Laying the foundations for an ‘energy system fit for the future’, the Energy Act 2023 is also expected to help unlock £100bn in private investment in energy infrastructure and scale up jobs and growth.

According to the UK government, by increasing competition in Great Britain’s onshore electricity networks through a new tender process – reducing costs for network operation and development – the Act will deliver a more efficient energy system in the long-term. This new model is forecast to save consumers up to £1bn off their energy bills by 2050, it claims.

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 £420mn 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 £10bn/y by 2050, suggests the UK government.

Ofgem’s remit is also being expanded under the Act, to include heat networks, allowing the regulator to set rules on excessive pricing and improve the quality of service for the half 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 £5.6bn.

The UK government says the Energy Act will help it ‘deliver net zero by 2050 in a pragmatic, proportionate and realistic way’.

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.

The new laws also make the UK the first country to legislate for nuclear fusion regulation. It is hoped this will allow developers ‘to plan with confidence’ and encourage investment, driving the UK’s ambition for a prototype fusion power plant by 2040.

Meanwhile, 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’. The FSO will be responsible for systems in the gas and electricity network developing efficiently and keeping consumer bills low.

Boost to UK North Sea oil and gas production 
In other UK news, The North Sea Transition Authority (NSTA) has awarded 27 licences in the Central and Northern North Sea, and West of Shetland, under the 33rd Oil and Gas Licensing Round, the first to be awarded from 115 applications for 258 blocks. More will be offered in due course, subject to additional environmental checks.

In addition to the 27 licences, six more blocks, which were also ready to be offered, have been merged into five existing licences.

The award of new oil and gas licences was decried by environmental organisations, with Greenpeace calling it ‘backwards’ and saying the UK was ‘fuelling the climate crisis instead of helping to fix it’.

Click here to read more on how the North Sea is being shaped for the future with the emergence of hydrogen and carbon capture schemes, plus more efficient hydrocarbon production.