Energy Act 2023 receives Royal Assent

Following a longer than anticipated passage through Parliament the Energy Act 2023 has now received Royal Assent.

The Act is a substantial piece of legislation. It provides the framework for the Government's plans to reform the UK's energy systems to ensure security of supply, develop resilience in the system and enable the UK to reach its net zero ambitions. The Act provides the mechanism through which the Government's hydrogen and CCUS business models will be implemented and puts in place structures for systemic reform of the energy system, such as the statutory basis for a new Independent Systems Operator and Planner (known outside of the Act as the Future Systems Operator) and a regulatory framework for multi-purpose interconnectors.

As is typical for UK primary legislation, for the majority of the above, although the Act lays the foundations for the new regimes, the detail of how it will operate is largely reserved for secondary legislation. The Secretary of State, therefore, retains considerable discretion as to whether, and how, to implement the Act through new regulations.

Passing of the Act into law will be welcomed by energy transition project developers, technology providers, investors and financiers alike. The Act will formalise the Government’s commitment to the transition and unlock the mechanisms through which funding and greater regulatory certainty can be secured to facilitate the much needed acceleration of growth in the UK’s energy transition markets.

We have been closely following the development and progression of the Act through Parliament, and analysing key aspects for many of our clients. If you have questions on the impact of this key piece of legislation, our energy experts would be very happy to discuss these with you.