Ministers are reviewing the recently published Energy Security Bill to ensure it reflects the revamped government’s priorities, Utility Week has been told.
The Independent reported last night that Jacob Rees-Mogg, who was appointed secretary of state for business and energy by new prime minister Liz Truss last week, has told officials to put the bill on hold.
According to the report, No 10 Downing Street is focused on overhauling the wholesale market to decouple the price of electricity from that of gas and introduce more localised pricing to kickstart the development of renewable energy.
A Utility Week source, who is close to government, said the bill is being reviewed to ensure that it reflects ministerial priorities but is not being “dropped entirely at this stage”.
Alongside replacing the price cap with a two-year freeze on the unit price of energy, last week’s announcement from government also included moves to accelerate supply, including lifting the moratorium on fracking of natural gas.
The Energy Security Bill, which was pledged in May’s Queen’s Speech, is currently being scrutinised by the House of Lords.
The legislation, published in the wake of Truss predecessor Boris Johnson’s British Energy Security Strategy, contains a wide-ranging set of measures.
The key ones for the industry are provisions to establish a new independent Future Systems Operator to oversee gas and electricity.
Other moves include introducing a new mandate on boiler manufacturers and suppliers to ensure a proportion of their output is heat pumps, giving Ofgem oversight of heat networks, creating a regulatory and licensing framework for the carbon, capture and storage (CCS) and hydrogen sectors and enabling larger energy suppliers to buy out smaller competitors’ obligations under the energy companies obligation (ECO) scheme.
The Association of Decentralised Energy (ADE) warned that any move to abandon the bill would be a “grave mistake”.
Lily Frencham, chief executive of the ADE, said: “Framing this as a focus on bringing down bills vs. market reform is flawed – the two are not mutually exclusive, and in truth, market reform is key to bringing down bills permanently.
“The Energy Security Bill provides a chance to scale up energy efficiency deployment, accelerate the rollout of heat networks and make the market truly flexible – these changes will slash bills in not only the short-term, but over the next thirty years.
“If we are to tackle the current crisis and prevent it from ever happening again, it is essential that the Energy Bill continues to move through Parliament at pace.”
Tim Lord, former director of clean growth at the Department for Business, Energy & Industrial Strategy (BEIS) wrote on Twitter that if the government is “serious about driving investment, pausing/cancelling the Energy Bill would be a very strange move”.