The Electricity (Non-Fossil Fuel Sources) (England and Wales) Order 1998

Citation and commencement

1.—(1) This Order may be cited as the Electricity (Non-Fossil Fuel Sources) (England and Wales) Order 1998 and shall come into force on 28th September 1998.

(2) This Order does not apply to Scotland.

Interpretation

2.—(1) In this Order–

“the Act” means the Electricity Act 1989;

“commissioning process” means the process consisting of such procedures and tests as from time to time constitute usual industry standards and practices for commissioning a non-fossil fuel generating station of any description specified in Schedule 1 or any generating set forming part of such station in order–

(a)

to demonstrate that such a non-fossil fuel generating station or set is–

(i)

capable of commercial operation; or

(ii)

in the case of a non-fossil fuel generating station which is the subject of relevant arrangements, capable of commercial operation for the purpose of such arrangements;

(b)

to establish the external physical conditions outside the control of the operator which are necessary for the operation of such station or set or which control the amount of electricity produced by the station or set; and

(c)

to establish the operating parameters within which such station or set can be operated in accordance with practices, methods and procedures which are or should be adopted by a person exercising that degree of judgment, skill, diligence and foresight which would ordinarily and reasonably be expected from a skilled and experienced operator engaged in the business of operating such a station or set lawfully;

“connected person”, in relation to any person, means a person connected to him within the meaning of section 839 of the Income and Corporation Taxes Act 1988(1);

“dry-weight basis” means the basis for calculating the weight of each fuel component by deducting from its weight the weight of any water in that fuel component that would be removed by heating it to a temperature of 120 °C for a period of not less than 30 minutes;

“energy content” of a fuel means the gross calorific value of that fuel (as expressed by weight or by volume) multiplied by the weight or volume of that fuel;

“generating set” means–

(a)

where it forms part of a landfill gas generating station, a prime mover and alternator;

(b)

where it forms part of a municipal and industrial waste generating station or a municipal and industrial waste with combined heat and power generating station, steam raising or equivalent plant, a prime mover and alternator; or

(c)

where it forms part of an on-shore wind generating station, a wind turbine, including an alternator and any tower on which they are supported together with its foundations;

“industrial waste” includes sawmill waste derived from sawmills located on permanent sites and food-processing waste;

“operator” means an operator of any relevant non-fossil fuel generating station;

“Order period” means the period from 25th November 1997 to 29th November 2018;

“the pooling and settlement agreement” means the pooling and settlement agreement to which an operator may be required to become a party by a licence granted to him under section 6 of the Act;

“premium price” means a fixed price per kilowatt-hour (kWh) and for this purpose–

(a)

where the operator of a generating station is a party to the pooling and settlement agreement, an arrangement between that operator and a public electricity supplier or person on behalf of a public electricity supplier shall be treated as if it is an arrangement to purchase electricity at a fixed price per kilowatt-hour (kWh) if it provides for such payments to be made by either party to the other as shall ensure that the aggregate price receivable by that operator under the arrangement and the pooling and settlement agreement for electricity generated in specified periods is equal to a fixed amount specified in the said arrangement; and

(b)

any provision for adjustment of the price by reference to any measure of inflation shall be disregarded;

“premium price arrangement” means an arrangement made before the day on which this Order is made under which a public electricity supplier or a person on behalf of a public electricity supplier agrees to purchase electricity generated by a non-fossil fuel generating station at any time in the period commencing on 21st July 1993 and ending on 30th December 2016 (whether or not the arrangement covers other periods) for a premium price;

“relevant arrangements” means arrangements evidence of the making of which is produced to the Director in accordance with article 3(1);

“relevant non-fossil fuel generating station” means a generating station of a description specified in Schedule 1 and falling within the description of non-fossil fuel generating station specified in article 3(2).

(2) Where a definition in Schedule 1 refers to generating stations which are fuelled wholly by a particular non-fossil fuel or fuels, this includes generating stations which use fossil fuel for one or more of the following purposes–

(a) the ignition of gases of low or variable calorific value;

(b) the heating of the combustion system to its normal operating temperature or the maintenance of that temperature;

(c) emission control;

provided that, in any period shown in Tables A to F in Schedule 1, the energy content of the fossil fuel used in the generating station does not exceed 10 per cent. of the energy content of all the fuel used.

(3) Where a definition in Schedule 1 refers to generating stations which are fuelled partly by a particular non-fossil fuel or fuels, this includes dual-fired projects and for this purpose “dual-fired projects” means ones where the balance of fuel is–

(a) fossil fuel;

(b) non-fossil fuel which is neither expressly included in that definition nor expressly excluded by that definition; or

(c) a combination of the fuel mentioned in sub-paragraphs (a) and (b) above.

Requirement to make arrangements etc.

3.—(1) Each public electricity supplier in England and Wales shall before 1st November 1998 make, in so far as he has not already done so, and produce to the Director evidence showing that he has made such additional arrangements as will secure that for each period shown in Tables A to F in Schedule 1 the aggregate amount of generating capacity available to him from non-fossil fuel generating stations of the description specified in relation to each particular Table and falling within the description of non-fossil fuel generating station specified in paragraph (2) below will not be less than the amount specified in that Table in relation to him for that period.

(2) The description of non-fossil fuel generating station specified in this paragraph is one which either–

(a) in the case of a hydro generating station, is a station in respect of which–

(i) the commissioning process was not satisfactorily completed before 25th November 1997, except that the station may include structures or works for holding or channelling water which were completed before that date, provided they have not been used for a purpose directly related to the generation of electricity in the period commencing on 1st January 1989 and ending on 24th November 1997;

(ii) there is not and has not been a premium price arrangement (other than a relevant arrangement) under which any payment has been or may be made in respect of electricity generated before 30th December 2016 by such station; and

(iii) the commissioning and operation of which has not caused and would not be likely to cause during the Order period, in relation to any other generating station driven wholly or mainly by water and which was in operation on 25th November 1997, either a significant reduction in the amount of electricity which is capable of being generated by such other generating station or such other generating station to cease to operate; or

(b) in the case of any other non-fossil fuel generating station, must have one or more generating sets all of which fulfil the following conditions–

(i) the generating set must be new, that is to say not previously used, save in the case of a generating set which forms part of a landfill gas generating station where, if the generating set is not new it must, in the opinion of an independent consulting engineer, be likely to have a useful life (provided that the generating set is installed, commissioned, maintained and operated in accordance with the manufacturer’s recommendations) of at least 15 years from its date of commissioning as part of the generating station; and

(ii) the commissioning and operation of the generating set has not caused and must not be likely to cause during the Order period, in relation to any other generating set fuelled or driven by a non-fossil fuel (other than water) which was in operation on 25th November 1997, either a significant reduction in the amount of electricity which is capable of being generated by such other generating set or such other generating set to cease to operate.

4.—(1) Where–

(a) any relevant arrangements provide that the availability to a public electricity supplier of some or all of the capacity of a non-fossil fuel generating station is conditional upon the satisfaction of any requirement mentioned in Schedule 2 (conditions precedent) (whether the requirement is described in the terms of that Schedule or in terms to the like effect); and

(b) on the first day of any specified period, some or all of that capacity is not available to the supplier, by reason of any such requirement not being satisfied as was then due, or had previously been due on or prior to such date, under those arrangements to have been satisfied,

then, in relation to any day during that or any subsequent specified period ascertained in accordance with paragraph (3) below, this Order shall have effect as if the relevant aggregate amount specified in relation to that period were the amount specified in relation to that supplier for the period which includes that day in the Table in question in Schedule 1, less (subject to the following proviso) an amount equal to the sum of any capacity whose availability is at that time conditional upon the satisfaction of such requirement or requirements and any capacity which has ceased to be available at that time by reason of the occurrence of any such event or events as are referred to in paragraph (2) below:

• Provided that the amount so specified shall not be reduced so as to be less than the relevant aggregate amount actually available to that supplier under the relevant arrangements during that specified period.

(2) Where–

(a) any relevant arrangements provide that some or all of the generating capacity to be made available under those arrangements may reduce or cease to be available to a public electricity supplier following the occurrence of any such event as is mentioned in Schedule 3 (termination events) (whether the event is described in the terms of that Schedule or in terms to the like effect); and

(b) some or all of that capacity is not available to the supplier, on a day during a specified period, because such an event has occurred,

the specified period shall forthwith terminate and, in relation to any day during any subsequent specified period ascertained in accordance with paragraph (3) below, this Order shall have effect as if the relevant aggregate amount specified in relation to that subsequent period were the amount specified in relation to that supplier for the period which includes that day in the Table in question in Schedule 1, less an amount equal to the sum of any capacity which has ceased to be available at that time by reason of the occurrence of any such event or events and any capacity whose availability is at that time conditional upon the satisfaction of any such requirement or requirements as are referred to in paragraph (1) above, but subject to the proviso contained in that paragraph.

(3) In this article “specified period” means, in relation to any public electricity supplier, a period commencing and ending on the dates specified in a Table in Schedule 1 but so that–

(a) on any such day as is mentioned in paragraph (1)(b) above there shall be substituted, in place of any specified period that would otherwise have commenced on that day, a period commencing on such day and expiring (subject to sub-paragraphs (c) and (d) below) on the day on which the requirement mentioned in paragraph (1)(b) above is satisfied either wholly or in part;

(b) upon the expiry of any specified period ascertained in accordance with this sub-paragraph or with sub-paragraph (a) above, the next specified period shall commence on the following day and shall continue, subject to sub-paragraphs (c) and (d) below, until the day on which the requirement mentioned in paragraph (1)(b) above is either wholly satisfied or further satisfied in part;

(c) on any such day as is mentioned in paragraph (2)(b) above, the then current specified period shall forthwith terminate and shall be followed by a new period commencing immediately upon such termination; and

(d) any specified period which is current on any of the period end dates specified in the Table shall expire on that date.

John Battle,

Minister for Energy and Industry,

Department of Trade and Industry

23rd September 1998