Government gives Ofgem statutory duty for net zero in Energy Bill change
Thu 08 June 2023
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The Government has given the energy regulator Ofgem a statutory duty in terms of net zero in an amendment to the Energy Bill. The amendment adds a specific duty to protect the interests of existing and future gas and electricity customers by supporting the Government in meeting its legal obligation to get to net zero by 2050, as required by the Climate Change Act 2008.
Ofgem's CEO Jonathan Brearley said: “Ofgem welcomes this mandate which brings us in line with the UK Government’s legal obligations and, for the first time, directly links consumers’ interests to specific net zero targets
“We’re clear consumers are best protected by building a low carbon, low cost energy system, scaling up long-term investment and stabilising prices with clean energy. The mandate sends a clear message we must end our historic dependency on fossil fuels and stop our exposure to volatile global markets.
“We’re laying the foundations for the energy system of the future. The net zero mandate has overwhelming backing from every part of the energy industry, consumer campaigners and climate activists. It underlines net zero is the best option, not only from a climate perspective, but to ensure a secure, low cost energy future.”
The Energy Bill amendment will replace greenhouse gas emission wording with a specific reference to the Climate Change Act 2008. It gives Ofgem a specific net zero mandate to protect existing and future consumers’ interests by supporting “the Secretary of State’s compliance with the duties 1 and 4(1)(b) of the Climate Change Act 2008 (2050 net zero target and five-year carbon budgets). This will require Ofgem to apply and document this in decision making.
Responding to the announcement Sir John Armitt, Chair of the National Infrastructure Commission said: “It’s good that the Government has seen the light on the need for Ofgem to be given an explicit net zero duty. The regulator now needs to use this mandate to build upon their recent decisions to accelerate strategic investment in the transmission network.
“Network investment is absolutely critical to achieving the large scale shift to renewable energy and low carbon transport and heating. In the forthcoming second National Infrastructure Assessment, the commission will make further recommendations on the governance changes needed to support the growth of the electricity network.”
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