The government is resuming work on its delayed energy security bill as part of a package of measures to help implement prime minister Rishi Sunak’s pledge to secure British energy independence.
Business and energy secretary Grant Shapps announced on Tuesday (29 September) that he is committed to taking forward the British Energy Security Bill, work on which was paused under Sunak’s predecessor Liz Truss.
Shapps also confirmed the government will provide £700 million worth of backing for EDF’s Sizewell C nuclear plant, enabling Chinese state-backed CGN to be bought out from the project.
The energy security bill, which is the first primary energy legislation in nearly a decade, 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 ECO (energy company obligation) scheme.
The legislation, which was published in the wake of former prime minister Boris Johnson’s British Energy Security Strategy, has been stuck in the House of Lords since September.
Shapps also confirmed that the government will take a £679 million stake in Sizewell C to help get the project off the ground.
According to this morning’s BEIS announcement, EDF will also provide additional investment to match the government’s stake with both working to attract new third-party investment to help finance the 3.2GW project’s construction and operation.
The new investment enables China’s CGN to exit the project, including buy-out costs, any tax due and commercial arrangements, said BEIS.
Under a partnership, agreed in 2015 between CGN and EDF, the Chinese company had a 20% stake in the Sizewell C project.
Chancellor of the Exchequer Jeremy Hunt, who said in the Treasury’s Autumn Statement earlier this month that the government intended to press ahead with Sizewell C, said: “Today’s investment in Sizewell C represents the biggest step on our journey to energy independence – the first state backing for a nuclear project in over 30 years. Once complete, this mega project will power millions of homes with clean, affordable, home-grown energy for decades to come.
“Together with our drive to improve the nation’s energy efficiency, this package will help to permanently bring down energy bills and stop Britain being at the mercy of global gas prices beyond our control.”
Unions welcomed the confirmation of the government’s stake in Sizewell C.
Sue Ferns, senior deputy general secretary of Prospect, said: “After months of uncertainty this is a vital decision from the government and secures the future of Sizewell C.
“We cannot rest on our laurels however, as without swift progress of other new nuclear sites we will still face an impending energy gap that cannot be filled with renewables alone.
“The current rate of one approval every decade is far short of what is necessary for us to meet our net zero goals. The situation is too urgent for every decision to take many years.
“We cannot achieve either energy security or net zero without further new nuclear.”
Charlotte Brumpton-Childs, GMB national officer, said: “After years of prevarication, it’s great to see progress on Sizewell C finally being made.
“Without nuclear, there can be no net zero. This announcement is a long overdue step in the right direction.”