The UK's new Energy Act 2023, which received Royal Assent on 26 October 2023, is the biggest piece of energy legislation in the UK's history. It aims to transform the UK's energy system by strengthening energy security, supporting the delivery of net zero, and ensuring household bills are affordable in the long term.
The Act includes a wide range of measures, including:
- Establishing a new Future System Operator (FSO), which will be responsible for planning and operating the UK's electricity and gas networks in a way that meets net zero targets and ensures energy security.
- Expanding Ofgem's remit to include heat networks, allowing the regulator to set rules on excessive pricing and improve the quality of service for consumers.
- Providing new powers to deliver the smart meter rollout by 2028, which could generate total bill savings to households of £5.6 billion.
- Incentivizing the heating industry to invest in low-carbon heat pumps.
- Supporting the development of new energy technologies, such as hydrogen and carbon capture and storage (CCS).
The Act is expected to create significant savings for energy users, stimulate thousands of new jobs in the energy sector, and unlock private investment into UK energy assets.
Strengthening energy security
The Act includes a number of measures to strengthen the UK's energy security, including:
- Increasing the UK's renewable energy capacity, with a target of 50GW of offshore wind by 2030.
- Investing in nuclear power, with a target of 24GW of nuclear capacity by 2050.
- Supporting the development of new energy storage technologies.
- Diversifying the UK's energy supply, including by importing more gas from Norway and Qatar.
These measures will help to reduce the UK's reliance on imported fossil fuels and make the UK's energy system more resilient to shocks.
Supporting the delivery of net zero
The Act includes a number of measures to support the UK's transition to a net zero energy system, including:
- Setting a target of net zero greenhouse gas emissions by 2050.
- Requiring energy suppliers to sell a higher proportion of renewable energy.
- Supporting the development of new low-carbon technologies, such as hydrogen and CCS.
- Providing financial incentives for businesses and households to switch to low-carbon energy sources.
These measures will help the UK to reduce its greenhouse gas emissions and reach its net zero target.
Ensuring consumer bills are affordable in the long-term
The Act includes a number of measures to ensure that household energy bills are affordable in the long-term, including:
- Providing support to low-income households through the Warm Home Discount scheme.
- Introducing a new energy efficiency scheme to help households reduce their energy bills.
- Investing in renewable energy and other low-carbon technologies, which will help to reduce the cost of energy in the long-term.
These measures will help to ensure that everyone in the UK can afford to heat their homes and power their businesses.
The UK's new Energy Act is a landmark piece of legislation that will transform the UK's energy system. It will help to strengthen energy security, support the delivery of net zero, and ensure that household bills are affordable in the long-term.
The Act is a welcome step forward for the UK's energy transition. It provides the necessary framework to support the development and deployment of low-carbon energy technologies, and to help the UK reach its net zero target.