EXTENDS
The Renewables Obligation Order 2006

The Renewables Obligation Order 2006 (Memo)

EXPLANATORY MEMORANDUM TO THE RENEWABLES OBLIGATION ORDER 2006 No. 1004

EXPLANATORY MEMORANDUM TO

THE RENEWABLES OBLIGATION ORDER 2006

2006 No. 1004

1. This explanatory memorandum has been prepared by the Department of Trade and Industry and is laid before Parliament by Command of Her Majesty.

This memorandum contains information for the Joint Committee on Statutory Instruments.

2. Description

2.1 The Renewables Obligation is the Government's main policy measure to encourage the development of electricity generating capacity using renewable sources of energy in the UK. This Order, the Renewables Obligation Order 2006 (the "2006 Order") revokes and re-enacts with modifications the Renewables Obligation Order 2005 (SI 2005/926 - the "2005 Order"). The changes in the 2006 Order include amendment to the rules relating to biomass and electricity generated from mixed wastes by combined heat and power generating stations, as well as more detailed changes relating to the administration of the Renewables Obligation together with some drafting simplifications.

3. Matters of special interest to the Joint Committee on Statutory Instruments

3.1 None. However, owing to the complexity of the legislative and policy background to the 2006 Order, the "Policy Background" contains a relatively detailed summary of the main elements of the Renewables Obligation system and details of the changes to it proposed by the 2006 Order. The Department is also including, for the Committee's reference, a table showing where the provisions of the 2005 Order now appear in the 2006 Order.

4. Legislative Background

a) General

4.1 The 2006 Order is made under sections 32 to 32C of the Electricity Act 1989 and applies in relation to suppliers of electricity in England Wales. It revokes and re-enacts the 2005 Order with modifications. It also makes some limited changes to the Renewables Obligation system, as summarised in section seven below.

4.2 Following executive devolution of the relevant powers, in 2002 an Order for Scotland was made in terms virtually identical to the 2002 Order. It was subsequently amended and consolidated as the Renewables Obligation (Scotland) Order 2004

(S.S.I. 2004/170) and then again as the Renewables Obligation (Scotland) Order 2005 (S.S.I. 2005/185) (the "ROS"). The ROS applies in relation to suppliers of electricity

in Scotland. Corresponding amendments are now being proposed to the ROS and are intended to come into force on the same date as the 2006 Order.

4.3 Article 54 of the Energy (Northern Ireland) Energy Order 2003 (2003 No 419, NI 6), as amended by section 120 of the Energy Act 2004, contains provisions analogous to section 32B of the Electricity Act 1989 and applicable in Northern Ireland. The Northern Ireland Renewables Obligation Order 2005 (SI 2005/38) (the "NIRO"), made under the Energy (Northern Ireland) Energy Order 2003, came into force on 1 April 2005. This established a Renewables Obligation in Northern Ireland, the main features of which are analogous to...

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