Commentary on Sections Part 2: Electricity Market Reform Chapter 6: Access to markets etc Section 50: Power to modify licence conditions etc to facilitate investment in electricity generation
262.This section enables the Secretary of State to modify the conditions of electricity supply licences and related industry codes for the purpose of facilitating investment in electricity generation by means of a Power Purchase Agreement (PPA) scheme.
263.Subsection (1) allows the Secretary of State to modify the conditions of particular supply licences and the standard conditions incorporated in such licences and also to amend electricity industry codes, being documents maintained in accordance with the conditions of such supply licences, and agreements that give effect to industry codes.
264.Subsection (2) sets out the purpose for which the Secretary of State may use the modification power. This is limited to facilitating investment in electricity generation by means of a power purchase agreement scheme.
265.Subsection (3) explains that
	a PPA scheme is a scheme established by supply licence conditions and regulations for promoting the availability to electricity generators of power purchase agreements;
	a PPA is an arrangement under which a licensed supplier agrees to purchase electricity generated by an electricity generator at a discount to a prevailing market price.
266.Subsection (4) sets out the nature of provisions that may be made in licence or code modifications under this section, which include:
	the eligibility of an electricity generator to enter into a PPA under the scheme;
	the terms of any PPA to be entered into under the scheme, including provision for determining the price at which electricity is to be purchased under the agreement and the duration of any such agreement;
	the circumstances in which a licensed supplier is or may be required or permitted to enter, or offer to enter, into a PPA under the scheme;
	the provision of information in connection with the scheme.
267.Subsections (5) and (6) set out further details about the process for determining which licensed supplier or suppliers is or are required or permitted to enter, or offer to enter, into a PPA agreement with an electricity generator in any particular case and for this determination to be made by one or more of the Secretary of State, the Authority, and the electricity generator or by auction or other competitive process.
268.Subsection (7) sets out that a licenced supplier under section 50 and 51 means the holder of a licence under Section 6(1)(d) of the Electricity Act 1989.