The UK's energy landscape is on the brink of transformation as the Energy Act 2023, now with Royal Assent, prepares to enhance energy security, support the pursuit of net-zero emissions, and ensure enduring affordability for household energy bills.

The government has described this measure as 'the biggest piece of energy legislation in the UK’s history,' laying the groundwork for a future-ready energy system. 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.  Measures set to accelerate development of offshore wind are included.

Energy Security Secretary Claire Coutinho said "the Energy Act is the largest piece of energy legislation in a generation. It will boost investment in clean energy technologies and support thousands of skilled jobs across the country."

In that way, it will also help unlock £100 billion private investment in energy infrastructure and scale up jobs and growth. 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.  

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. 

Emma Pinchbeck, Chief Executive of trade body Energy UK, said that "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."

For his part, Ofgem CEO Jonathan Brearley explained that the 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".  

Finally, Clare Jackson, CEO of Hydrogen UK, explained that "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."