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Statutory Instruments of the Scottish Parliament


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SCOTTISH STATUTORY INSTRUMENT


2006 No. 173

ELECTRICITY

The Renewables Obligation (Scotland) Order 2006

  Made 20th March 2006 
  Coming into force 1st April 2006 


ARRANGEMENT OF ARTICLES


PART 1

Introductory Provisions
1. Citation, commencement and extent
2. Interpretation

PART 2

The Renewables Obligation
3. The renewables obligation
4. The amount of the renewables obligation

PART 3

Electricity from Renewable Energy Sources
5. Eligible renewable sources: general
6. Eligible renewable sources: qualifying arrangement
7. Eligible renewable sources: other fuels
8. Eligible renewable sources: supplemental
9. Calculation of amount of electricity generated from eligible renewable sources
10. Calculation of amount of electricity supplied to customers

PART 4

Alternative Ways of Discharging Renewables Obligation
11. Alternative way of discharging renewables obligation: payments
12. Alternative way of discharging renewables obligation: NIROCs
13. Alternative way of discharging renewables obligation: certificates certifying the matters in section 32B(2A) of the Act
14. Further provision in relation to production of certificates and NIROCs

PART 5

SROCs: Issue and Revocation
15. Obligation to issue SROCs
16. Criteria for issue of SROCs
17. Criteria for issue of SROCs: supplemental
18. Procedure and calculations for issue of SROCs
19. SROC Register
20. Revocation of SROCs
21. Small generators

PART 6

Payments out of the Buy-Out Fund
22. Allocation of payments made under article 11

PART 7

Additional Payments
23. Late payments
24. Mutualisation: payments in
25. Mutualisation: payments out
26. Mutualisation: recalculations
27. Mutualisation: definitions and interpretation

PART 8

Provision of Information and Functions of the Authority
28. Provision of information to the Authority
29. Exchange of information with the Northern Ireland Authority
30. Functions of the Authority
31. Preliminary accreditation and accreditation of generating stations

PART 9

Revocation, Transitional and Savings
32. Revocation, transitional and savings

  SCHEDULE 1 — AMOUNT OF THE RENEWABLES OBLIGATION

  SCHEDULE 2 — THE REGISTER

  SCHEDULE 3 — CONDITIONS OF ELIGIBILITY FOR NIROCs

  SCHEDULE 4 — AMOUNT OF RELEVANT SHORTFALL FOR EACH OBLIGATION PERIOD

The Scottish Ministers in exercise of the powers conferred by sections 32 to 32C of the Electricity Act 1989[
1], and of all other powers enabling them in that behalf and having, in accordance with section 32(7) of that Act, consulted the Gas and Electricity Markets Authority, the Gas and Electricity Consumer Council, electricity suppliers to whom this Order applies, and such generators of electricity from renewable sources and other persons as they consider appropriate, hereby make the following Order, a draft of which has, in accordance with section 32(9) of that Act, been laid before and approved by resolution of the Scottish Parliament:



PART 1

Introductory Provisions

Citation, commencement and extent
     1. —(1) This Order may be cited as the Renewables Obligation (Scotland) Order 2006 and shall come into force on 1st April 2006.

    (2) This Order extends to Scotland only.

Interpretation
    
2. —(1) In this Order–

    (2) For the purposes of the definition of "hydro generating station", the "civil works" which are to be regarded as supplying a particular turbine ("the relevant turbine") are all the man-made weirs, man-made structures and man-made works for holding water which are located on the inlet side of the relevant turbine, but excluding any such weirs, structures or works which supply another turbine before water is supplied to the weirs, structures and works which supply the relevant turbine.

    (3) Any reference in this Order to the provision of information "in writing" shall include the provision of such information by electronic mail, facsimile or similar means which are capable of producing a document containing the text of any communication.

    (4) Unless the context otherwise requires any reference in this Order to a numbered article or Schedule is a reference to the article in or the Schedule to this Order bearing that number and any reference in an article or a Schedule to a numbered paragraph is a reference to the paragraph of that article or Schedule bearing that number.

    (5) Any reference in this Order to the supply of electricity shall, in respect of a supply made to customers in Northern Ireland, be construed in accordance with the definition of "supply" in article 3 of the Northern Ireland Electricity Order.



PART 2

The Renewables Obligation

The renewables obligation
     3. —(1) The renewables obligation is that, subject to Part 4, each designated electricity supplier shall before each specified day produce to the Authority evidence showing–

    (2) The evidence referred to in paragraph (1) is certificates issued by the Authority under section 32B(2) of the Act, provided that such certificates relate to electricity generated from eligible renewable sources.

    (3) A certificate referred to in paragraph (2) shall be regarded as produced to the Authority as the evidence or part of the evidence required under paragraph (1) in respect of an obligation period where before the specified day relating to that period the Authority receives from the designated electricity supplier which holds the certificate a notification in writing identifying the certificate to be produced for that purpose and, in the case of a SROC, the SROC identifier.

    (4) Without prejudice to paragraph (3), the Authority may draw up procedural guidelines for the production of certificates as the evidence or part of the evidence required under paragraph (1).

    (5) An electricity supplier has a renewables obligation in respect of an obligation period if it supplies electricity in Scotland at any time during that period regardless of whether it supplies electricity in Scotland for the whole of that period.

The amount of the renewables obligation
    
4. —(1) The amount of electricity referred to in article 3(1)(a), in respect of an obligation period, is such amount of electricity as equals the relevant percentage of all the electricity supplied by the designated electricity supplier to customers in Scotland during the obligation period (as determined pursuant to paragraph (3)), such amount being rounded to the nearest whole megawatt hour (with any exact half megawatt hour being rounded upwards).

    (2) In paragraph (1) "the relevant percentage" means, in respect of an obligation period, the percentage set out in the second column of Schedule 1 against the reference to that obligation period in the first column of Schedule 1.

    (3) For the purposes of paragraph (1) the amount of the electricity supplied by the designated electricity supplier to customers in Scotland during an obligation period is to be determined by reference to–

    (4) Each designated electricity supplier shall furnish to the Department of Trade and Industry and to the Authority, the estimated figures relating to its total sales of electricity to customers in Scotland during an obligation period by no later than 1st June immediately following the end of the obligation period.

    (5) Each designated electricity supplier shall by no later than 1st July immediately following the end of an obligation period, inform the Authority of–

    (6) In furnishing the information specified in paragraphs (4) and (5), the designated electricity supplier shall have regard to any sales figures, which it has provided (or intends to provide) to the Department of Trade and Industry for statistical purposes and publication in "Energy Trends"[17].



PART 3

Electricity from Renewable Energy Sources

Eligible renewable sources: general
     5. —(1) Subject to article 9, electricity shall be considered to have been generated from eligible renewable sources to the extent that it has been generated from renewable sources and provided that it has not been generated by an excluded generating station as specified in this article and articles 6 and 7.

    (2) The following shall be excluded generating stations–

    (3) A generating station shall not be an excluded generating station by virtue of paragraph (2)(b) in any month during which it is fuelled partly by fossil fuel and partly by biomass (and by no other fuel).

    (4) A generating station shall be an excluded generating station by virtue of paragraph (2)(b) in any month during which it is fuelled by biomass, if–

    (5) For the purposes of paragraph (2)(b), the main components of a generating station shall only be regarded as having been renewed since 31st December 1989 where–

Eligible renewable sources: qualifying arrangement
    
6. —(1) Paragraph (2) applies where–

    (2) Where this paragraph applies, a generating station–

shall be an excluded generating station.

    (3) Paragraph (4) applies where an extant qualifying arrangement ("the applicable qualifying arrangement") provides for the building of a generating station ("the specified station") at a specified location ("the location") and the specified station has not been commissioned.

    (4) Where this paragraph applies, a generating station–

shall be an excluded generating station.

    (5) Paragraphs (2) and (4) shall not apply to a generating station which during the month in question, generates only electricity which is sold pursuant to another extant qualifying arrangement.

    (6) In paragraphs (2) and (4), in relation to a person who is a party to the applicable qualifying arrangement ("the first person"), another person ("the second person") is a "linked person" where the second person has given or has arranged to give or has ensured or has arranged to ensure that the first person is given a financial or other inducement relating to any right or interest in, or in respect of, the construction or operation of a generating station at the location.

    (7) The references in paragraph (6) to the first person and the second person shall include any person who is a connected person in relation to either of them.

    (8) For the purposes of this article, a generating station shall be regarded as being situated at a location provided for by an extant qualifying arrangement whether it is situated wholly or partly at that location.

Eligible renewable sources: other fuels
    
7. —(1) A generating station shall be an excluded generating station in any month during which it is fuelled wholly or partly by waste unless–

    (2) A generating station shall be an excluded generating station in any month during which it is fuelled partly by fossil fuel and partly by another fuel (or fuels) other than biomass.

    (3) After 31st March 2009 a generating station which in any month is fuelled partly by fossil fuel and partly by biomass (and by no other fuel) shall be an excluded generating station during that month if, during that month, less than the specified percentage of the energy content of the biomass derives from energy crops.

    (4) In paragraph (3), "the specified percentage" means–

    (5) After 31st March 2016 a generating station shall be an excluded generating station in any month during which it is fuelled partly by fossil fuel and partly by biomass (and by no other fuel).

    (6) A generating station shall be an excluded generating station in any month during which it is fuelled wholly or partly by peat.

    (7) A generating station shall be an excluded generating station in any month during which it is fuelled wholly or partly by any substance derived directly or indirectly from any of the substances referred to in article 8(1)(a)(i) unless that substance is a substance falling within article 8(1)(a)(ii) or it is waste or a component of biomass.

    (8) A generating station shall be an excluded generating station in any month during which it is fuelled wholly or partly by waste where all the waste which is neither biomass nor liquids comprised wholly or mainly of hydrocarbon compounds is or is derived directly or indirectly from one or more of the substances referred to in article 8(1)(a)(i).

Eligible renewable sources: supplemental
    
8. —(1) In this article and articles 5, 7 and 14 and in Schedule 3–

    (2) In articles 5, 7 and 14 and in Schedule 3, in determining whether a generating station is fuelled by a particular fuel regard is to be had only to fuel which it uses to generate electricity.

    (3) For the purposes of articles 5, 7 and 14 and Schedule 3, fossil fuel or waste which a generating station uses for–

shall only be treated as comprising fuel used to generate electricity in any month in which the combined energy content of the fossil fuel or waste, or both, which the generating station uses for those purposes exceeds 10 per cent of the energy content of the energy sources by which it is fuelled.

Calculation of amount of electricity generated from eligible renewable sources
     9. —(1) Subject to paragraphs (3) and (5), the amount of electricity generated by a generating station which is to be regarded as having been generated from eligible renewable sources in any month is to be calculated by multiplying the renewable output of that generating station in that month by a proportion which is equal to the proportion which the net output of that generating station in that month bears to the gross output of that generating station in that month.

    (2) For the purposes of the calculation referred to in paragraph (1)–

    (3) In the case of a generating station fuelled wholly or partly by biomass, 10 per cent of the electricity generated from biomass in any month shall be treated as having been generated from fossil fuel unless the operator of the generating station satisfies the Authority that during that month a lesser percentage of the energy content of the biomass derives from fossil fuel, in which case that lesser percentage shall be treated as having been generated from fossil fuel.

    (4) In calculating "the renewable output" in the case of a generating station fuelled partly by fossil fuel and partly by another fuel or fuels the amount of electricity which has been generated from fossil fuel is to be determined according to the respective energy contents of the fuels used.

    (5) Where the operator of a generating station satisfies the Authority that in any month the input electricity of the generating station does not exceed 0.5 per cent of its gross output, no input electricity shall be deducted from the gross output in calculating the net output of the generating station for that month and, accordingly, the net output shall be equal to the gross output in that month.

    (6) In the case of a qualifying combined heat and power generating station, the renewable output shall be such amount as is obtained by–

    (7) In this article–

Calculation of amount of electricity supplied to customers
    
10. Where electricity generated from eligible renewable sources has been sold by the operator of the generating station to an electricity supplier (or to a Northern Ireland supplier, in the case of a generating station which may lawfully be supplied with electricity by a Northern Ireland supplier) and is then purchased from the electricity supplier (or, in the case as aforesaid, from the Northern Ireland supplier) and consumed by the operator of the generating station, such electricity shall be regarded as having been supplied by an electricity supplier (or, as the case may be, by a Northern Ireland supplier) to a customer.



PART 4

Alternative Ways of Discharging Renewables Obligation

Alternative way of discharging renewables obligation: payments
    
11. —(1) Instead of producing certificates pursuant to article 3, a designated electricity supplier may discharge (in whole or in part) its renewables obligation in relation to a particular obligation period by making a payment to the Authority before the specified day relating to that obligation period.

    (2) Subject to paragraphs (3) and (4), the payment to be made under paragraph (1) is £33.24 for each megawatt hour of electricity generated from eligible renewable sources for which the designated electricity supplier does not produce certificates pursuant to article 3 or article 13 or NIROCs pursuant to article 12 ("the buy-out price").

    (3) If, in the case of the calendar year 2006 or any subsequent calendar year, the annual retail prices index for that year ("the later year") is higher or lower than that for the previous year, the buy-out price relating to the obligation period beginning on the 1st April immediately following the later year shall be increased (if the index is higher) or decreased (if the index is lower) by the annual percentage inflation rate of the retail prices index for the later year.

    (4) When the buy-out price is calculated under paragraph (3) the result shall be rounded to the nearest penny (with any exact half of a penny being rounded upwards).

Alternative way of discharging renewables obligation: NIROCs
    
12. —(1) Subject to article 14, instead of producing certificates pursuant to article 3, a designated electricity supplier may discharge (in whole or in part) its renewables obligation in relation to a particular obligation period by producing to the Authority in accordance with this article eligible NIROCs issued in respect of electricity that has been supplied to customers during that obligation period.

    (2) A NIROC referred to in paragraph (1) shall be regarded as produced to the Authority in respect of an obligation period where, before the specified day relating to that period, the Authority receives, from the designated electricity supplier which is treated as holding the NIROC for the purposes of the NIRO Order under which it was issued, a notification in writing identifying the NIROC to be so produced and giving its NIROC identifier.

    (3) Without prejudice to paragraph (2), the Authority may draw up procedural guidelines for the production of NIROCs under this article.

Alternative way of discharging renewables obligation: certificates certifying the matters in section 32B(2A) of the Act
    
13. —(1) Subject to article 14, instead of producing certificates pursuant to article 3, a designated electricity supplier may discharge (in whole or in part) its renewables obligation in relation to a particular obligation period by producing to the Authority in accordance with this article certificates issued by the Authority and certifying the matters in section 32B(2A) of the Act, provided that such certificates relate to electricity generated from eligible renewable sources.

    (2) A certificate referred to in paragraph (1) shall be regarded as produced to the Authority in respect of an obligation period where, before the specified day relating to that period the Authority receives from the designated electricity supplier which holds the certificate, a notification in writing identifying the certificate to be produced for that purpose and, in the case of a SROC, the SROC identifier.

    (3) Without prejudice to paragraph (2), the Authority may draw up procedural guidelines for the production of certificates under this article.

Further provision in relation to production of certificates and NIROCs
    
14. —(1) A designated electricity supplier may discharge up to 25 per cent of its renewables obligation in respect of an obligation period by producing to the Authority certificates issued by the Authority under section 32B of the Act and eligible NIROCs relating to electricity supplied in the immediately preceding obligation period.

    (2) In respect of any obligation period which falls–

of a designated electricity supplier's renewables obligation may be satisfied by the production of certificates issued by the Authority under section 32B of the Act and eligible NIROCs issued in respect of generating stations which during the month to which a certificate or NIROC relates, have been fuelled partly by fossil fuel (as defined in article 8) and partly by biomass (and by no other fuel).

    (3) A designated electricity supplier shall not produce to the Authority a certificate issued under section 32B of the Act or a NIROC which has previously been or is simultaneously produced to the Northern Ireland Authority under a NIRO Order.



PART 5

SROCs: Issue and Revocation

Obligation to issue SROCs
    
15. —(1) Where each of the relevant criteria in article 16 has been met (having regard as necessary to the requirements in article 17), the Authority shall issue SROCs, in accordance with the procedure set out in article 18, in relation to a generating station in respect of each month of each obligation period in which electricity has been generated by the generating station from eligible renewable sources (whether or not for the whole of that month) to the persons specified below.

    (2) Except as provided for in paragraphs (3) to (5), SROCs shall be issued to the operator of the generating station by which the relevant electricity was generated in a particular month.

    (3) Where electricity is required to be generated by a generating station from eligible renewable sources under a qualifying arrangement or in compliance with such an arrangement to be made available to the nominated person ("the relevant output"), SROCs shall be issued as set out below.

    (4) Where the nominated person is entitled to the relevant output under or in compliance with a qualifying arrangement, SROCs shall be issued to electricity suppliers notified to the Authority by the nominated person as being purchasers of the relevant output and to each in such quantities as are appropriate to the amount of the relevant output which the nominated person notifies the Authority each has purchased (subject to the total amount of SROCs available to be so issued).

    (5) Where one or more electricity suppliers are entitled to the relevant output under a qualifying arrangement, SROCs shall be issued to those electricity suppliers, each in proportion to its entitlement.

Criteria for issue of SROCs
    
16. —(1) The criteria for issue of SROCs referred to in article 15 and issue of replacement SROCs referred to in article 20(4) are those detailed in paragraphs (2) to (10).

    (2) The first criterion is that the Authority has previously confirmed in writing to the operator of the generating station to which the SROC relates that the generating station has been granted accreditation as a generating station capable of generating electricity from eligible renewable sources and the Authority has not since withdrawn that accreditation.

    (3) The second criterion is that the Authority has been provided in writing with all the information listed in paragraphs 2(b)(i) to (iii) of Schedule 2 together with any other information which it reasonably requires in order to assess whether the SROC should be issued and it is satisfied that such information is accurate and reliable.

    (4) The third criterion is that the operator of the generating station has provided the Authority with a declaration (which the Authority shall be entitled to accept as sufficient evidence of its contents and which the operator need only provide once during every obligation period) applicable to the relevant electricity that–

    (5) The fourth criterion is that, where the electricity has been generated on land in Northern Ireland and supplied to customers in Great Britain, the operator of the generating station has provided the Authority with evidence of the following matters–

    (6) The fifth criterion is that, where the electricity was not generated on land in Great Britain or in Northern Ireland and was supplied to customers in Great Britain, the operator of the generating station has provided the Authority with evidence of the following matters–

    (7) The sixth criterion is that, in the case of a SROC certifying the matters within section 32B(2A) of the Act and which relates to electricity which was generated by a generating station which, at the time the electricity was generated, was not directly and exclusively connected to a transmission or distribution network in Northern Ireland, the operator of the generating station has provided the Authority with evidence of the following matters–

and the Authority is satisfied with such evidence.

    (8) The seventh criterion is that, in the case of a SROC certifying the matters within section 32B(2A) of the Act which relates to electricity which was generated by a generating station which, at the time the electricity was generated, was directly and exclusively connected to a transmission or distribution network in Northern Ireland, the operator of the generating station has provided the Authority with evidence of the quantity, date and period of time during the particular month when the electricity from eligible renewable sources was generated by the generating station, and the Authority is satisfied with such evidence.

    (9) The eighth criterion is that SROCs in respect of the relevant electricity generated by the generating station in the particular month have not already been issued.

    (10) The ninth criterion is that the Authority is not prohibited from issuing a SROC on any of the grounds set out in article 17(2) and has not refused to issue a SROC on any of the grounds set out in article 17(3).

Criteria for issue of SROCs: supplemental
    
17. —(1) Where a SROC, if issued, will be issued to an electricity supplier pursuant to article 15(4) or (5), the references in article 16(4) to the operator of the generating station shall be treated as references to that electricity supplier but article 16(4)(c) shall not apply.

    (2) The Authority shall not issue a SROC–

    (3) The Authority may refuse to issue a SROC in any case where the Authority–

    (4) For the purpose of article 16(3), where information regarding the fuel used by the generating station has originated at a separate location to that of the generating station, in determining whether the information is accurate and reliable the Authority may have regard to–

Procedure and calculations for issue of SROCs
    
18. —(1) The Authority shall, when issuing SROCs (other than replacement SROCs which shall be issued in accordance with article 20(4)(b) and (5))–

    (2) Where it issues SROCs pursuant to this Part the Authority shall–

    (3) Subject to paragraphs (4), (5) and (6), for the purpose of making the determination in paragraph (2)(a) the Authority shall use in the case of the amounts for "gross output" and "input electricity" (as those two expressions are defined in article 9(7)) either–

    (4) Where figures are neither provided under paragraph (3)(a) nor estimated under paragraph (3)(b) the Authority may, in circumstances which it considers exceptional, accept figures which the operator of the generating station provides after the relevant date.

    (5) Where figures provided under paragraph (3)(a) or accepted under paragraph (4) and, before the Authority makes a determination under paragraph (2)(a), the Authority becomes aware of figures which it considers to be more accurate, the Authority may, where it considers appropriate, accept the later figures and make determinations under paragraph (2)(a) to (d) on the basis of the later figures.

    (6) Where the Authority makes a determination under paragraph (2)(a) on the basis of figures provided under paragraph (3)(a) or accepted under paragraph (4) or (5) and the Authority subsequently becomes aware of figures which it considers to be more accurate, the Authority–

    (7) SROCs in respect of the relevant month shall be issued no earlier than the relevant date.

SROC Register
    
19. —(1) The Authority shall establish and maintain a register of SROCs ("the Register") which shall be conclusive as to whether or not a SROC subsists and as to the person who is for the time being its registered holder.

    (2) Schedule 2 shall have effect with respect to the Register.

    (3) A SROC comprises a Register entry of its particulars and shall be regarded as being issued at the point when those particulars are entered in the Register by the Authority.

    (4) In accordance with the provisions of Schedule 2, the Authority shall ensure that the Register contains, by way of entries made in it–

    (5) Only the registered holder of a SROC may use it as the evidence or as part of the evidence required from the registered holder under article 3(1) and a SROC may not be used by its registered holder or by any other person as the evidence or as part of the evidence required under article 3(1) from any person other than the registered holder.

Revocation of SROCs
    
20. —(1) The Authority–

    (2) Paragraph (1)(e) does not apply where, in accordance with article 18(6), the Authority has accepted later figures and made new determinations under article 18(2)(a) to (d).

    (3) Where the Authority revokes SROCs in accordance with paragraph (1)(c) or (d), it shall–

and in determining the number of SROCs which it is appropriate to revoke it shall proceed on the basis that one SROC represents one megawatt hour of electricity (with any exact half megawatt hour being rounded upwards).

    (4) Where the Authority has revoked a SROC–

    (5) Where pursuant to paragraph (4)(b) the Authority issues a replacement SROC it shall–

Small generators
    
21. —(1) This article applies to generating stations with a declared net capacity of 50 kilowatts or less ("sub-50 kilowatt stations").

    (2) The operator of a sub-50 kilowatt station may–

give notice in writing to the Authority that its entitlement to SROCs in respect of electricity generated by that station ("the relevant station") shall be determined on the basis set out in the remainder of this article.

    (3) Paragraph (4) shall apply–

    (4) Where this sub-paragraph applies, the reference to "month" in each place where it occurs in articles 5, 6, 7, 8, 9, 14 to 18 and 20 and Schedule 2 shall be taken to be a reference to "obligation period", subject to the following exceptions–

    (5) An operator who has given notice under paragraph (2) may–

by notice in writing to the Authority, withdraw the notice given under paragraph (2).

    (6) Where an operator gives notice under paragraph (5), the Authority shall, from the beginning of the obligation period in respect of which the operator gave that notice, determine the operator's entitlement to SROCs in respect of electricity generated by the relevant station on the basis set out in article 15(1).



PART 6

Payments out of the Buy-Out Fund

Allocation of payments made under article 11
    
22. —(1) The aggregate of the amounts received by the Authority under article 11 in respect of an obligation period ("the relevant obligation period") (together with any interest thereon received by the Authority) is referred to as "the buy-out fund".

    (2) The Authority shall pay out the buy-out fund, by the 1st November immediately following the relevant obligation period in accordance with the system of allocation specified in paragraphs (3) to (7).

    (3) The buy-out fund relating to a relevant obligation period shall be divided amongst the United Kingdom suppliers who meet one or more of the applicable conditions referred to in paragraphs (4), (5) and (6) so that each such United Kingdom supplier receives a proportion of the buy-out fund calculated in accordance with paragraph (7).

    (4) The applicable condition for a designated electricity supplier is that, in respect of the relevant obligation period, it has complied (in whole or in part) with its renewables obligation by producing qualifying certificates to the Authority.

    (5) The applicable condition for an electricity supplier supplying electricity in England and Wales is that, in respect of a period contemporaneous with the relevant obligation period, it has complied (in whole or in part) with any renewables obligation imposed on it in accordance with section 32(1) of the Act by producing qualifying certificates to the Authority.

    (6) The applicable condition for a Northern Ireland supplier is that, in respect of a period contemporaneous with the relevant obligation period, it has complied (in whole or in part) with any renewables obligation imposed on it in accordance with article 52 of the Northern Ireland Energy Order by producing qualifying certificates to the Northern Ireland Authority.

    (7) The proportion of the buy-out fund which each United Kingdom supplier is entitled to receive under paragraph (3) is equal to the proportion which the amount of the electricity covered by all of the qualifying certificates it has produced as mentioned in paragraph (4), (5) or (6) bears to the total amount of the electricity covered by all of the qualifying certificates produced to the Authority or to the Northern Ireland Authority in respect of the relevant obligation period or any period contemporaneous with the relevant obligation period, in discharge of any renewables obligation imposed in accordance with section 32(1) of the Act or article 52 of the Northern Ireland Energy Order.



PART 7

Additional Payments

Late payments
    
23. —(1) As soon as reasonably practicable after the specified day in relation to an obligation period ("the obligation period in question"), the Authority shall notify any designated electricity supplier that has not discharged its renewables obligation in full by the specified day ("defaulting supplier") that it has not fully discharged its renewables obligation, and to what extent.

    (2) If a defaulting supplier makes a late payment to the Authority before the end of the late payment period relating to the obligation period in question it shall be treated as having discharged its renewables obligation in full for that obligation period.

    (3) If a defaulting supplier pays part of a late payment to the Authority before the end of the late payment period relating to the obligation period in question it shall be treated as having discharged the same proportion of the amount of its renewables obligation which was not discharged by the specified day as the proportion which the partial payment bears to the total late payment required in order for the supplier to be treated under paragraph (2) as having discharged its renewables obligation in full for the obligation period in question.

    (4) The Authority shall pay out the late payment fund by the 1st January immediately following the late payment period, in accordance with the system of allocation specified in article 22(3) to (7), as if–

    (5) The Authority shall not, during the late payment period, impose a penalty under section 27A(1)[19] of the Act on any defaulting supplier in respect of that supplier's failure to discharge its renewables obligation in full before the specified day.

    (6) In this article–

Mutualisation: payments in
     24. —(1) As soon as reasonably practicable after the end of the late payment period in relation to an obligation period, the Authority shall–

    (2) Where the Authority notifies relevant suppliers under paragraph (1)(b) it shall publish a notice stating–

    (3) Where a relevant shortfall has occurred, the specified amount shall be recovered from all relevant suppliers in accordance with paragraph (4).

    (4) A relevant supplier shall make a payment to the Authority which is the same proportion of the sum to be recovered under paragraph (3) as the proportion which that supplier's renewables obligation for the shortfall period bears to the total of the renewables obligations of all the relevant suppliers for that shortfall period.

    (5) When calculating the amount to be recovered from all relevant suppliers in accordance with paragraph (3), the Authority shall, where a non compliant United Kingdom supplier has complied in part with any renewables obligation imposed on that supplier in accordance with section 32(1) of the Act or article 52 of the Northern Ireland Energy Order by producing qualifying certificates to the Authority or to the Northern Ireland Authority in respect of a shortfall period or any period contemporaneous with the shortfall period, reduce the specified amount in accordance with paragraph (6).

    (6) Where paragraph (5) applies, the specified amount shall be reduced by a proportion which is equal to the proportion which the amount of the electricity covered by all of the qualifying certificates produced by the non compliant United Kingdom supplier as mentioned in paragraph (5) bears to the total amount of the electricity covered by all of the qualifying certificates produced to the Authority or to the Northern Ireland Authority in respect of that shortfall period or any period contemporaneous with that shortfall period in discharge of any renewables obligation imposed in accordance with section 32(1) of the Act or article 52 of the Northern Ireland Energy Order.

    (7) Subject to article 26(3) and (4), a payment required under paragraph (4) shall be paid in the following instalments–

    (8) Where a person required to make a payment under paragraph (4)–

sections 25 to 28 of the Act apply in respect of that person in respect of the obligations imposed by this article as if that person still held a licence to supply electricity.

Mutualisation: payments out
    
25. —(1) The Authority shall pay out the mutualisation fund in accordance with the system of allocation specified in paragraphs (2) to (6) by the following dates–

    (2) The mutualisation fund relating to a shortfall period shall be divided amongst the compliant United Kingdom suppliers who meet one or more of the applicable conditions specified in paragraphs (3) to (5) so that each such compliant United Kingdom supplier receives a proportion of the mutualisation fund calculated in accordance with paragraph (6).

    (3) The applicable condition for a designated electricity supplier is that, in respect of that shortfall period, it has complied (in whole or in part) with its renewables obligation by producing qualifying certificates to the Authority.

    (4) The applicable condition for an electricity supplier supplying electricity in England and Wales is that, in respect of a period contemporaneous with the shortfall period, it has complied (in whole or in part) with any renewables obligation imposed on it in accordance with section 32(1) of the Act by producing qualifying certificates to the Authority.

    (5) The applicable condition for a Northern Ireland supplier is that, in respect of a period contemporaneous with the shortfall period, it has complied (in whole or in part) with any renewables obligation imposed on it in accordance with article 52 of the Northern Ireland Energy Order by producing qualifying certificates to the Northern Ireland Authority.

    (6) The proportion of the mutualisation fund which each compliant United Kingdom supplier is entitled to receive under paragraph (2) is equal to the proportion which the amount of the electricity covered by all of the qualifying certificates it has produced as mentioned in paragraphs (3) to (5) bears to the total amount of the electricity covered by all of the qualifying certificates produced to the Authority or to the Northern Ireland Authority in respect of the shortfall period, or any period contemporaneous with the shortfall period, in discharge of any renewables obligation imposed in accordance with section 32(1) of the Act or article 52 of the Northern Ireland Energy Order, excluding any qualifying certificates produced by non compliant United Kingdom suppliers.

Mutualisation: recalculations
    
26. —(1) Where a relevant shortfall has occurred, if a designated electricity supplier makes a payment to other United Kingdom suppliers in relation to its failure to discharge its renewables obligation in full in relation to the shortfall period (excluding any payments made by the first supplier in respect of mutualisation payments made by the other designated electricity suppliers)–

    (2) If the Authority receives a notification from a United Kingdom supplier in relation to a payment made by a designated electricity supplier in respect of the designated electricity supplier's failure to discharge its renewables obligation in full for the shortfall period and, due to any recalculations required under paragraph (3), it is not reasonably practicable for it to pay out the mutualisation fund by the date required by article 25(1), the Authority shall pay out the mutualisation fund as soon as reasonably practicable after that date.

    (3) Where, before the 1st August in the obligation period immediately following the mutualisation period, the Authority receives a notification from a United Kingdom supplier in relation to a payment made by a designated electricity supplier in respect of the designated electricity supplier's failure to discharge its renewables obligation in full for the shortfall period, the Authority shall, as soon as reasonably practicable–

    (4) Where the instalment payments already made by a relevant supplier are less than the recalculated supplier payment required from a relevant supplier, that supplier shall make future instalment payments on the dates mentioned in article 24(7) which have not yet passed, each instalment payment being equal to the outstanding amount divided by the number of future instalment payments.

    (5) Where, following a recalculation under paragraph (3), a relevant supplier has paid more than the recalculated supplier payment, the Authority shall, where it has received instalment payments under article 24(7) but has not yet paid out the mutualisation fund, repay to each relevant supplier from the mutualisation fund the difference (together with any interest received thereon by the Authority) between the amount that the supplier has paid and the recalculated supplier payment.

    (6) Where the Authority is required to repay sums to each relevant supplier in accordance with paragraph (5) and the mutualisation fund is insufficient to enable the Authority to repay each relevant supplier in full, the Authority shall reduce the sum to be paid to each supplier by a proportion equal to the proportion which that deficit bears to the amount that would have sufficed for that purpose; and the supplier shall not be entitled to any further payments from the Authority in this regard.

    (7) Where, following a recalculation under paragraph (3), a relevant supplier has paid more than the recalculated supplier payment but there is no mutualisation fund to pay out, the supplier shall not be entitled to any repayment from the Authority.

    (8) Where a designated electricity supplier receives a payment from an electricity supplier supplying electricity in England and Wales in relation to the electricity supplier's failure to discharge in full any renewables obligation imposed on it in accordance with section 32(1) of the Act, the designated electricity supplier shall notify the Authority, immediately after receiving the payment, of the amount it received.

Mutualisation: definitions and interpretation
    
27. —(1) In this Part–

    (2) If, in the case of the calendar year 2006 or any subsequent calendar year, the annual retail prices index for that year ("the later year") is higher or lower than that for the previous year, the figure of £20,000,000 used in the definition of specified amount shall, in relation to the obligation period beginning on the 1st April immediately following the later year, be increased (if the index is higher) or decreased (if the index is lower) by the annual percentage inflation rate of the retail prices index for the later year.

    (3) Where the figure of £20,000,000 is modified under paragraph (2) the resulting figure shall be rounded to the nearest pound (with any exact amount of 50p being rounded upwards).



PART 8

Provision of Information and Functions of the Authority

Provision of information to the Authority
    
28. —(1) The Authority may require a designated electricity supplier to provide it with such information in such form and within such time as it may reasonably require which is, in the Authority's opinion, relevant to the question whether the supplier is discharging, or has discharged, its renewables obligation in relation to any obligation period.

    (2) The Authority may request any person who generates, supplies, distributes or transmits electricity in relation to which a SROC has been or may be issued, or any person who buys or sells such electricity or SROCs (otherwise than as a consumer) to provide the Authority with such information in such form and within such time as it may reasonably request in order to carry out any of its functions under this Order.

Exchange of information with the Northern Ireland Authority
    
29. —(1) The Authority shall as soon as reasonably practicable after the specified day notify the Northern Ireland Authority of the NIROC identifier of each NIROC produced to it by a designated electricity supplier under article 12 and the name of the designated electricity supplier which produced that NIROC and of the total number of NIROCs produced to the Authority under article 12 in respect of the obligation period to which the specified day relates.

    (2) The Authority shall as soon as reasonably practicable after receiving a notification from the Northern Ireland Authority as to the SROC identifiers of SROCs produced to it by the Northern Ireland suppliers under any NIRO Order inform the Northern Ireland Authority of–

    (3) The Authority shall as soon as reasonably practicable after the specified day notify the Northern Ireland Authority as to the number of certificates produced to the Authority under article 3 and the number of certificates certifying the matters in section 32B(2A) of the Act produced to the Authority under article 13 by each designated electricity supplier in respect of the obligation period to which the specified day relates.

Functions of the Authority
    
30. In addition to the functions assigned to it elsewhere in this Order, the Authority shall have the following specific functions–

Preliminary accreditation and accreditation of generating stations
    
31. —(1) Paragraphs (2) to (9) shall apply to the granting and withdrawing of preliminary accreditation and accreditation of generating stations.

    (2) Where a generating station in respect of which–

has not been commissioned, the Authority may, upon the application of the person who proposes to construct or operate the generating station, grant the station preliminary accreditation as being capable of generating electricity from eligible renewable sources.

    (3) Where a generating station has been commissioned, the Authority may, upon the application of its operator, grant the station accreditation as being capable of generating electricity from eligible renewable sources for the purposes of article 16(2).

    (4) Where a station has been granted preliminary accreditation (and such preliminary accreditation has not been withdrawn) and an application for its accreditation is validly made under paragraph (3), the Authority shall not grant that application if–

but otherwise shall grant the application.

    (5) The Authority may, in granting preliminary accreditation or accreditation, attach such conditions as appear to it to be appropriate.

    (6) Where any of the circumstances mentioned in paragraph (7) apply, the Authority may–

    (7) The circumstances referred to in paragraph (6) are as follows–

    (8) The Authority shall notify the applicant in writing of–

    (9) In providing written notification under paragraph (8), the Authority shall specify the date on which the grant or withdrawal of preliminary accreditation or accreditation and any conditions attached to the preliminary accreditation or accreditation shall take effect.

    (10) In paragraph (2), the reference to the person who proposes to construct the generating station shall include a person who arranges for the construction of the generating station.



PART 9

Revocation, Transitional and Savings

Revocation, transitional and savings
    
32. —(1) Subject to paragraphs (2) to (15), the 2005 Order is hereby revoked.

    (2) The 2005 Order shall continue to apply in respect of the renewables obligation of each designated electricity supplier to produce to the Authority evidence in accordance with the terms of article 3 of the 2005 Order, before the specified day of 1st October 2006; and for the purposes of this article, the first line in the column headed "Obligation period", and the first percentage specified in the column headed "Percentage of total supplies" in Schedule 1 to the 2005 Order shall continue to apply.

    (3) The 2005 Order shall continue to apply in respect of the obligations of each designated electricity supplier in terms of article 6(5) of the 2005 Order to furnish information to the Department of Trade and Industry by no later than 20th June 2006.

    (4) The 2005 Order shall continue to apply in respect of the obligations of each designated electricity supplier in terms of article 6(6) of the 2005 Order to inform the Authority before 7th August 2006 of the amount in megawatt hours of its renewables obligation in respect of the obligation period which ended before 7th August 2006 and the amount of all electricity supplied by that designated electricity supplier to customers in Scotland during that obligation period.

    (5) The 2005 Order shall continue to apply in respect of the ability of a designated electricity supplier to discharge its renewables obligation in relation to the obligation period ending on 31st March 2006 by making a payment to the Authority before the specified day of 1st October 2006, in accordance with the terms of article 7 of the 2005 Order.

    (6) The 2005 Order shall continue to apply in respect of the obligations of the Authority to pay out the buy-out fund, by 1st December 2006, in accordance with the terms of article 15 of the 2005 Order.

    (7) The 2005 Order shall continue to apply in respect of the ability of a designated electricity supplier to discharge its renewables obligation in relation to the obligation period ending on 31st March 2006 by producing to the Authority eligible NIROCs before the specified day of 1st October 2006, in accordance with the terms of article 8 of the 2005 Order.

    (8) The 2005 Order shall continue to apply in respect of the ability of a designated electricity supplier to discharge its renewables obligation in relation to the obligation period ending on 31st March 2006 by producing to the Authority certificates issued by the Authority certifying the matters in section 32B(2A) of the Act before the specified day of 1st October 2006, in accordance with the terms of article 9 of the 2005 Order.

    (9) The 2005 Order shall continue to apply in respect of the ability of a designated electricity supplier to be treated as having discharged its renewables obligation in relation to the obligation period ending on 31st March 2006 by making a late payment to the Authority before the end of the late payment period in question, in accordance with the terms of article 17 of the 2005 Order.

    (10) The 2005 Order shall continue to apply in respect of the obligations of the Authority to notify any designated electricity supplier that has not discharged its renewables obligation in full by the specified day of 1st October 2006 relating to the obligation period ending on 31st March 2006, and to what extent, in accordance with the terms of article 17 of the 2005 Order.

    (11) The 2005 Order shall continue to apply in respect of the obligations of the Authority to pay out the late payment fund, by 1st February 2007 in accordance with the terms of article 17 of the 2005 Order.

    (12) The 2005 Order shall continue to apply in respect of the obligations of the Authority to notify to the Northern Ireland Authority the information detailed in article 16 of the 2005 Order, in accordance with the terms of that article of the 2005 Order.

    (13) The 2005 Order shall continue to apply in respect of all the obligations of the Authority and designated electricity suppliers referred to in article 18 of the 2005 Order in accordance with the terms of that article and insofar as those obligations relate to a relevant shortfall occurring in the obligation period ending on 31st March 2006.

    (14) For the purposes of paragraph (13), the first line in the column headed "Obligation period" and the first amount specified in the column headed "Amount" in Schedule 4 to the 2005 Order shall continue to apply.

    (15) The 2005 Order shall continue to apply in respect of all the functions of the Authority referred to in article 19 of the 2005 Order insofar as they relate to the obligation period ending on 31st March 2006.


ALLAN WILSON
Authorised to sign by the Scottish Ministers

St Andrew's House, Edinburgh
20th March 2006



SCHEDULE 1
Article 4(2)


AMOUNT OF THE RENEWABLES OBLIGATION


Obligation period Percentage of total supplies
1st April 2006 to 31st March 2007 6.7
1st April 2007 to 31st March 2008 7.9
1st April 2008 to 31st March 2009 9.1
1st April 2009 to 31st March 2010 9.7
1st April 2010 to 31st March 2011 10.4
1st April 2011 to 31st March 2012 11.4
1st April 2012 to 31st March 2013 12.4
1st April 2013 to 31st March 2014 13.4
1st April 2014 to 31st March 2015 14.4
1st April 2015 to 31st March 2016 15.4
Each subsequent period of twelve months ending with the period of twelve months ending on 31st March 2027 15.4



SCHEDULE 2
Article 19(2)


THE REGISTER


     1. The Authority shall maintain the Register (which may be in electronic form) at any of its premises.

     2. Particulars of a SROC comprise–

     3. A person may only be the registered holder of a SROC or have an entry made and maintained in respect of them under article 19(4)(b) if they provide to the Authority in writing–

     4. The Authority may from time to time draw up procedural guidelines for itself and others to assist it in maintaining the Register and carrying out its functions in respect thereof.

     5. The Authority shall delete from the Register any SROC which–

and where it is so deleted, the SROC cannot thereafter be produced as the evidence or part of the evidence required under article 3(1).

     6. Where the registered holder of a SROC and a person whom the registered holder wishes to be the substitute (as defined in this paragraph) require in respect of a particular SROC that the Register be amended, by substituting for the name of the registered holder the name of a second person ("the substitute"), (who shall be a person whose name is included on the list maintained pursuant to article 19(4)(b))–

     7. Where the Authority receives in writing a request for substitution it shall inform both the registered holder of the SROC and the substitute named therein that the request has been received and, in the event that the requests from the registered holder of the SROC and the person whom the registered holder wishes to be the substitute are not identical in all material respects or do not include the SROC identifier of the SROC, shall draw this to their attention.

     8. Where a SROC is issued in accordance with article 15 or a replacement SROC is issued in accordance with article 20 or a substitute is recorded as the registered holder pursuant to paragraph 6, the Authority shall notify the registered holder (in the case of a SROC or a replacement SROC being issued) and the former and new registered holder (in the case of a substitution) in writing within 5 banking days of the issue or substitution having taken place.

     9. The substitute shall not be the registered holder of the SROC until such time as the particulars of the SROC recorded in the Register identify the substitute as such.

     10. The Register may be amended by a decision of the Authority–

     11. The contents of the Register (including the entries referred to in article 19(4)(b)) shall be available for inspection by the public on request at reasonable notice during the Authority's working hours and at the request of any person the Authority shall provide a written statement of any entry on the Register including any entry referred to in article 19(4)(b).

     12. Where any person considers that an entry maintained in respect of that person under article 19(4)(b) should be amended or deleted, that person may apply to the Authority in writing requesting that the entry be amended or deleted.

     13. The Authority shall in any procedural guidelines which it produces provide details of its usual working hours.



SCHEDULE 3
Articles 2(1)[20]


CONDITIONS OF ELIGIBILITY FOR NIROCs


     1. The electricity to which the NIROC relates was generated from renewable sources.

     2. The electricity was generated in Northern Ireland (which for the purposes of this paragraph shall not include any part of the territorial sea of the United Kingdom).

     3. The electricity to which the NIROC relates was not generated by a generating station that is a large hydro generating station unless it was first commissioned after 1st April 2002.

     4. Subject to paragraphs 5 and 6, the electricity to which the NIROC relates was not generated by a generating station (other than a micro hydro generating station) that was first commissioned before 1st January 1990 and where the main components of that generating station have not been renewed since 31st December 1989 as described in paragraph 23.

     5. Paragraph 4 shall not apply in relation to a NIROC issued in respect of electricity generated by a generating station that during the month to which the NIROC relates was fuelled partly by fossil fuel and partly by biomass (and by no other fuel).

     6. Paragraph 4 shall not apply in relation to a NIROC issued in respect of electricity generated by a generating station that during the month to which the NIROC relates was fuelled wholly by biomass, if–

     7. The electricity to which the NIROC relates was not generated by a generating station that in the month to which the NIROC relates is fuelled wholly or partly by waste unless–

     8. The electricity to which the NIROC relates was not generated by a generating station that in the month to which the NIROC relates was fuelled partly by fossil fuel and partly by any other fuel (or fuels) other than biomass.

     9. After 31st March 2009, the electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled partly by fossil fuel and partly by biomass (and by no other fuel) if during that month, less than the specified percentage of the energy content of the biomass derives from energy crops.

     10. In paragraph 9, "the specified percentage" means–

     11. After 31st March 2016, the electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled partly by fossil fuel and partly by biomass (and by no other fuel).

     12. The electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled wholly or partly by peat.

     13. The electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled wholly or partly by any substance derived directly or indirectly from any of the substances referred to in article 8(1)(a)(i) unless that substance is a substance falling within article 8(1)(a)(ii) or it is waste or a component of biomass.

     14. The electricity to which the NIROC relates was not generated by a generating station that during the month to which the NIROC relates was fuelled wholly or partly by waste where all the waste which is neither biomass nor liquids comprised wholly or mainly of hydrocarbon compounds is or is derived directly or indirectly from one or more of the substances referred to in article 8(1)(a)(i).

     15. Paragraph 16 applies where–

     16. If this paragraph applies, it is a condition of eligibility that the electricity to which the NIROC relates was not generated by a generating station–

     17. Paragraph 18 applies, where an extant qualifying arrangement ("the applicable qualifying arrangement") provides for the building of a generating station ("the specified station") at a specified location ("the location") and the specified station has not been commissioned.

     18. If this paragraph applies it is a condition of eligibility that the electricity to which the NIROC relates was not generated by a generating station–

     19. Paragraphs 16 and 18 shall not apply to a NIROC relating to electricity generated by a generating station which, during the month in question, generates only electricity which is sold pursuant to another extant qualifying arrangement.

     20. In paragraphs 16 and 18, in relation to a person who is a party to the applicable qualifying arrangement ("the first person"), another person ("the second person") is a "linked person" where the second person has given or has arranged to give or has ensured or has arranged to ensure that the first person is given a financial or other inducement relating to any right or interest in, or in respect of, the construction or operation of a generating station at the location.

     21. The references in paragraph 20 to the first person and the second person shall include any person who is a connected person in relation to either of them.

     22. For the purposes of paragraphs 15 to 21, a generating station shall be regarded as being situated at a location provided for by an extant qualifying arrangement whether it is situated wholly or partly at that location.

     23. For the purposes of paragraph 4, the main components of a generating station shall only be regarded as having been renewed since 31st December 1989 where–

     24. The following terms shall have the meanings given below where they appear in this Schedule:

     25. Paragraph 26 applies, where in respect of any generating station, the operator–

     26. In the case of a generating station referred to in paragraph 25 the reference to "month" in each place where it occurs in this Schedule shall be taken to be a reference to "obligation period" where "obligation period" has the meaning that it has in the NIRO Order under which the NIROC in question was issued.



SCHEDULE 4
Article 27(1)


AMOUNT OF RELEVANT SHORTFALL FOR EACH OBLIGATION PERIOD


Obligation Period Amount
1st April 2006 to 31st March 2007 £670,000
1st April 2007 to 31st March 2008 £790,000
1st April 2008 to 31st March 2009 £910,000
1st April 2009 to 31st March 2010 £970,000
1st April 2010 to 31st March 2011 £1,040,000
1st April 2011 to 31st March 2012 £1,140,000
1st April 2012 to 31st March 2013 £1,240,000
1st April 2013 to 31st March 2014 £1,340,000
1st April 2014 to 31st March 2015 £1,440,000
1st April 2015 to 31st March 2016 £1,540,000
Each subsequent period of twelve months ending with the period of twelve months ending on 31st March 2027 £1,540,000



EXPLANATORY NOTE

(This note is not part of the Order)


This Order is made under section 32 of the Electricity Act 1989 and imposes an obligation ("the renewables obligation") on all electricity suppliers, which are licensed under that Act and which supply electricity in Scotland, to supply to customers in Great Britain a specified amount of electricity generated by using renewable sources. As alternatives, in respect of all or part of an electricity supplier's renewables obligation, an electricity supplier is permitted to provide evidence that other licensed electricity suppliers have supplied electricity generated using renewable sources instead of it, or to make a payment to the Gas and Electricity Markets Authority ("the Authority"). Renewable sources include sources of energy such as wind, water, solar and biomass.

The Order revokes and replaces, with amendments, the Renewables Obligation (Scotland) Order 2005 ("the 2005 Order"). The structure of the Order is different from the structure of the 2005 Order and some of the longer and more complex provisions of the 2005 Order have been split out into several separate articles in this Order.

In content, the provisions of this Order are similar to those of the 2005 Order. However, new provisions have been added relating to the calculation of SROC eligibility for renewable obligation certificates issued under this Order ("SROCs") of electricity generated by combined heat and power generating stations which are fuelled wholly or partly by waste (see articles 7(1)(c) and 9(6)).

The new provisions of the Order also modify the existing provisions relating to the procedure to be followed by the Authority in issuing SROCs, with the aim of introducing additional flexibility in that procedure (see article 18(3) to (6)). This is achieved by allowing the Authority discretion in deciding whether to accept revisions to the figures used in calculating the number of SROCs to which the station is entitled, where such revisions are made after the deadline set in the Order.

Provisions have also been inserted into the Order detailing a preliminary accreditation procedure (see article 31). An application for preliminary accreditation is made to the Authority by a person proposing to operate or construct a generating station before the station has been commissioned. The Authority may grant preliminary accreditation if the proposed generating station would be capable of generating electricity from eligible renewable sources (as defined in article 5 of the Order). The Order sets out the circumstances in which the Authority may refuse to grant accreditation once preliminary accreditation has been granted.

Article 2 contains the interpretation provisions for the Order.

Article 3 imposes the renewables obligation on electricity suppliers. The renewables obligation requires the electricity supplier to produce evidence of the supply of electricity generated from renewable sources to the Authority. The evidence required is certificates issued by the Authority. Those certificates issued under this Order are referred to as "SROCs". Alternatively the electricity supplier may produce certificates issued under the corresponding Order made by the Secretary of State for Trade and Industry: the Renewables Obligation Order 2006. Part 4 of the Order (articles 11 to 14 described below) provides alternative means of discharging the obligation.

Article 4 and Schedule 1 provide for how the amount of an electricity supplier's renewables obligation is to be determined.

Articles 5 to 9 and 14 determine what types of electricity generated from renewable sources are eligible to satisfy an electricity supplier's renewables obligation.

Article 10 relates to arrangements whereby electricity generated by a generating station is sold to an electricity supplier and then purchased back by the operator of the generating station.

Article 11 provides that, instead of producing certificates to the Authority, an electricity supplier may discharge (in whole or part) its renewables obligation by making a payment to the Authority.

Article 12 provides for suppliers to discharge their renewables obligation by tendering eligible certificates, issued under the Northern Ireland Renewables Obligation orders ("NIROCs") to the Authority. Schedule 3 sets out the conditions governing NIROC eligibility.

Article 13 provides for an electricity supplier to discharge its renewables obligation by producing to the Authority certificates certifying the matters in section 32B(2A) of the Act rather than section 32B(2). That section deals with certificates relating to the supply of electricity to customers in Northern Ireland.

Articles 15 to 19 and Schedule 2 provide for the issue of SROCs by the Authority and the maintenance by it of a register of SROCs.

Article 20 provides for the revocation of SROCs in specified circumstances.

Article 21 contains special arrangements enabling generating stations with a declared net capacity of 50 kilowatts or less to be able to claim SROCs on an annual rather than monthly basis.

Article 22 provides how the payments made to the Authority by electricity suppliers under article 11 (payments as alternative means of discharging renewables obligation) are to be divided amongst those electricity suppliers subject to the renewables obligation.

Article 23 provides for an electricity supplier to be treated as having discharged its renewables obligation if it makes a late payment in accordance with that article. The late payment must be made during a specified period and is subject to a surcharge which rises on a daily basis. If the supplier only makes a partial late payment the remaining part of its renewables obligation remains outstanding and the supplier is still in default of its renewables obligation.

Articles 24 to 27 provide for mutualisation as set out in details of how the process will work; such as how a shortfall in the buy out fund will be calculated and which shortfalls are recoverable via mutualisation. Specifically, where the shortfall is less than the sum set out in Schedule 4 for that obligation period, mutualisation is not triggered; when the shortfall is equal to or greater than the sum set out in Schedule 4 and does not exceed £20,000,000, the whole shortfall is recovered via mutualisation; and when the shortfall is over £20,000,000, only the first £20,000,000 of the shortfall is recovered.

The payments required by electricity suppliers in accordance with the mutualisation provisions are made in quarterly instalments. For example, for a shortfall in the obligation period 2006/2007, the instalments are required before the following dates: 1st September 2008, 1st December 2008, 1st March 2009 and 1st June 2009.

Article 28 provides for the Authority to obtain information to enable it to carry out its functions under the Order.

Article 29 provides for the exchange of information between the Authority and the Northern Ireland Authority relating to NIROCs produced to the Authority under article 12 and SROCs produced to the Northern Ireland Authority under the Northern Ireland Renewables Obligation orders.

Article 30 makes provision relating to the functions of the Authority under the Order.

Article 31 provides for the preliminary accreditation and accreditation of generating stations. In order to be eligible to claim SROCs in respect of electricity generated from eligible renewable sources, a generating station must obtain accreditation from the Authority.

Article 32 revokes the 2005 Order and also provides for savings provisions in respect of the obligations of each electricity supplier to produce evidence and other information in respect of the renewables obligation, or to make payments to the Authority, and to furnish information to the DTI in respect of periods prior to the coming into force of the Order.

A Regulatory Impact Assessment is available and can be obtained from the Energy Policy Unit, the Scottish Executive Enterprise and Lifelong Learning Department, 5 Cadogan Street, Glasgow, G2 6AT.

This Order re enacts provisions of the 2005 Order which gave effect to Article 3.1 of the European Directive on the promotion of electricity produced from renewable energy sources in the internal market (Directive 2001/77/EC, O.J. L 283, 27.10.01, p.33).


Notes:

[1] 1989 c.29. Section 62 of the Utilities Act 2000 (c.27) substituted a new section 32 of the Electricity Act 1989 for the section 32 which was originally enacted. The new section 32 of the Electricity Act 1989 has subsequently been amended by sections 115 and 119 of the Energy Act 2004 (c.20). Sections 63 to 65 of the Utilities Act 2000 inserted new sections 32A to 32C of the Electricity Act 1989, which have been amended by sections 115, 116, 118 and 119 of the Energy Act 2004. Section 32BA of the Electricity Act 1989 was inserted by section 117 of the Energy Act 2004. The functions of the Secretary of State, in respect of sections 32 and 32A were transferred to the Scottish Ministers by virtue of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) (No. 2) Order 2000 (S.I. 2000/3253), article 3. The functions of the Secretary of State in respect of sections 32B and 32C of the Electricity Act 1989 and section 67 of the Utilities Act 2000 were transferred to the Scottish Ministers by virtue of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) (No. 2) Order 2001 (S.I. 2001/3504), article 2. The functions of the Secretary of State in respect of sections 32BA and 32(7) of the Electricity Act 1989 were transferred to the Scottish Ministers by virtue of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2005 (S.I. 2005/849), article 2.(b) S.S.I. 2005/185.back

[2] Available at http://www.chpqa.com.back

[3] 1988 c.1. Section 839 was amended by the Finance Act 1995 (c.4), Schedule 17, paragraph 20, and by the Income Tax (Trading and Other Income) Act 2005 (c.5), Schedule 1, paragraph 341 and modified by S.I. 1997/1154.back

[4] S.I. 2000/2727, as amended by S.I. 2001/3268.back

[5] S.S.I. 2005/549.back

[6] S.I. 1994/3259, as amended by S.I. 1995/68.back

[7] S.I. 1994/3275 (S. 190).back

[8] S.I. 1997/248.back

[9] S.I. 1997/799 (S. 76).back

[10] S.I. 1998/2353.back

[11] S.I. 1999/439 (S. 24).back

[12] S.I. 1992/231 (N.I. 1), article 35 is prospectively repealed by S.I. 2003/419 (N.I. 6), but the relevant provision has not yet been commenced.back

[13] S.I. 2003/419 (N.I. 6).back

[14] Section 4(4) was amended by section 28 of the Utilities Act 2000 and section 135 of the Energy Act 2004.back

[15] 1990 c.43. Section 75(2) was amended by paragraph 88 of Schedule 22 to the Environment Act 1995 (c.25).back

[16] 1964 c.29. Section 1(7) of the Continental Shelf Act 1964 was amended by the Oil and Gas (Enterprise) Act 1982 (c.23), section 37 and Schedule 3, paragraph 1.back

[17] Available at http://www.dti.gov.uk/energy/inform/energy.trends/index.shtml.back

[18] 1976 c.76.back

[19] Section 27A was inserted by section 59 of the Utilities Act 2000 (c.27).back

[20] See definition of "eligible NIROC".back



ISBN 0 11 070209 3


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Prepared 30 March 2006


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