Reaction among energy players and commentators continued today to the Queen’s Speech proposals for energy, including on the sector’s contribution to Britain’s ever-tightening cost of living crisis.
Industry leaders continued commenting, as this morning energy minister Greg Hands met some to launch a green jobs initiative, designed to create 480,000 ‘green collar’ roles by 2030. E-on’s CEO Michael Lewis co-chairs the employment delivery group.
Energy-related sections of the speech, the government’s outline of its new laws in the coming Parliamentary session, centred on an energy security bill. When published, its main elements will be
- Establishing a new Future System Operator, providing strategic oversight across electricity and gas systems. It will drive progress towards net zero, energy security and minimising consumer costs.
- Granting Whitehall powers to ensure continuity of supply, through new powers to demand information from, and provide financial assistance to, “core fuel sector businesses”.
- Extending the energy price cap, curbing overcharging by suppliers
- Spurring the market for electric heat pumps for consumer, though a new market standard and trading scheme.
- Widening Ofgem’s remit to regulate heat networks
- Introducing competition in onshore electricity networks
- Introducing state-of-the-art business models for Carbon Capture Usage and Storage (CCUS) transport and storage, low carbon hydrogen and capture of industrial carbon.
- Britain’s first large-scale trial of heating with hydrogen
- Backing nuclear fusion by creating a pro-competition regulatory environment
- Facilitating safe clean-up of legacy nuclear sites
Among 38 bills anticipated, another new law will “finalise the creation of the UK Infrastructure Bank..with clear objectives to support regional and local economic growth and deliver Net Zero”
Anthony Ainsworth, COO at npower Business Solutions, picked out the bank and energy bills as both key. The latter was welcome, since Parliament had not seriously updated energy legislation in almost 10 years, he said
“While we will await to see the detail of the Bill, its focus on delivering the plans laid out in the recent British Energy Security Strategy to ensure a clean, secure and stable energy supply for the UK is undoubtedly a good thing”, Ainsworth went on.
But the nPower boss had a caveat. “However”, as we have said before, any new legislation also needs to include measures to help businesses now as well as in the future, by protecting them from future volatility”. Government promotion of energy efficiency, or reforms needed to spur more on-site generation by businesses, were examples.
At analysts Cornwall Insight CEO Gareth Miller picked out the government’s new desire for powers “to require information from and provide financial assistance to core fuel sector businesses”.
Since the 1980s, the UK had relied on market signals in energy markets, and not government intervention, Miller noted.
On extending of Ofgem’s default tariff cap, the Cornwall boss pointed out its original legislation had seen it as time limited.
“Hopefully, the conditions which have triggered its extension will pass,” Miller added, “and it will be important to judge if and when the market can be freed up for the full benefits of innovation that technology promises for consumers, producers and providers of flexibility”.
New business models for CCUS, for hydrogen and industrial carbon were all important. The delivery of a thriving UK offshore wind sector shows the scale of prize that could be won, Miller judged
Windfall tax, emergency budget
Much in the bill builds on Johnson’s Ten Point Plan, transiting Britain to decarbonised energy, the Cornwall boss added.
Heat networks advocates the Association of Decentralised Energy (ADE) endorsed calls for fundamental market reform, as well as “institutional and cultural change” in the sector.
Speaking in advance of the speech Sarah Honan, the ADE’s officer on flexibility policy said: “At the ADE, we greatly anticipate the ..Speech setting out what we have been requesting for a long time – a bold and decisive energy bill that sets the scene for a future system where methods of controlling supply and demand are given an equal footing.”
Self-appointed to speak for Britain’s hydrocarbon-addicted motorists, Howard Cox founder of FairFuelUK called for an emergency budget, adding “the Queen’s Speech was full of promise for tomorrow, but nothing for today”.
The pro-petrol lobbyist criticised Johnson’s “mypoic drive for fashionable green policies”, and called for lower fuel duty, plus a one-off windfall tax on oil companies, its proceeds ring-fenced to help the worst sufferers from the cost of living crisis.
“Cutting VAT and green taxes from energy bills should be a no-brainer for any Chancellor”, Cox opined.
Cox administers the unofficial all-party Parliamentary Group for Fair Fuel for UK Motorists and UK Hauliers. Of its nine members, all but three are either Conservatives or the DUP’s Sammy Wilson. The back-bench interest group is chaired by Craig Mackinlay MP, chair of the Net Zero Scrutiny group, arch-sceptics within Tories at Westminster about energy decarbonisation and the climate emergency.
APPGs are not required to publish accounts or list their main funds providers. Parliament’s Committee on Standards this month reported its fears that the largely unregulated, unofficial groups could be open to undue influence, including from overseas interests.