Energy UK has called for the introduction of a new Energy Bill as part of a commitment by the sector to deliver a net-zero power system in the 2030s.
The pledge, outlined in a new report out today (27 October), follows on from the government’s commitment to a decarbonised system by 2035 which was confirmed in its Net Zero Strategy.
It called for an end to further investment in new, unabated gas generation without “clear plans” to access carbon capture and storage technologies or utilise low or zero-carbon gas.
The report said the sector is fully committed to working with the government to reach its target of achieving a 78% reduction in greenhouse gas emissions by 2035 and then net zero by 2050.
It added: “Our industry will play a central role in attaining these targets and stands ready to deliver. We are confident that, with the right policies in place, a net zero power sector can be delivered in the 2030s.
“This is the decade for delivery and ambitious and urgent policy action from government will catalyse investment and keep costs for customers down. This is why we believe an Energy Bill is critical in this parliament.”
Energy UK called for market frameworks to support low-carbon technologies like annual Contracts for Difference auctions, linking the UK Emission Trading System (ETS) to the EU ETS, final investment decisions on new nuclear, a reduction in planning and infrastructure barriers and “comprehensive system and market reform”.
It said the government should introduce a comprehensive package of regulation, incentives and financial support for able to pay customers to enable them to decarbonise their homes by 2050. Specific and targeted support for vulnerable and fuel poor customers should also be brought forward to ensure that the transition to low carbon homes and technologies is fair.
The allocation of policy costs onto electricity bills should be reviewed, as well as wider taxation frameworks, including VAT and business rates, to ensure consumers are given clear signals when decarbonising their demand.
“Reconsider the proposals in the retail strategy, which will disincentivise innovation in the retail market for net zero, and instead bring forward retail market reforms which create a sustainable industry and enable suppliers to provide attractive propositions for technologies such as heat pumps, energy efficiency and smart tariffs to their customers,” it added.
Energy UK’s chief executive, Emma Pinchbeck, said: “The current challenges facing the energy sector, and the wider economy, only emphasise the need to accelerate our journey to a future where we won’t be at the mercy of volatile fossil fuel prices.
“As this report shows, the energy sector is fully committed to meeting that challenge. Over the last few years, the industry has shown that with the right policies in place, change can happen quicker – and at less cost – than anyone thought possible.
“But the energy sector cannot do this alone so we need the government to help deliver the policies and actions to enable this transformation and create a better future for our environment, our economy, our health – and our customers.”