c) includes provision for determining which licensed supplier or suppliers is or are to be required or permitted to enter, or offer to enter, into a power purchase agreement with an electricity generator in any particular case.
6
Such provision may in particular include provision for the licensed supplier or suppliers in question to be determined—
a
by a process involving a determination or determinations by one or more of the following—
i
the Secretary of State;
ii
the Authority;
iii
the electricity generator;
b
by auction or other competitive process;
and provision that may be made by virtue of paragraph (b) includes provision as to the circumstances in which a licensed supplier is or may be required or permitted to participate in an auction or other process.
7
For the purposes of this section and section 51, “licensed supplier” means the holder of a licence under section 6(1)(d) of EA 1989.