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STATUTORY INSTRUMENTS


2001 No. 3270

ELECTRICITY

The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001

  Made 28th September 2001 
  Laid before Parliament 28th September 2001 
  Coming into force 1st October 2001 

The Secretary of State, in exercise of the powers conferred on her by sections 5 and 111(2) of the Electricity Act 1989[1] and after giving notice under and considering any representations in accordance with section 5(2) and (11) of that Act and after consultation with the Gas and Electricity Markets Authority[2] and the Scottish Ministers[3], hereby makes the following Order: - 

Citation and commencement
     1. This Order may be cited as the Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 and shall come into force on 1st October 2001.

Interpretation
    
2.  - (1) In this Order - 

    (2) The following provisions shall have effect for the purposes of this Order.

Exemptions from section 4 of the Act
     3.  - (1) Exemption is granted - 

    (2) A person shall be treated as falling within any class specified in Schedule 2, 3 or 4 notwithstanding that he generates, distributes or supplies electricity, as the case may be, in circumstances other than those specified in the description of that class if the generation, distribution or supply of electricity in those circumstances would, if taken on its own, be such that that person would fall within another class in Schedule 2, 3 or 4, as the case may be.

Conditions on exemptions
    
4.  - (1) The exemption granted by article 3(1)(a) to persons of Class D in Schedule 2 is subject to compliance with the condition specified in paragraph (2) below.

    (2) The highest generation of electricity from any generating station of such a person (at the main alternator terminals) which can be maintained indefinitely without causing damage to the plant (the "maximum capacity") shall not at any time exceed the maximum capacity of that generating station on 30th September 2000.

    (3) The exemption granted by article 3(1)(b) to persons of the classes specified in Schedule 3 is subject to compliance with the conditions specified in paragraph (4) below.

    (4) (a) Persons referred to in paragraph (3) above shall furnish to the Authority, in such manner and at such times as the Authority may direct, such information as the Authority may consider necessary for the purpose of performing its functions under the Act.

    (5) The exemption granted by article 3(1)(c) to persons of Class A in Schedule 4 is subject to compliance with the conditions specified in paragraph (6) below.

    (6) A person who at any time supplies more electrical power than 500 kilowatts - 

    (7) The exemption granted by article 3(1)(c) to persons of Class C in Schedule 4 is subject to compliance with the condition specified in paragraph (8) below.

    (8) A person shall not supply electricity to domestic consumers who are additional group consumers within the 100 megawatt limit at a price which exceeds such maximum price as may be specified in or as may be calculated by such method and by reference to such matters as may be specified in a direction given by the Authority.

Revocation
    
5. The Electricity (Class Exemptions from the Requirement for a Licence) Order 1997[11] and the Electricity (Class Exemptions from the Requirement for a Licence) (Amendment) (England and Wales) Order 2000[12] are revoked.


Brian Wilson,
Minister for State for Industry and Energy, Department of Trade and Industry

28th September 2001



SCHEDULE 1
Article 2(1)


MEANING OF "DECLARED NET CAPACITY"


     1. The declared net capacity of a generating station which is driven by any means other than water, wind or solar power is the highest generation of electricity (at the main alternator terminals) which can be maintained indefinitely without causing damage to the plant less so much of that capacity as is consumed by the plant.

     2. The declared net capacity of a generating station which is driven by water, wind or solar power shall be ascertained by the application of the formula

A x B
where - A is the highest generation of electricity (at the main alternator terminals or, in the case of direct current generation, at the output terminals of the direct current to alternating current converter) which, on the assumption that the source of power is available uninterruptedly, can be maintained indefinitely without causing damage to the plant less so much of that electricity as is consumed by the plant; and

B has the value set out in the table as applicable to the particular description of station.


Table
(1) (2)
Description of station Value of B
     1. Station driven by tidal or wave power

0.33
     2. Station driven by any form of water power other than tidal or wave power

1
     3. Station driven by wind power

0.43
     4. Station driven by solar power

0.17



SCHEDULE 2
Article 3(1)(a)


EXEMPTIONS FROM SECTION 4(1)(a) OF THE ACT (GENERATION EXEMPTIONS)


Class A: Small generators
Persons (other than licensed generators) who do not at any time provide more electrical power from any one generating station than - 

    (1) 10 megawatts; or

    (2) 50 megawatts in the case of a generating station with a declared net capacity of less than 100 megawatts;

disregarding - 

Class B: Offshore generators
Persons (other than licensed generators) who - 

    (1) do not generate electricity except at a generating station which is situated on an offshore installation; and

    (2) do not supply such electricity except to premises which constitute or are comprised in an offshore installation.

Class C: Generators not exceeding 100 megawatts
Persons (other than licensed generators) who do not provide any electrical power except from generating stations which were connected to the total system on 30th September 2000 and which are not normally capable of exporting more than 100 megawatts to the total system, disregarding power temporarily provided in excess of 100 megawatts due to technical circumstances outside the reasonable control of the person providing that power.

Class D: Generators never subject to central despatch
Persons (other than licensed generators) who do not provide electrical power except from generating stations which were connected to the total system on 30th September 2000 provided that under the terms and conditions of their licences granted under section 6(1)(a) of the Act they were not on that date required to submit those stations to central despatch by the licensed transmitter (central despatch being the process by which the licensed transmitter scheduled and issued direct instructions to licensed generators for the despatch of electrical power prior to 27th March 2001).



SCHEDULE 3
Article 3(1)(b)


EXEMPTIONS FROM SECTION 4(1)(bb) OF THE ACT (DISTRIBUTION EXEMPTIONS)


Class A: Small distributors
Persons (other than licensed distributors) who do not at any time distribute more electrical power than 2.5 megawatts for the purpose of giving a supply to domestic consumers or enabling a supply to be so given with that electrical power.

     A.1. For the purposes of Class A electrical power distributed by a body corporate, which is associated with, connected to or related to any distributor and which does not fall within Class B below, shall be treated as distributed by that distributor.

Class B: On-site distribution
Persons (other than licensed distributors) who do not at any time distribute from any distribution system more electrical power than one megawatt for the purpose of giving a supply to domestic consumers or enabling a supply to be so given with that electrical power provided that each domestic consumer receives the electrical power, disregarding stand-by electrical power, from a generating station embedded in the same distribution system as himself.

     B.1 For the purposes of Class B "stand-by electrical power" means electricity supplied periodically or intermittently to a person to make good any shortfall in the availability of electricity to that person from its own generation for the purposes of its supply of electricity to domestic consumers seeking such supply, where such shortfall arises from the generating station being wholly or partly out of commission for a temporary period.

Class C: Distribution to non-domestic consumers
Persons (other than licensed distributors) who do not at any time distribute electrical power for the purpose of giving a supply to domestic consumers or enabling a supply to be so given with that electrical power.



SCHEDULE 4
Article 3(1)(c)


EXEMPTIONS FROM SECTION 4(1)(c) OF THE ACT (SUPPLY EXEMPTIONS)


Class A: Small suppliers
Persons (other than licensed suppliers) who do not supply any electricity except electricity which they generate themselves and who do not at any time supply more electrical power than 5 megawatts of which not more than 2.5 megawatts is supplied to domestic consumers.

     A.1. For the purposes of Class A electrical power supplied by a body corporate which is associated with any supplier shall be treated as supplied by that supplier.

Class B: Resale
Persons (other than licensed suppliers) who - 

    (1) do not supply any electricity except - 

    (2) to the extent that they supply Class C electricity - 

     B.1. For the purposes of Class B - 

     B.2. The conditions referred to in paragraph (2) in Class B are as follows.

    (1) In respect of each relevant premises the supplier must not in the previous year have supplied from those relevant premises an amount of Class C electricity which is more than 10 per cent of the Class C electricity supplied in that year to those relevant premises.

    (2) If during a year the supplier starts to supply Class C electricity from any particular relevant premises for the first time, at the time he starts to make such supplies he must reasonably expect that the total amount of Class C electricity supplied by him during the remainder of that year from those premises will be no more than 10 per cent. of the Class C electricity supplied in that year to those relevant premises.

    (3) In respect of each relevant premises the supplier must not in any year supply from those relevant premises more that 250 megawatt hours of Class C electricity to domestic consumers.

     B.3. A supplier shall not, if and to the extent that it would lead to his falling outside Class B, be treated as supplying Class C electricity to any premises during a year in which the relevant premises are being supplied with electricity by licensed suppliers, unless he supplies more electricity in that year than the amount of electricity which is supplied to those relevant premises by licensed suppliers in that year.

Class C: On-site supply
Persons (other than licensed suppliers) who - 

    (1) do not supply any electricity except - 

    (2) provide the output of each generating station at which they generate electricity only to - 

     C.1. The following provisions have effect for the purposes of Class C.

    (1) Where at any time the supplier in question and some other person generate electricity at the same generating station or provide the output of the same generating station, the generation of electricity by that other person or the provision of the output of that generating station by that other person shall be treated as the generation of electricity and the provision of the output of that generating station respectively by that supplier if that other person, being a body corporate, is associated with that supplier.

    (2) Two or more generating sets which are operated by the same person or by bodies corporate which are associated with each other shall be treated as a single generating station if they are on the same site as each other (whether or not there is an electrical interconnection between any of them) but otherwise shall be treated as separate generating stations, and in this sub-paragraph - 

     C.2. In Class C - 

provided that the owner of those wires is not a licensed distributor.

Class D: Offshore supply
Persons (other than licensed suppliers) who - 

    (1) do not supply electricity except electricity which has been generated at a generating station which is situated on an offshore installation; and

    (2) do not supply such electricity to any premises except premises which constitute or are comprised in an offshore installation.



EXPLANATORY NOTE

(This note is not part of the Order)


This Order revokes and re-enacts the Electricity (Class Exemptions from the Requirement for a Licence) Order 1997 with amendments. It grants exemption from the requirements of section 4(1)(a) of the Electricity Act 1989 ("the Act") (which prohibits the generation of electricity without a licence), section 4(1)(bb) of the Act (which prohibits the distribution of electricity without a licence) and section 4(1)(c) of the Act (which prohibits the supply of electricity to premises without a licence) to persons of various classes. The classes of persons who are exempt from the requirement to hold a licence to generate electricity are set out in Schedule 2, the classes of persons who are exempt from the requirement to hold a licence to distribute electricity are set out in Schedule 3 and the classes of persons who are exempt from the requirement to hold a licence to supply electricity to premises are set out in Schedule 4. A person may qualify for exemption by falling within more than one class in a Schedule (article 3(2)).

This Order applies to Great Britain. However, the exemptions granted to persons falling within Class C and Class D in Schedule 2 only apply to persons whose generating stations were connected to the transmission system and the distribution systems in England and Wales on 30th September 2000.

In addition to minor and drafting amendments, this Order makes the following changes of substance:

Article 4(4)(b) partially implements Article 14.3 of Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 [O.J. No. L27/20 30.1.97]. The implementation is completed by licence conditions.

A regulatory impact assessment is available and can be obtained from the Energy Policy Directorate, Department of Trade and Industry, 1 Victoria Street, London SW1H 0ET. Copies have been placed in the libraries of both Houses of Parliament. A copy of any direction issued under article 4(6)(a) and (b) and (8) may be obtained from the Gas and Electricity Markets Authority, 9 Millbank, London SW1P 3GE.


Notes:

[1] 1989 c. 29; section 5 was inserted by section 29 of the Utilities Act 2000 (c. 27).back

[2] The Authority was established under section 1(1) of the Utilities Act 2000.back

[3] S.I. 1999/1750; article 4 and Schedule 3 provide that functions under section 5(1) of the Act are, in so far as they are exerciseable in or as regards Scotland, only exercisable after consultation with the Scottish Ministers.back

[4] The definition of "supply" was substituted in section 4(4) of the Electricity Act 1989 by section 28(1) and (3)(b) of the Utilities Act 2000.back

[5] A new section 6 was substituted by section 30 of the Utilities Act 2000.back

[6] S.I. 1995/738.back

[7] 1988 c. 1.back

[8] 1985 c. 6; section 258 was inserted by section 21 of the Companies Act 1989 (c. 40).back

[9] The definition of "distribute" was inserted into section 4(4) of the Electricity Act 1989 by section 28(1) and (3)(a) of the Utilities Act 2000.back

[10] Section 736 was substituted by section 144(1) of the Companies Act 1989.back

[11] S.I. 1997/989.back

[12] S.I. 2000/2424.back



ISBN 0 11 038649 3


 © Crown copyright 2001

Prepared 11 October 2001


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URL: http://www.bailii.org/uk/legis/num_reg/2001/20013270.html