Explained: Will the government’s Energy Bill deliver the green transition needed?

A new Energy Bill has been announced in the Queen’s Speech “to deliver the transition to cheaper, cleaner and more secure energy”.

The bill comes just a month after the government released its Energy Security Strategy, which similarly outlined how the UK will move away from dependence on imported fossil fuels towards “secure, clean and affordable British energy for the long term”. 

The strategy was heavy on nuclear and offshore wind, but was criticised for being light on onshore wind, pledging more oil and gas exploration, and failing to include measures for helping households with soaring energy costs in the short-term.

In particular, energy experts and campaigners were disappointed that the strategy failed to include measures for upscaling home insulation to reduce fuel poverty and carbon emissions.

Here’s what we know about the Energy Bill.

What are campaigners hoping for from the Energy Bill?

Ahead of the Queen’s Speech, think tank Green Alliance joined with 31 other organisations, including Greenpeace, RSPB and The Wildlife Trusts to call for five actions in the Energy Bill:

• Insulate homes
• Unlock clean energy
• Build a flexible, digital grid
• End reliance on expensive fossil fuels
• Protect the most vulnerable

A joint statement from the group said: “The current wholesale price of gas is already putting huge pressure on the already stretched incomes of millions of people across the UK – through rising prices and spiralling bills – and this is only set to get worse. 

“The Energy Bill to be announced today offers a real opportunity to start to turn the tide on this crisis, building out cheap, clean energy, and taking simple, effective steps to make warming our homes affordable.”

What does the Energy Bill include?

So does the new Energy Bill address all these concerns? Only partially, says Jess Ralston, analyst at the Energy and Climate Intelligence Unit, (ECIU) who has warned that the bill may focus on technologies in the long-term at the expense of bringing down energy costs for ordinary households immediately.

According to a government briefing on the bill, the main components will be the following:

● Introducing “state-of-the-art business” models for carbon capture technologies and carbon storage

● Reducing the risk of fuel supply disruption by giving Government the power to give directions to, require information from, and provide financial assistance to core fuel sector businesses

● Supporting industry to step up investment in growing the consumer market for electric heat pumps by providing for a new market standard and trading scheme. This intends to bring the cost of heat pumps down

● Appointing Ofgem as the new regulator for heat networks

● Extending the energy price cap until 2023, which limits how much suppliers can charge customers for energy

● Enabling the first ever large-scale hydrogen heating trial to assess the role hydrogen will play in the path to net zero

● “Introducing competition” in Britain’s onshore electricity networks

● Creating a new “pro-innovation regulatory environment” for fusion energy.

● Introducing a “future system operator” which would sit at the heart of the UK’s electricity and gas infrastructure, managing energy supply, demand and planning, and helping the UK prepare for net zero. This would effectively re-nationalise key responsibilities that have been carried out by the privatised National Grid.

● Facilitating the “safe, and cost-effective clean-up” of the UK’s legacy nuclear sites

What do campaigners think of the policies? 

Already, energy experts and campaigners are concerned the Energy Bill will fail in the same ways as the energy strategy, focusing on the long-term at the expense of fixing higher costs for households.

In particular, the details released so far are another blow to campaigners lobbying for more home insulation in the UK – with no mention of measures to upscale the process.

Simon Cran-McGreehin, Head of Analysis at the ECIU, said:

“With the Energy Security Strategy focussing on technologies like nuclear that might play a role but not for years to come, there’s a risk that the Government is distracted trying to pass new legislation to fund those costly options, when it could instead be focussing on steps that will give more immediate help to hard-pressed households struggling with rising energy bills.

“Cheap renewables can be deployed rapidly, and even more so once the Government follows through on its commitment to make simple changes to planning rules in England to align with overwhelming public support for renewables including onshore wind. 

“And with millions more households facing being trapped in fuel poverty for several years, insulation schemes can easily be expanded to cut bills and help reduce our national vulnerability to fossil fuel markets.”