Out-Law News 3 min. read
08 Jul 2022, 2:27 pm
Increasing the capacity of the UK’s low carbon energy supplies is essential to long-term energy security in Britain, experts have said.
Becca Aspinwall and Jeremy Chang, experts in energy market regulation at Pinsent Masons, were commenting after the UK government published a new Energy Bill, which includes provisions the government said will “leverage private investment in clean technologies”, help build “a homegrown energy system”, and “ensure the safety, security and resilience of the UK’s energy system”.
The introduction of the Energy Bill before parliament follows publication of the UK government’s revised energy security strategy in April, which it hastily drew up following Russia’s invasion of Ukraine. Russia’s invasion of Ukraine has increased pressure on the UK and other western economies to move away from using Russian fossil fuels. There is concern that some countries are too dependent on Russian oil, gas and coal for powering their homes and businesses, and that paying Russia to supply that energy is helping to support its illegal war.
The energy security strategy set out the government’s plans to increase the supply of North Sea oil and gas in the short term while scaling up the capacity of a range of energy technologies over the medium to longer term – including offshore wind, solar and low carbon nuclear. Further plans to boost the production of hydrogen and invest in carbon capture, use and storage (CCUS) were also detailed in the strategy.
The challenge will be to ensure that the momentum behind the drive to net zero is not lost – additional low carbon generation capacity can undoubtedly play a key role in ensuring the country’s energy independence
Some of the contents of the strategy require legislative change, and this is reflected in the Energy Bill. For example, the Bill provides for the establishment of a new ‘Independent System Operator and Planner’. It also provides for the regulation of heat networks, a new licensing regime for the transport and storage of CO2, and new government powers in respect of the energy performance of buildings.
Becca Aspinwall said: “The new Energy Bill and the energy security strategy from earlier this year perhaps represent a shift in focus of energy policy away from prioritising decarbonisation and the net zero agenda towards ensuring security of supply, which can be seen as a natural reaction to current geo-political events. The challenge will be to ensure that the momentum behind the drive to net zero is not lost – additional low carbon generation capacity can undoubtedly play a key role in ensuring the country’s energy independence.”
Jeremy Chang said: “From a regulatory perspective, a lot of what’s included in the Bill is not new. The establishment of a new ‘Independent System Operator and Planner’ was trailed in the spring. Its purpose is to oversee the energy network to work with suppliers and networks to help reach net zero, balance the UK’s electricity systems and ensure energy resilience and security. Similarly, it was also announced that Ofgem would be given new functions to oversee energy codes and their evolution, to make changes to the codes, and to license code managers. If these new functions are to result in long-term net benefit for industry and consumers, ensuring the affordability of the measures is fundamental.”
“The successful delivery of the strategy cannot be achieved in isolation and must be supported by a robust supply chain which can quickly scale up to respond to the challenge as well as a planning regime that can fast-track delivery of the infrastructure needed,” he said.
Also included in the new Energy Bill are provisions to support the final delicensing and re-use of nuclear sites. Those provisions are designed to reduce the cost of cleaning-up those sites, according to the government.
Michael Freeman of Pinsent Masons, who specialises in the regulation of the nuclear sector, said: “A key aspect of the Bill is to simplify the regulatory framework for nuclear sites in the final stages of decommissioning by modifying the application of the nuclear third-party liability regime to sites where the hazard and risk profile is comparable to non-nuclear industrial sites. The Bill effectively makes provision for these sites to be de-licensed at an earlier stage than at present, thereby removing them from the regulatory jurisdiction of the Office for Nuclear Regulation but retaining them under the control of the environmental regulators and the Health and Safety Executive.”
“This is a welcome measure, and indeed is consistent with international decisions and consensus on the matter. Safety, security and environmental protection are and will remain the fundamental governing principles of nuclear regulation in the UK, and the Bill does not undercut this. No nuclear site in the UK will be removed from the nuclear third-party liability and licensing regime unless and until de-licensing would be proportionate and commensurate with the risk profile of the site,” he said.
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