Britain’s energy regulator Ofgem will be legally required to push the country towards net zero carbon emissions under upcoming legislation.
Under a new specific duty, Ofgem will have to support the government to meet its legal obligation to get to net zero by 2050.
The role of Ofgem is historically to regulate the monopoly companies which run the gas and electricity networks and takes decisions on price controls and enforcement.
It already has a duty to consider a reduction in greenhouse gases, but under the new duty, it will be tasked with supporting the government to reach its 2050 net zero target, as required by the Climate Change Act 2008.
The duty will mean everyday decisions Ofgem makes as the regulator will have to assist the Secretary of State in meeting the UK’s net zero targets and carbon budgets.
‘End Our Historic Dependency On Fossil Fuels’
Ofgem CEO Jonathan Brearley welcomed the move and said:“Our fundamental objective will always be to protect the interests of existing and future consumers. It is at the heart of everything we do. 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.”
‘Weakened’
Net Zero policy critics claimed that the new duty shifted and weakened Ofgem’s role.Ben Pile, climate researcher and co-founder of Climate Debate told The Epoch Times that Ofgem has two choices, “net zero or consumers interest, pick one.”
“There’s no balance to be struck, they are binary opposites,” he said.
“The contradiction is all the way down and it is going to be a mess like the past 20 years of policy has been,” he added.
Andy Mayer, Energy Analyst at the think tank the Institute Of Economic Affairs told The Epoch Times by email that it was an “exercise in virtue signalling.”
“Ofgem, the regulator of energy markets, has a primary purpose to stand up for the interests of current and future consumers,” he said.
“This already means considering how to decarbonise in the most cost effective way possible through competition and innovation, without jeopardising the security of supply of heat or power,” he added.
Mayer said that the new power “increases the importance of statutory net zero targets” and is “a conflict of interest.”
“It means if a particular company or activist group has a hopelessly expensive idea to hit the target, they may challenge any objection using the new duty. This is a particular risk with larger more complex schemes where competition by the nature of the projects is limited. This exercise in virtue signalling then could be quietly adding billions to the cost of future bills and taxes,” he added.
Mayer said that it would be “better to focus on deregulation and reducing the barriers to competition within the sector, rather than increasing regulatory complexity with contradictory powers.”
“Rather than restoring Ofgem as a consumer champion, Rishi Sunak’s government is actually weakening the regulator’s ability to protect consumers against the unreasonable costs of the UK’s poorly designed and extremely expensive climate change policies,” it said.
“This is, quite simply, a deplorable mistake and will store up horrifying problems for future governments, to say nothing of the serious harm it will do to household wellbeing and the competitiveness of UK businesses,” it added.
It said that Ofgem’s original statutory duty “compelled it to promote the interests of existing and future consumers through the promotion of competition” and this “was a clear and rational objective for a consumer champion.”
Greenpeace UK’s policy director, Doug Parr, said: “We’re glad that the Government has seen sense on this. Ensuring the UK’s energy regulator has a legal requirement to help meet our emissions targets is critical to getting more renewables into our energy mix.”
The government’s Energy Bill, which aims to “accelerate the growth of low carbon technologies” is currently in the Committee Stage.
Minister for Nuclear, Networks and the Energy Bill Andrew Bowie told The Epoch Times by email:
“Strengthening energy security and meeting our net zero targets are two sides of the same coin and this latest update to our landmark Energy Bill reaffirms the government’s commitment to both.
“Ofgem’s principal objective is to protect the interests of existing and future consumers but as the government ramps up plans to Power Britain from Britain, the regulator’s remit must also adapt so it is empowered to build the energy system of the future.
“That’s why today the Government has clarified Ofgem’s duties to net zero while ensuring it retains an unwavering focus on its existing mandate on protecting consumers.
Solar
Last month, UK solar farm developers warned they face a 15–20 year wait to connect to local electricity grids.Blockages in the network mean that some solar farm developers will only be connected to local electricity grids by the 2030s, with the government recognising “the challenge of connection delays.”
In May, the trade organisation Solar Energy UK said that waiting times for large solar projects’ connection to the electricity grid, both on roofs and ground, “can often stretch well into the 2030s.”
The Epoch Times contacted Ofgem for comment.
