122.These sections replace the Secretary of State’s powers to impose obligations designed to promote the generation of electricity from non‑fossil sources with a power for the Secretary of State to impose obligations in relation to renewables generation only (i.e. excluding nuclear and fossil generation) on all licensed electricity suppliers. An obligation will be based on the requirement that a proportion of total supply of electricity to consumers must be renewable electricity.
123.Section 63: Orders under section 32: supplementary. This section (together with section 62) provides flexibility in imposing an obligation in relation to its duration and size, including the possibility that it can increase or decrease over time, that a proportion of an individual supplier’s obligation may be carried forward or back into another period, the types of generation that may be used in its fulfilment, and the provision of information necessary to set and determine the fulfilment of suppliers’ individual obligations.
124.Section 64: Green certificates. This section introduces the concept of ‘green certificates’, which will be tradable certificates of the production and supply of renewable electricity issued by the Authority, the possession of which will count towards a supplier’s obligation.
125.Section 65: Alternative ways of discharging renewables obligation: payments. This section provides an alternative way of meeting an obligation by making a payment to the Authority. The Authority must pay the amounts received to electricity suppliers in line with a system of allocation specified by the Secretary of State.
126.Section 67: Supplementary. This section provides powers for the Secretary of State to make orders for the purpose of ensuring the continuation of outstanding contracts entered into by the public electricity suppliers with renewables generators in compliance with non-fossil fuel orders (in Scotland, Scottish renewables orders) made under section 32 of the 1989 Act. In particular it will enable provision to be made for the continuation of the fossil fuel levy with respect to the outstanding contracts and for the transfer of the contracts themselves from the public electricity suppliers to nominated successors.
Commentary on Sections Part Iv: Amendment of the Electricity Act 1989 Sections 62 - 67: Electricity from renewable sources