New landmark legislation designed to reform the energy market has been introduced into law, with changes set to impact energy production, security and regulation. Here’s what you need to know:
The Energy Act 2023, which has gone through a number of iterations since first being put to Parliament in July 2022, was given Royal Assent last month and will, according to the government, ensure families don’t feel a disproportionate financial burden as the country moves towards net zero, whilst also boosting investment into clean energy and supporting skilled jobs in the sector.
Some of the key measures introduced by the new legislation include:
- The appointment of regulator Ofgem as the new regulator for heat networks as well as new legal powers as the economic regulator of CO2 transport and storage. The regulator will now also have a statutory duty to consider the impact of its decisions on helping to meet the government’s net zero target;
- Upscaling the carbon capture and storage process by introducing a licensing framework for CO2 transport and storage which will “help deliver the UK’s first carbon capture sites” and, according to the government, will support up to 50,000 jobs by 2030;
- The creation of a new independent body – the Future System Operator – which will be responsible for ensuring that systems in the gas and electricity network develop efficiently safely and building resilience in the system to secure a decarbonised energy supply;
- New measures to accelerate the development of offshore wind, including the creation of a newly introduced tender process;
- New commitments in the nuclear industry alongside Great British Nuclear;
- Allowing changes to be made to the offshore oil and gas environmental regime and establishing an offshore decommissioning charging scheme;
- Introducing competitive tendering into the expansion of Britain's onshore electricity networks, encouraging investment and innovation and enabling savings;
- Powers to introduce finance and government-backed project models for the transport and storage elements of carbon capture usage and storage and hydrogen projects, industrial carbon capture and low-carbon hydrogen;
- Extending the rollout of smart gas and electricity meters until 1 November 2028
- Leveraging potentially £100billion of private investment in clean technologies and infrastructure to support rapid industry growth.
Natalia Sokolov, Lead for the Thrings Clean Energy team, said: “The Energy Act is a landmark piece of legislation for the government in their efforts to demonstrate their commitment to achieving net zero – despite the lengthy back-and-forth in Parliament – but only time will tell whether these measures will have the desired impact.
“For many businesses this could mean onerous changes to longstanding practices, but it could also present opportunities for those ready to adapt early. With clean energy very much being a staple of the future as we progress towards net zero, business should make sure they are seeking quality professional and legal advice on how they can make improvements, not only to have a positive impact on the bottom line but to improve their business as a whole.”
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