Climate Action

New laws passed to bolster energy security and deliver net zero

The biggest piece of energy legislation in the UK’s history has become law, laying the foundations for an energy system fit for the future.

  • 31 October 2023
  • Press release

The biggest piece of energy legislation in the UK’s history has become law, laying the foundations for an energy system fit for the future.  

The Energy Act 2023 has received Royal Assent and will 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 will deliver a more efficient energy system in the long-term, helping to keep energy costs low. It will do this by increasing competition in Great Britain’s onshore electricity networks, through a new tender process, reducing costs for network operation and development. This new model is expected to save consumers up to £1 billion off their energy bills by 2050.  

A specific merger regime for energy networks will also be created under the Competition and Markets Authority. This will minimise the risk of mergers between energy network companies having detrimental effects on consumers and is estimated to save households up to £420 million over the next decade.  

There are also new measures for Energy Smart Appliances to prioritise safety and give consumers the confidence to transition to smart products, helping them to manage their energy consumption and reduce their bills. A smart electricity system could reduce system costs by up to £10 billion a year by 2050. 

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

The Act includes 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 – which could generate total bill savings to households of £5.6 billion.

The Act will help the government deliver net zero by 2050 in a pragmatic, proportionate and realistic way. It updates 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, providing crucial 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, supporting up to 50,000 jobs by 2030. 

These new laws also make the UK the first country to legislate for fusion regulation, enabling developers to plan with confidence and encourage investment into this flourishing technology, and driving the UK’s ambition for a prototype fusion power plant by 2040. 

Establishing a new independent body, the Future System Operator, will ensure consumers can access a secure and decarbonised energy supply, key to enhancing the country’s energy security.

Find out more">here.