Explanatory note

These Regulations are made in exercise of the powers in sections 32, 32A, 32J and 32K of the Electricity Act 1989 (c. 29) and sections 27, 28, 30, 32, 33 and 40 of the Energy Act 2013 (c. 32). They make provision about BICS excluded electricity, which is a proportion of electricity measured by meters in respect of a manufacturing site which is used to carry out certain manufacturing activities (defined as “specified activity” in these Regulations). BICS excluded electricity is then excluded from the calculations of a supplier’s liability under the Renewables Obligation Order 2015 (S.I. 2015/1947), the Electricity Capacity (Supplier Payment etc.) Regulations 2014 (S.I. 2014/3354) and the Electricity Capacity (Supplier Payment etc.) (Amendment and Excluded Electricity) Regulations 2024 (S.I. 2024/434).

Part 1 contains introductory provisions and includes a definition of “specified activity”.

Part 2 makes provision about BICS excluded electricity. Regulation 5 makes provision about how BICS excluded electricity is to be determined. Regulation 6 sets out the requirements that a person must meet for a BICS determination to be made by the Secretary of State. Regulation 7 sets out the requirements that must be met in an application for a BICS determination. Amongst other things, the application must be made by a person who uses electricity for a specified activity in the course of business. Regulation 8 makes provision about the proportion of electricity measured by meters in respect of a manufacturing site that will be excluded.

Regulation 9 requires a person in relation to whom a BICS determination has been made to notify the Secretary of State of particular matters if they arise. These include where any specified activity has ceased to be carried out, or where the person becomes aware of an error in a successful BICS application which means they were not entitled to have a BICS determination made. Regulations 10 and 11 contain a requirement for the person to provide, respectively, an annual declaration and a report to the Secretary of State and set out the information that they should contain. Regulation 12 makes provision about the validity and revocation of BICS determinations. Regulation 13 makes provision about the sharing of information by the Settlement Body (currently the Electricity Settlements Company, a private limited company owned by the Secretary of State for Energy Security and Net Zero) with the Authority (the Gas and Electricity Markets Authority, also known as Ofgem).

Part 3 contains amendments to the Electricity Capacity (Supplier Payment etc.) Regulations 2014. Regulation 15 amends those Regulations to include a definition of “BICS determination” and “CM BICS excluded electricity” so that this proportion of electricity can then be excluded from a supplier’s liability under the Regulations. “CM BICS excluded electricity” is the terminology used for “BICS excluded electricity” in the context of these Regulations. Regulation 16 amends the requirement for a supplier to provide certain forecasts to the Settlement Body to include a forecast of CM BICS excluded electricity that it will supply. Regulation 17 amends one of the charges payable by the supplier to take into account that forecast of BICS excluded electricity. Regulation 18 amends the provision about recalculation of payments so that revised or additional data in relation to CM BICS excluded electricity is used instead of data used previously or estimates. Regulation 19 amends the formula used to calculate suppliers’ liabilities to take account of the exclusion of CM BICS excluded electricity.

Part 4 contains amendments to the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015 (S.I. 2015/721). Regulation 21 amends those Regulations to include a definition of “BICS determination” and regulation 22 provides that a person cannot receive an EII certificate in relation to any amount of electricity in respect of which a BICS determination is in force. Regulation 23 amends the requirements relating to an application for an EII certificate so that an applicant must state whether they have a BICS determination and provide evidence of it if applicable.

Part 5 contains amendments to the Renewables Obligation Order 2015 (“the Order”). Regulation 25 amends that Order to include a definition of “BICS excluded electricity”, so that this proportion of electricity can then be excluded from a supplier’s liability under the Order. Regulation 26 amends the renewables obligation to exclude BICS excluded electricity. Regulation 27 contains an amendment which is consequential on the amendment in regulation 28 which amends the formula used to calculate suppliers’ liabilities to take account of the exclusion of BICS excluded electricity. It also makes provision for the determination of suppliers’ obligations for periods beginning on or after 1st April 2027 and for that determination to be revised, but only once and before 1st April 2027. Regulation 29 amends the requirements for suppliers to provide the Authority with information in connection with its obligations under the Order to include information in relation to BICS excluded electricity.

Part 6 contains amendments to the Electricity Capacity (Supplier Payment etc.) (Amendment and Excluded Electricity) Regulations 2024. Regulation 31 amends those Regulations to include definitions relating to CM BICS excluded electricity so that this proportion of electricity can then be excluded from a supplier’s liability under the Regulations. Regulation 32 amends Part 2 of the Regulations to set out how CM BICS excluded electricity is to be determined and make provision for the Settlement Body to share information, including with the Secretary of State and the Authority.

A full impact assessment of the effect that this instrument will have on the costs of business, voluntary bodies and community bodies is available alongside this instrument on https://www.legislation.gov.uk and from the Department for Business, Innovation, Science and Trade, Old Admiralty Building, Admiralty Place, London, SW1A 2DY.