With this it will be convenient to discuss the following:
Government new clause 12—Pilot scheme for electricity demand reduction.
New clause 2—Strategy for electricity demand reduction—
‘(1) The Secretary of State must within 12 months of the passing of this Act publish a strategy setting out policies to achieve a reduction in demand for electricity of at least 103 TWh by 2020 and 154 TWh by 2030.
(2) The strategy must include an assessment of the cost effectiveness of the policies included in it.
(3) Before publishing the strategy the Secretary of State must consult such persons as in his opinion may have information that will assist him in drawing up the strategy.
(4) The Secretary of State must—
(a) implement the strategy; and
(b) report to Parliament every year on progress.’.
Amendment (a) to new clause 2, line 11, at end add—
‘(5) Nothing in the strategy shall rely upon the use of the price mechanism to reduce demand.’.
Amendment 1, in clause 10, page 8, line 8, at end insert—
‘( ) Section 41(4)(a) of the Energy Act 2008 (“specified maximum capacity”) is amended as follows: “Specified maximum capacity” means the capacity specified by the Secretary of State by order, which must not be less than 10 megawatts.’.
Amendment 42, page 8, line 8, at end insert—
‘( ) Regulations must—
(a) place a duty on the Secretary of State and the Authority to promote new generation capacity from distributed generation schemes; and
(b) define “distributed generation schemes”.’.
Amendment 43, page 8, line 8, at end insert—
‘( ) In section 41(2)(a) of the Energy Act 2008, at end insert—
“() establishing, or making arrangements for the administration of, a scheme of financial incentives to encourage the distributed generation of electricity;”.’.
Amendment 44, page 8, line 8, at end insert— In section 41(2)(b) of the Energy Act 2008, at end insert—
“() requiring or enabling the holder of a distribution licence to make arrangements for the distribution of electricity generated by distributed generation;”.’.
Amendment 45, page 8, line 8, at end insert—
‘( ) In section 41(2)(c) of the Energy Act 2008, at end insert—
“() requiring the holder of a licence to make arrangements related to the matters mentioned in paragraph () or ().”.’.
Amendment 46, page 8, line 8, at end insert—
‘( ) Section 41(4)(a) of the Energy Act 2008 (“specified maximum capacity”) is amended as follows—
“specified maximum capacity” means the capacity specified by the Secretary of State by order, which must not exceed 50 megawatts.’.
Amendment 47, in clause 15, page 10, line 13, at end insert—
‘(d) conferring on the Secretary of State the power to establish an auction market (the “green power auction market”) in which generators are entitled to offer, and holders of supply licences are entitled to bid for, electricity generated from renewable sources.
(e) the the Secretary of State must exercise the powers in subsection (d), and take such other steps as they consider necessary, for the purposes of ensuring that—
(i) the green power auction market begins to operate when the first CFD is made and does not cease to operate until expiry of the last CFD that has been made; and
(ii) the reference price under a CFD entered into by a generator who is a party to any agreement made through the green power auction market is based on the price payable to the generator under that agreement,
(iii) in this section, “supply license” means a licence under the section 6(1)(d) of the Energy Act 1989.’.
Amendment 34, in clause 21, page 12, line 41, leave out ‘this section’ and insert ‘subsection (1)’.
Government amendment 100.
Amendment 35, in clause 21, page 13, line 6, at end insert—
‘(4A) The Secretary of State must within one year of the passing of this Act make regulations establishing a scheme or schemes to make payments for the purpose of rewarding the installation of energy saving measures.
(4B) Regulations under subsection (4A) are referred to in this Chapter as “demand reduction regulations”.
(4C) Prior to the making of regulations under subsection (4A), the Secretary of State must publish a report setting out the total potential for energy demand reduction and the extent to which this potential will be achieved by Government policies including—
(a) the scheme or schemes, and
(b) other relevant programmes, regulation or expenditure.’.
Amendment 36, in clause 22, page 13, line 13, at end insert—
‘(1A) Demand reduction regulations must make provision about demand reduction payments.’.
Amendment 37, page 13, line 21, at end insert—
‘(2A) Subject to any further provision made under this Chapter, a demand reduction payment is an instrument by virtue of which—
(a) an energy user is paid for reducing the demand for energy or investing in a technology which can be shown to reduce the demand for energy either permanently or for a specified period;
(b) all electricity suppliers may be required to make payments (“demand reduction payments”) to or for the benefit of these users.’.
Amendment 38, page 13, line 23, at end insert—
‘(3A) Provision included in regulations of demand reduction payments for the purposes of subsection (2A) may make provision about the meaning of “energy user”.’.
Amendment 39, page 13, line 41, at end insert—
‘(4A) Provision included in regulations of demand reduction payments by virtue of subsection (2A) may include provision about—
(a) the terms of a demand reduction payment;
(b) the circumstances in which, and the process by which, a demand reduction payment may or must be made;
(c) the persons who may be paid;
(d) the circumstances in which and technologies for which payments may be made;
(e) the number and size of payments;
(f) the means by which demand reduction payments are to be calculated;
(g) a person or body who is to administer the settlement of demand reduction payments (“a settlement body”);
(h) the enforcement of the terms relating to demand reduction payments;
(i) the resolution of disputes relating to a demand reduction payment payment;
(j) the circumstances in which a demand reduction payment may be terminated or reclaimed or varied;
(k) the circumstances in which a demand reduction payment may be assigned or traded;
(l) the means for monitoring and verifying the energy reduction for which demand reduction payments are made.’.
Amendment 40, page 14, line 6, at end insert—
‘(5A) Provision falling within subsection (4A) includes provision—
(a) conferring on the national system operator the function of issuing demand reduction payments;
(b) about any conditions that must be satisfied by or in relation to a person before that person may receive a demand reduction payment;
(c) about any matters in relation to which a person must satisfy the national system operator before the person receives a demand reduction payment.’.
Amendment 41, page 14, line 9, at end insert—
‘(6A) Provision made by virtue of this section may include provision requiring a person to consent to the inspection of plant or premises, either before or after that person receives a demand reduction payment.
(6B) Subject to the provisions in section 24, the Secretary of State must within six months of the making of demand reduction regulations establish a fund drawn from capacity payments for the purpose of issuing demand reduction payments.’.
Government amendment 135.