Last month, a new UK act laying the foundations for the country’s future energy system passed into law.
The “landmark” Energy Act will create new frameworks expected to release up to £100bn in funding for the UK’s future low carbon energy system. It will also give Ofgem additional powers to support the acceleration of the energy transition.
The UK government said this law will help ensure energy is affordable for businesses and make the UK more energy independent in the long-term.
With the Energy Act outlining a roadmap for the UK’s future energy system, what’s in it for your business? Read on as we break down the new Energy Act Law.
Efficiency and Cost Reduction
At its core, the Act aims to ensure affordable energy for households and businesses.
The Act envisions a more efficient energy system, utilising a new tender process to increase competition in onshore electricity networks. According to government estimates, this could save businesses and households up to £1 billion by 2050.
It is also expected to unlock £100 billion in private investment for energy infrastructure, fostering job growth.
A merger regime for energy networks will also be established to protect consumers, potentially saving households up to £420 million over the next decade.
Consumer protections and frameworks are included in the Act to incentivise investment in low-carbon heat pumps and facilitate the smart meter rollout by 2028, aiming for total bill savings of £5.6 billion.
Net Zero Commitments
The most notable net zero commitment is legislation to ensure that the UK will become the first country to legislate for fusion regulation. The law encourages investment in fusion technology and aiming for a prototype fusion power plant by 2040.
A licensing framework for CO2 transport and storage will also be introduced to support the UK’s first carbon capture sites. The government said this will introduce up to 50,000 green jobs by 2030.
Measures in the Act are also designed to accelerate the development of offshore wind, supporting the UK’s commitment to achieving net zero emissions.
The remit of the independent energy regulator, Ofgem, is expanded to heat networks, allowing regulation of pricing and service quality. Ofgem’s remit was also updated to consider net-zero targets in everyday decisions.
However, the Act establishes a new independent body, the Future System Operator, which will work to ensure a secure and decarbonised energy supply, focusing on gas and electricity networks to keep consumer bills low.
As the UK prioritises a sustainable energy future with the new Energy Act, businesses can navigate this transformative landscape with ClearVUE.Business.