Infrastructure Act 2015

Infrastructure Act 2015

2015 CHAPTER 7

Commentary on Sections

Part 6 – Energy

Renewable Heat Incentives

Section 51: Renewable Heat Incentives

294. Subsections (1)-(4) amend section 100 of the Energy Act 2008, which contains a power to make regulations establishing schemes to facilitate and encourage renewable generation of heat.

295. Subsection (2) inserts new subsections (1A) and (1B) into section 100, allowing for regulations made under the section to confer functions on any person (and for that function to be exercisable on behalf of another person). Along with the amendments made by subsection (3), this means that regulations can now appoint and give functions in the regulations to any person or persons to administer the schemes, whereas previously these roles were limited to the Secretary of State or the Gas and Electricity Markets Authority (“the Authority”).

296. Subsection (3)(a) and (c) amend subsection (2) of section 100 to allow for regulations to cater for the assignment of payments under schemes. Subsection (3)(a) amends section 100(2)(a) so that that paragraph now sets out the power to provide in regulations for an entitlement to receive payments, and not additionally an obligation to make those payments. The amendment does not change who is entitled to receive payments. This remains as the owner of a renewable heat installation; the producer of biogas or biomethane; or the producer of biofuel for the generation of heat.

297. Subsection (3)(c) inserts new paragraphs (ba) and (bb) into subsection (2) of section 100. The new (ba) specifies that regulations can make provision about the circumstances in which, and descriptions of persons to whom, the whole or a part of an entitlement to payments under the schemes may be assigned. The new (bb) replaces the wording that was in (a), and allows for the regulations to provide for payments to be made (by the Secretary of State, the Authority, any other person administering a scheme or a designated fossil fuel supplier) to persons entitled to receive payments, or to whom those entitlements have been assigned. This could allow, for example, the owner of a heat generating installation to assign his payments to a person providing finance for the installation and for payments to be made directly to that person. Paragraphs (b) and (d) of subsection (3) make consequential amendment because of the new defined term “RHI payment” introduced in paragraph (a).

298. Subsection (3)(e) substitutes paragraph (d) of section 100(2) so that regulations can authorise or require a person to provide specified information. This could be used in the context of changes to the arrangements for the administration of the scheme, such as providing for information flows between these administrators.

299. Subsections (3)(f) to (h) make amendments to section 100 as a consequence of the new subsection (1A).

300. Subsection (3)(i) inserts two new paragraphs into subsection (2) of section 100. The new paragraph (j) means that regulations can authorise the Secretary of State to make payments to any person with respect to administration of the RHI schemes. The new paragraph (k) makes clear that the regulations can include provision about the resolution of disputes including by arbitration or appeal. This could allow for the regulations to include a right of appeal to a court or tribunal. The paragraph makes clear that an appeal or arbitration could result in an order for the payment of costs or compensation.

301. Subsection (4) amends subsection (3) of section 100 to include a definition of “other administrative function” within the new paragraph (bb).

302. Subsection (5) to (8) introduce changes to the Parliamentary control of RHI subordinate legislation contained in section 105 of the Energy Act 2008.

303. Subsection (6)(a) omits section 105(2)(a)(vi) and thereby removes the existing requirement that all regulations under section 100 are subject to the affirmative resolution procedure.

304. Subsection (6)(b) inserts a new paragraph (ab) in subsection (2) of section 105 setting out that renewable heat incentive regulations made under section 100 will be subject to the affirmative resolution process if they contain ‘affirmative resolution provision’, which is defined in the new subsections (3A) to (3I) in section 105 inserted by subsection (8).

305. The new subsection (3A) defines affirmative resolution provision as provision made under a power which always attracts the affirmative resolution procedure (described in new subsection (3B)), or which is not made under one of those powers and meets any of the conditions A to D described in new subsections (3C) to (3F).

306. The new subsection (3B) ensures that use of the following powers will always be subject to the affirmative procedure:

• Section 100(2)(c), (e), (f), (g), (h) or (k) which cover enforcement, sanctions and appeals, and levies on fossil fuel suppliers;

• Section 100(5) which allows for regulations to amend the definitions of biomass or biogas in subsection (3) and the list of sources of energy and technologies in subsection (4) of section 100; and

• Section 100(6) which allows for provision in regulations to be made, for the purposes of subsection (2)(a)(iii) and the definition of “fossil fuel supplier”, specifying that particular activities do or do not constitute generating heat.

307. The new subsection (3C) contains condition A. This ensures that where provision is made under section 100(2)(bb) for RHI payments to be made by fossil fuel suppliers, the affirmative procedure is used.

308. The new subsection (3D) contains condition B. This ensures that the first provision in each RHI scheme which confers an administration function on someone other than the Secretary of State or the Authority will be subject to the affirmative resolution procedure.

309. The new subsection (3E) contains condition C, which only applies to the two RHI schemes which are in existence when the subsection comes into force. This ensures that the first provision in each of those RHI schemes, which is made under section 100(2)(ba) or (bb)(ii) – and which concern the assignment of the entitlement to RHI payments, and the payment of such assigned payments – will be subject to the affirmative resolution procedure.

310. The new subsection (3F) contains condition D, which only applies to new RHI schemes made after the subsection comes into force. This ensures that the first use of each of paragraphs (a) (entitlement to RHI payments), (b) (calculation of payments), (ba) (assignment of entitlement), (bb) (requirements to pay), (d) (provision of information) or (j) (making payments to administrators) of section 100(2) in each such RHI scheme is subject to the affirmative resolution procedure.

311. The new subsection (3G) ensures that payment functions conferred on a fossil fuel supplier will not count as administrative functions conferred on someone other than the Secretary of State or the Authority for the purposes of condition B.

312. The new subsection (3H) provides that a provision made under any of the powers listed in (3A) to (3F) is still counted for the purposes of those subsections as being made under the power, even if it is also made under section 100(1), (1A) or (1B).

313. The new subsection (3I) defines the terms: administration function; designated fossil fuel supplier; payment function; and RHI scheme for use within new subsections (3B) to (3H).

314. Subsection (9) amends section 105 of the Utilities Act 2000. That section contains restrictions on the disclosure of information, including information gained through an RHI scheme. The new provision inserted as paragraph (aa) in subsection (3) of section 105 exempts from the restriction on disclosure any disclosure made for the purpose of facilitating the functions of any person under section 100 of the Energy Act 2008.