New Energy Act will bolster energy security and deliver net zero, says government

The Energy Act 2023 has received Royal Assent and has become law. It’s the biggest piece of energy legislation in the UK’s history and the government says it will transform the energy system by strengthening energy security, supporting the delivery of net zero and ensuring household bills are affordable in the long term.

There are new measures for energy smart appliances to prioritise safety and give consumers the confidence to transition to smart products.

The government is expanding Ofgem’s remit to heat networks, enabling the regulator to set rules on excessive pricing and improve the quality of service for the UK’s half-a-million heat network consumers.

It updates also Ofgem’s remit so that it considers net-zero targets as part of its everyday decisions, and facilitates the first large village hydrogen heating trial, to provide evidence on the technology’s role in decarbonising heat.

The government is also introducing a licensing framework for CO2 transport and storage to help deliver the UK’s first carbon capture sites.

There are new consumer protections and frameworks, incentivising the heating industry to invest in low-carbon heat pumps, and including powers to deliver the smart meter rollout by 2028.

Energy Security Secretary Claire Coutinho said: “The Energy Act is the largest piece of energy legislation in a generation. It lays the foundations for greater UK energy independence, making us more secure against tyrants like Putin, and helps us to power Britain from Britain.

“The Act also supports our new approach to make sure that families don’t feel a disproportionate financial burden as we transition to net zero, and forms a central part of our efforts to keep people’s bills affordable in the long term.”

A new independent body, the Future System Operator, will ensure consumers can access a secure and decarbonised energy supply, which the government says is key to enhancing energy security. The FSO will be responsible for systems in the gas and electricity network developing efficiently and keeping consumer bills low.

Emma Pinchbeck, chief executive of trade body Energy UK, said: “As the world shifts its focus towards net zero, the energy sector needs long-term certainty to remain internationally competitive and attract private investment. This critical piece of legislation is a welcome step in delivering that confidence by establishing new business models, improved customer protections, and frameworks for investment across the energy sector.

“The broad-ranging measures in this Act are part of a collaborative effort between government, industry, business and consumer groups to deliver a modern energy system fit for the changing needs of the 21st century energy market. More work remains to establish frameworks that these powers enable, but this Act will be the foundation upon which the new energy system will be built.”

Ofgem CEO Jonathan Brearley said: “[The Energy Act] gives Ofgem the powers to drive through the energy transition – unlocking investment, accelerating planning and building the infrastructure the economy needs. This will give us security from volatile world gas markets and end our dependency on fossil fuels.

“Consumers have faced a huge number of challenges in recent years, with high energy prices and cost-of-living pressures. The Act will give extra protection for existing and future customers, while powering the journey to net zero at the lowest possible cost to households and businesses. We’re now working closely with government, consumers and sector to implement the legislation in full.”

Clare Jackson, CEO of Hydrogen UK, said: “The passing of the Bill has been a priority for the hydrogen industry as it will lay the foundations for the UK’s future hydrogen economy, by creating provisions for a Hydrogen Production Business Model, and Hydrogen Transport and Storage Business Models. This firmly indicates to the global hydrogen economy and international investors that the UK is serious about its net zero future, and the role hydrogen can play in it.”