In a step that will further strengthen the nation’s energy security and improve consumer protection, new measures to advance the UK’s transition to a cleaner, more affordable, domestic energy system will be unveiled today.
Business and Energy Secretary Kwasi Kwarteng will present the historic Energy Security Bill, which contains 26 measures and was included in the Queen’s Speech, into Parliament today. It is the most important piece of energy legislation to be tabled in ten years.
In addition to enacting measures to promote long-term energy independence, security, and prosperity, it also builds on the government’s recent urgent support for citizens facing rising energy bills.
This support includes the British Energy Security Strategy, which was unveiled earlier this year.
By 2030, the Bill would encourage the private sector to spend an unprecedented £100 billion in new, long-lasting British industries that will diversify our domestic energy supplies, including offshore wind and hydrogen, and create almost 480,000 green employment.
Kwasi Kwarteng, the secretary for business and energy, said:
We must move forward with our plans to create a truly clean, cost-effective, domestic energy infrastructure in Britain so that we are no longer held captive by rogue states and volatile markets.
This is the most significant change to our energy grid in ten years. To make this goal a reality, we’re going to reduce red tape, attract investment to the UK, and seize as much global market share in innovative technologies as we can.
We will be able to stand on our own two feet once more, industrialize our economy once more, and shield the British people from exorbitant fossil fuel prices in the future thanks to the measures in the Energy Security Bill.
The introduction of measures that assist the wide-scale adoption of low-carbon technologies like carbon capture, use, and storage (CCUS) and hydrogen will encourage investment by providing businesses with the assurance they require. In order to lure additional private money into the UK, which will help create jobs and reindustrialize some areas of the country, the government is committed to guarantee that Britain gets a “first mover advantage” in capturing the worldwide market share in these technologies.
The Bill’s provisions, such as those promoting the installation of heat networks and lowering the price of extremely efficient electric heat pumps, will aid in scaling up the adoption of important clean technologies in the future, lessening the UK’s reliance on international fossil fuel markets and its exposure to fluctuating gas prices.
According to research, people who use heat networks typically pay less for their heating than people who use individual gas boilers, and switching from a gas boiler to a heat pump can cut a home’s energy use by more than 50%.
The expansion of the energy price cap past 2023 will be made possible by other new measures, protecting millions of customers nationwide from being overcharged.
The amount that suppliers can charge for each unit of gas and electricity as well as for the daily standing fee is capped by the price cap.
To ensure that consumers are charged a fair price, including by enabling the regulator to investigate disproportionate prices and take enforcement action, Ofgem will be appointed for the first time to oversee regulation of the heat networks market, which serves about 480,000 customers across Britain.
By allowing the Competition and Markets Authority to assess pertinent mergers under the new Energy Network Special Merger Regime, consumers will be shielded from rising network prices in the event that energy network companies consolidate.
Over a ten-year period, this could save consumers up to £420 million.
The Bill gives the Secretary of State the authority to take proactive measures to avoid potential disruptions to the downstream oil sector in order to prevent fuel supply disruptions caused by things like industrial action, malicious protest, and for reasons of national security.
The Bill mandates that business enhance their own resilience, share crucial data so that the government can foresee any interruptions, and implement other changes to guarantee supply continuity.
The Nuclear Energy (Financing) Act, which gained Royal Assent earlier this year, was the predecessor to today’s Bill, which is the most recent change to strengthen energy security.
The Nuclear Act introduces a new finance model to draw more private capital into brand-new nuclear power projects, lowering project financing costs and lowering consumer costs. The government reserves the authority to take a “special share” in any upcoming nuclear projects as a requirement for financial support through the new funding mechanism.
John Pettigrew, the chief executive of National Grid, said:
The British Energy Security Strategy’s helpful recommendations are built upon by the Energy Security Bill. In order to achieve the Government’s ambitious net zero goals, including delivering 50 GW of offshore wind power by 2030 and establishing an independent system operator and planner, National Grid plays a crucial role at the center of the energy transition.
We look forward to working with the Government to achieve these goals in the future.
Ross Easton, the Energy Networks Association’s director of external affairs, said:
The Energy Security Bill introduced today is a welcome chance to create a cleaner, more cost-effective, and more secure energy system because it is the first energy-specific law in almost ten years.
The role of our energy networks in integrating these technologies into the energy system has never been more crucial given the record numbers of electric vehicles, renewable energy capacity, and heat pumps being implemented, coupled with new technologies like low carbon hydrogen.
Dhara Vyas, Energy UK’s director of advocacy, said:
The UK economy and customers will gain from an inexpensive, clean electricity system that the energy sector is prepared to provide.
The Energy Security Bill will contribute to a more affordable and environmentally friendly system overall and long-term energy supply in the UK.
It is appropriate that the Government immediately enacts legislation to safeguard consumers when the cost of energy reaches new heights.
The Government should also provide frameworks and regulations to encourage the decarbonization of the UK economy, which will lower long-term costs.
Ruth Herbert, the Carbon Capture and Storage Association’s chief executive, said:
The development of our industrial regions and the reduction of the UK’s emissions depend critically on carbon capture, utilization, and storage.
By investing in new infrastructure, we can lead the world in the transition to net zero emissions.
The Energy Security Bill, which will put this framework into effect, was introduced in Parliament today thanks to collaboration between the CCSA and the UK Government.
Given their crucial role in our future low carbon economy, attracting inward investment, and preserving and creating green jobs for the future, we anticipate confirmation of the first wave of carbon capture projects and a clear plan for succeeding projects to move forward as soon as possible.