Nuclear Energy (Financing) Act 2022
| Year | 2022 |
Nuclear Energy (Financing) Act 2022
2022 Chapter 15
An Act to make provision for the implementation of a regulated asset base model for nuclear energy generation projects; for revenue collection for the purposes of that model; for a special administration regime for licensees subject to that model; and about the circumstances in which bodies corporate are not associated with site operators for the purposes of programmes relating to funding the decommissioning of nuclear sites.
[31 March 2022]
e it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
PART 1
Nuclear energy generation projects: regulated asset base model
Introductory
1 Key definitions for Part 1
(1) This section applies for the purposes of this Part.
(2) “” means a company that holds an electricity generation licence in respect of a nuclear energy generation project.
(3) References to a “designated” nuclear company are to a nuclear company in relation to which a designation under section 2(1) has effect.
(4) A nuclear company is a “relevant licensee nuclear company” if—
(a)
(a) the company’s electricity generation licence contains modifications made under section 6(1), and
(b)
(b) the company is a party to a revenue collection contract.
(5) “” means a licence under section 6(1)(a) of the Electricity Act 1989.
Designation of nuclear company
2 Designation of nuclear company
(1) The Secretary of State may by notice given to a nuclear company designate the company in relation to a nuclear energy generation project in respect of which the company holds an electricity generation licence (“the nuclear project”).
(2) The Secretary of State may designate a nuclear company under subsection (1) only if the designation criteria are met in relation to the company.
(3) The designation criteria are that—
(a)
(a) the Secretary of State is of the opinion that the development of the nuclear project is sufficiently advanced to justify the designation of the nuclear company in relation to the project, and
(b)
(b) the Secretary of State is of the opinion that designating the nuclear company in relation to the project is likely to result in value for money.
(4) In this Part, “” means a notice under subsection (1).
3 Designation: procedure
(1) The Secretary of State must publish a statement setting out—
(a)
(a) the procedure that the Secretary of State expects to follow in determining whether to exercise the power under section 2(1), and
(b)
(b) how the Secretary of State expects to determine whether the designation criteria mentioned in section 2(3) are met.
(2) Before designating a nuclear company under section 2(1), the Secretary of State must—
(a)
(a) prepare draft reasons for the designation, and
(b)
(b) consult the persons listed in subsection (3) (including on the draft reasons).
(3) Those persons are—
(a)
(a) the nuclear company that the Secretary of State proposes to designate;
(b)
(b) the Authority;
(c)
(c) the Office for Nuclear Regulation;
(d)
(d) where any part of the site for the nuclear project is in England, the Environment Agency;
(e)
(e) where any part of the site for the nuclear project is in Wales, the Welsh Ministers and Natural Resources Wales;
(f)
(f) where any part of the site for the nuclear project is in Scotland, the Scottish Ministers and the Scottish Environment Protection Agency;
(g)
(g) such other persons as the Secretary of State considers appropriate.
(4) A duty imposed by subsection (1) or (2) may be satisfied by things done before the passing of this Act (as well as by things done after that time).
(5) A designation notice must include—
(a)
(a) a description of the nuclear project,
(b)
(b) the Secretary of State’s reasons for the designation (amended as appropriate in light of consultation under subsection (2)(b)),
(c)
(c) details of any conditions imposed by the Secretary of State in relation to the designation and of the consequences of a failure to comply with any such condition, and
(d)
(d) the date of the notice.
(6) The Secretary of State must—
(a)
(a) publish a designation notice, and
(b)
(b) in addition to giving the designation notice to the nuclear company being designated, give a copy of it to the other persons consulted under subsection (2)(b).
4 Expiry of designation
(1) The designation of a nuclear company under section 2(1) ceases to have effect—
(a)
(a) on the expiry date, or
(b)
(b) if the company enters into a revenue collection contract with a revenue collection counterparty before the expiry date, at the end of the day on which the revenue collection contract is entered into,
unless it ceases to have effect sooner in accordance with section 5(1) or (3).
(2) “”, in relation to the designation of a particular nuclear company, is—
(a)
(a) the end of the period of 5 years beginning with the date of the designation notice in question, or
(b)
(b) where one or more notices under subsection (3) have been given to the company, the end of the day specified in the last such notice.
(3) The Secretary of State may, before the expiry date that for the time being applies in relation to a designated nuclear company, give the company a notice providing that the new expiry date for the company’s designation is a day falling—
(a)
(a) after that date, but
(b)
(b) not more than 5 years from the date on which the notice is given to the company.
(4) Before giving a notice under subsection (3), the Secretary of State must consult—
(a)
(a) the designated nuclear company,
(b)
(b) the Authority,
(c)
(c) the Office for Nuclear Regulation,
(d)
(d) where any part of the site for the nuclear project is in England, the Environment Agency,
(e)
(e) where any part of the site for the nuclear project is in Wales, the Welsh Ministers and Natural Resources Wales,
(f)
(f) where any part of the site for the nuclear project is in Scotland, the Scottish Ministers and the Scottish Environment Protection Agency, and
(g)
(g) such other persons as the Secretary of State considers appropriate.
(5) Where the designation of a nuclear company ceases to have effect in accordance with subsection (1), the Secretary of State must publish details of that fact.
5 Revocation or lapse of designation
(1) The Secretary of State may by notice given to a designated nuclear company revoke the company’s designation under section 2(1) if—
(a)
(a) the company ceases to hold an electricity generation licence in respect of the nuclear energy generation project described in the designation notice, or
(b)
(b) either of the designation criteria mentioned in section 2(3) ceases to be met in relation to the company.
(2) Section 3(2), (5)(a), (b) and (d) and (6) applies (with necessary modifications) in relation to the revocation under subsection (1) of a nuclear company’s designation under section 2(1) as it applies in relation to the designation of a nuclear company under section 2(1).
(3) The designation of a nuclear company under section 2(1) ceases to have effect if—
(a)
(a) by virtue of section 3(5)(c), the designation notice specifies that failure to comply with a particular condition to which the designation is subject will result in the lapse of the designation, and
(b)
(b) the Secretary of State gives the nuclear company a notice under this subsection stating that the company has failed to comply with that condition.
(4) Where the Secretary of State gives a notice to a nuclear company under subsection (1) or (3), the designation of the company ceases to have effect at the end of the day on which the notice is given to the company.
(5) The Secretary of State must publish a notice given to a nuclear company under subsection (3).
Licence modifications
6 Licence modifications: designated nuclear companies
(1) The Secretary of State may modify—
(a)
(a) a condition of a nuclear company’s electricity generation licence;
(b)
(b) a term of a nuclear company’s electricity generation licence.
(2) The Secretary of State may exercise the power under subsection (1) only for the purpose of facilitating investment in the design, construction, commissioning and operation of nuclear energy generation projects.
(3) The power under subsection (1) may be exercised in relation to a nuclear company only at a time when a designation under section 2(1) has effect in relation to the company.
(4) When exercising the power under subsection (1), the Secretary of State must have regard to—
(a)
(a) the duties of the Secretary of State under sections 1 and 4(1)(b) of the Climate Change Act 2008 (carbon targets and budgets);
(b)
(b) the interests of existing and future consumers of electricity, including their interests in relation to the cost and security of supply of electricity;
(c)
(c) costs, expenditure or liabilities of any description that the nuclear company may reasonably be expected to incur in carrying out its activities;
(d)
(d) the need to secure that the nuclear company is able to finance its activities;
(e)
(e) the need to secure that the nuclear company has appropriate incentives in relation to the carrying out of its activities;
(f)
(f) such other matters as the Secretary of State considers appropriate.
(5) Modifications made under subsection (1)(a) may include, for example—
(a)
(a) provision about the revenue that the nuclear company may receive in respect of its activities (the company’s “allowed revenue”);
(b)
(b) provision about how the nuclear company’s allowed revenue is to be calculated;
(c)
(c) provision about the amounts that the nuclear company is entitled to receive, or is required to pay, under any revenue collection contract...
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