Post: Energy Act passed to bolster energy security and deliver net zero

Energy Act passed to bolster energy security and deliver net zero

The Energy Act 2023, which aims to transform the UK’s energy system by strengthening energy security and supporting the delivery of net zero, has received Royal Assent.

The Energy Bill 2022-23 originally trailed as the Energy Security Bill in the Queen’s Speech on 10 May 2022, aims to build on the commitments in the April 2022 British Energy Security Strategy to invest in homegrown energy and maintain the diversity and resilience of the UK’s energy supply. The government also highlights the need for a “transformation of our energy system” and “more home-grown energy from more diverse sources”. When the Bill was first published in July 2022, the government set out the measures in the Bill, centred around three pillars:

• Leveraging investment in clean technologies
• Reforming the UK’s energy system and protecting consumers
• Maintaining the safety, security, and resilience of the energy systems across the UK

The Bill, as introduced in the House of Commons from the House of Lords, included a number of amendments added after government defeats. These included clauses introducing a net zero target for the energy regulator Ofgem, banning any new coal mines in the UK, provisions on community energy and provisions on energy efficiency for buildings.

According to the Department for Energy Security and Net Zero, this is the largest piece of energy legislation in a generation lays the foundations for an energy system fit for the future. The Act, which was passed into law on 26 October, aims to deliver a raft of new measures including the establishment of a new independent body – the Future System Operator with responsibilities in both the electricity and gas systems, ensuring efficient energy planning, enhancing energy security, minimising cost to consumers and promoting innovation.

Another measure included in the new law includes expanding Ofgem’s remit to take into account net zero targets as part of its everyday decisions and to reform energy codes, overhauling the way that the technical and commercial rules of the energy system are governed.

For large energy users the Bill also aims to improve the quality of the Energy Savings Opportunity Scheme’s audits and disclosures by businesses across the UK. This will include actions by the business to deliver more energy bill and carbon savings and it will provide powers to expand the scheme to include net zero elements in audits and more businesses. But it will also ensure that Energy Intensive Industries remain profitable by compensating them for a portion of their network charging costs.

The Act also sets out measures around hydrogen, nuclear power, carbon capture and storage, offshore energy production, and low-carbon heat.