The Energy Act 2023 has received its royal assent making the largest piece of energy legislation in UK history enshrined into law.
The act includes a new tender process to increase competition in Britain’s onshore electricity networks, which will cut costs for network operation and development. It is anticipated the new model will save consumers as much as £1bn by 2050.
A specific merger regime for energy networks will also be established under the Competition and Markets Authority to minimise the risk of mergers negatively impacting consumers – this is expected to save households up to £420m over the next 10 years.
New measures for energy smart appliances will give people the confidence needed to transition to smart products, ultimately helping them manage their consumption better and reduce overall bills. The government has indicated a smart electricity system has the potential to reduce costs by £10bn annually by 2050.
Ofgem’s remit has also been updated to encompass heat networks, enabling the regulator to rule on excessive pricing and enhance service quality for half a million people. Net zero goals will be a daily consideration for Ofgem under the new act.
This is the largest piece of energy legislation in a generation, and it will boost investment in clean energy, protect our energy independence and support thousands of skilled jobs across the country.— Department for Energy Security and Net Zero (@energygovuk) October 27, 2023
Learn more from Energy Secretary @ClaireCoutinho 📹👇 pic.twitter.com/FDxHmRx09n
The heating industry will be incentivised to invest in low-carbon heat pumps under the act, via new consumer protections and frameworks.
Up to 50,000 jobs will be supported by a new CO2 transport and storage framework, which will help deliver the UK’s first carbon capture sites.
Developers will be encouraged to drive forward plans after the act also makes the UK the first country to legislate for fusion regulation.
The introduction of a new independent body will give consumers access to a secure and decarbonised energy supply too – the Future System Operator will look to ensure systems in the gas and electricity network develop efficiently.
“The Energy Act is the largest piece of energy legislation in a generation,” said Claire Coutinho, the energy security secretary. “It will boost investment in clean energy technologies and support thousands of skilled jobs across the country.”
Minister for nuclear and networks, Andrew Bowie, added: “The government has listened to industry and modernised our energy legislation, creating the framework for further green growth.”
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