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- House adjourned at eleven minutes past ten o'clock.
Official Report of the Grand Committee on the
Energy Bill [HL]
(Sixth Day)
Wednesday, 4 February 2004.
The Committee met at half past three of the clock.
[The Deputy Chairman of Committees (Lord Hogg of Cumbernauld) in the Chair.]
Baroness Byford moved Amendment No. 106E:
- Page 60, line 39, at end insert "; or
The noble Baroness said: Clause 76(7) lays down that, if an offence under this section is committed by a Scottish firm with the consent of a partner, that person is guilty of the offence and liable to prosecution. Will the Minister explain why, according to the Bill, that person will not be dealt with in the same manner and with the same safeguards as an offender in another part of Great Britain? I beg to move.
Lord Davies of Oldham: I congratulate the noble Baroness, Lady Byford, on her acuity in spotting this issue, but I reassure her that it is not an oversight on our part that there is no specific mention of Scotland in Clause 77(3). There is no need to provide for proceedings in Scotland here. The Lord Advocate ensures the same result; namely, prosecutions can be instituted only by central government agencies without specific enactment. The amendment, therefore, is unnecessary, and I ask the noble Baroness to withdraw it.
Baroness Byford: I thank the Minister for that response. We try to look through Bills fairly carefully, as the noble Lord knows well. If he assures me that the amendment is not necessary, I must obviously beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 78 [Application of civil law to renewable energy installations etc.]:
Lord Davies of Oldham moved Amendment No. 106EA:
The noble Lord said: In moving Amendment No. 106EC, I shall speak also to the other government amendments in the group. It may be—
Baroness Miller of Hendon: I think that we are perhaps dealing with the group before the group to which the noble Lord wants to speak. Amendments Nos. 106EA and 106EB have already been debated.
Lord Davies of Oldham: I am so sorry.
Lord Higgins: Would my noble friend like to give to the Government the coloured version so admirably produced by our Chief Whip?
Lord Davies of Oldham: I beg to move.
On Question, amendment agreed to.
Lord Davies of Oldham moved Amendment No. 106EB:
On Question, amendment agreed to.
Clause 78, as amended, agreed to.
Lord Davies of Oldham moved Amendment No. 106EC:
The noble Lord said: I shall attempt a second time to move Amendment No. 106EC. I anticipated this debate with great fervour. That is why I was so enthusiastic to move on to this group of amendments. There are 11 government amendments in total, and I shall speak to those. It may be for the convenience of the Committee if I do not address myself to the other amendments in the group tabled until Opposition spokespersons have had the chance to speak to their amendments. Then I shall seek to reply to them.
Let me make the obvious point that the Government tabled the 11 amendments to supplement the existing clauses in the Bill providing the basic framework for the regulation of offshore electric lines. The first four amendments each introduce a new clause, while the remaining seven make consequential changes to existing clauses.
My noble friend Lord Whitty indicated at Second Reading that the Government would table amendments. Clause 79 provides for the extension of the four prohibitions in the Electricity Act 1989 to offshore areas as far as the outer limits of the renewable energy zones. That also has the effect of extending the licensing and exemption regime to those areas. The need for the regulation stems from the moves to much bigger-scale offshore renewable energy generation, most of which is focused on wind energy.
The first generation of offshore wind farms was relatively small and widely dispersed around our coasts. However, the Crown Estate has recently
Given the upsurge in offshore generation, the Government are clear that there needs to be appropriate regulation of the generation and of the connections to the main grid system. Regulation will help ensure that the cabling infrastructure required is provided efficiently and that a proliferation of relatively thin cables from individual wind farms is avoided. We are looking to allow a number of wind farm connections to be marshalled at transmission hub points offshore through thicker cables. We also want to ensure that the connections put in place allow fair and open access to the grid for offshore generation.
Amendment No. 106ECg empowers the Secretary of State to modify the standard conditions of offshore transmission and distribution licences and make consequential and incidental changes to particular transmission or distribution licences. Such a power is necessary because we foresee that the different offshore environment may, as a matter of practicality, necessitate some change to standard conditions. For example, the differences in engineering involved when putting cables into the sea rather than on land may require some changes to licence conditions.
We considered whether it would be sufficient to take account of the particularities of offshore circumstances by applying special conditions to each individual licence. However, we believe it will provide greater clarity and transparency for the industry if we specifically set out the modifications within the standard conditions that will apply in relation to offshore areas. The exact scope of the modifications remains to be established, and any proposals for modifications will be the subject of formal consultation. We anticipate that offshore and onshore licence conditions should remain the same unless there are good reasons to make changes.
We are also conscious of the need to avoid uncertainty among licence holders, and we do not intend to take an ongoing power to make modifications. The power is exercisable only within 18 months of commencement of the section. We have notified the Select Committee on Delegated Powers and Regulatory Reform of our intention to take this power.
The new clause inserted by Amendment No. 106EDg enables the Secretary of State to extend the system operator licence to apply to offshore. Chapter 1 of Part 3 sets out the British Electricity Trading and Transmission Arrangements provision. They are designed to create a single trading market in wholesale electricity in Britain, with all the resulting benefits. Broadly speaking, the activity of transmission will be divided into two parts—system operation and the provision of transmission assets.
I hope noble Lords will forgive me for using the acronym BETTA from now on, as it is a mouthful to spell out in full each time. I take it that, in this part of the Bill, we will all have to take care to ensure that Hansard reporters and others know that we are referring to BETTA, not using the word "better".
The essential part of BETTA is that there is a single system operator for the whole of the British transmission system. Although licensing of the GB system operator cannot take place until certain provisions in the Bill have received Royal Assent, the Secretary of State for Trade and Industry has already indicated that she is minded to agree that National Grid Company plc's application for this role should be accepted. However, current transmission licences extend only to the British shoreline, and the changes to be made under BETTA will not alter that. That means that we need a power to extend the system operator licence to cover offshore areas. In addition, the changes to the system operator licence may have a consequential effect on other electricity licences, so the clause includes the power to make any changes necessary to those licences to take account of the extension of the system operator licence.
Exercise of the power will again be subject to prior consultation and must happen within 18 months of commencement of this section. The Delegated Powers and Regulatory Reform Committee has been made aware of our intention to take this power.
Government Amendment No. 106EE enables the Gas and Electricity Markets Authority to make regulations setting out the process to be followed by it in awarding offshore transmission licences by competitive tender. As I mentioned, BETTA will result in the activity of transmission being divided in two: system operation and provision of transmission assets. There are no offshore transmission licences, and it will be necessary to grant such licences to allow the necessary transmission infrastructure to be established and operated offshore.
In awarding licences, GEMA will have to act in accordance with its statutory duties. The regulations will require the approval of the Secretary of State but will not be subject to a parliamentary procedure. Once more, we have notified the Delegated Powers and Regulatory Reform Committee accordingly.
The new clause inserted by Amendment No. 132ZAg amends Section 64 of the Electricity Act 1989 to define high-voltage lines for offshore areas. The Electricity Act did not originally contemplate offshore transmission, so the definition of "high voltage" applies only in England, Wales and Scotland. Currently, 132-kilovolt lines are defined as high voltage lines in Scotland but not in England and Wales. That is because, in Scotland, 132-kilovolt lines are generally used for the bulk transfer of electricity, whereas in England and Wales such lines are mainly used to distribute electricity.
The definition of "high voltage" is important, as it feeds into what constitutes a transmission system. A transmission system must be wholly or mainly made up of high-voltage lines. The amendment makes it
Government Amendments Nos. 141Ag to 141Fg and 149 will make minor changes, which are a consequence of the first four amendments, the nub of our present debate. They each make adjustments to cross-references in the Bill to take account of the new clauses if they are approved. I beg to move.
(c) in Scotland, except by or with the consent of the Crown Office."
Page 61, line 22, leave out subsections (4) and (5).
After Clause 78, insert the following new clause—
"ORDERS IN COUNCIL UNDER SECTIONS 76 AND 78
(1) An Order in Council under section 76 or 78 that makes provision falling within subsection (3) is subject to annulment in pursuance of a resolution of the Scottish Parliament (but may by virtue of subsection (2) be subject also to the negative resolution procedure).
(2) An Order in Council under section 76 or 78 that makes provision not falling within subsection (3) is subject to the negative resolution procedure.
(3) Provision falls within this subsection so far as it is provision that would be within the legislative competence of the Scottish Parliament if it were included in an Act of that Parliament."
After Clause 79, insert the following new clause—
"MODIFICATION OF LICENCE CONDITIONS FOR OFFSHORE TRANSMISSION AND DISTRIBUTION
(1) If the Secretary of State considers it appropriate to do so for purposes connected with offshore transmission or offshore distribution, he may—
(a) modify the standard conditions of transmission licences or distribution licences;
(b) modify, for purposes that in relation to modifications made under paragraph (a) are incidental, consequential or transitional purposes, the conditions of a particular transmission licence or a particular distribution licence;
(c) modify a code maintained in accordance with the conditions of a transmission licence or a distribution licence; and
(d) modify an agreement that gives effect to a code so maintained.
(2) Before making a modification under this section, the Secretary of State must consult—
(a) the holder of any licence being modified; and
(b) such other persons as he considers appropriate.
(3) Subsection (2) may be satisfied by consultation that took place wholly or partly before the commencement of this section.
(4) The Secretary of State must publish every modification made by him under this section.
(5) The publication must be in such manner as the Secretary of State considers appropriate.
(6) Where the Secretary of State makes modifications under subsection (1)(a) of the standard conditions of licences of any type, GEMA must—
(a) make (as nearly as may be) the same modifications of those standard conditions for the purposes of their incorporation in licences of that type granted after that time; and
(b) publish the modifications in such manner as it considers appropriate.
(7) A modification under subsection (1)(b) of part of a standard condition of a licence does not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of Part 1 of the 1989 Act.
(8) The Secretary of State's powers under this section are exercisable only during the eighteen months beginning with the commencement of this section.
(9) In this section—
"offshore distribution" means distribution within an area of offshore waters of electricity generated by a generating station in such an area;
"offshore transmission" means transmission within an area of offshore waters of electricity generated by a generating station in such an area; and
"offshore waters" means—
(a) waters in or adjacent to Great Britain which are between the mean low water mark and the seaward limits of the territorial sea; and
(b) waters within an area designated under section 1(7) of the Continental Shelf Act 1964 (c. 29).
(10) Expressions used in this section and in Part 1 of the 1989 Act have the same meanings in this section as in that Part."
3.45 p.m.
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