The Energy Bill was introduced in the House of Lords on 6 July 2022, the government confirmed, describing it as legislation to deliver a cleaner, more affordable and more secure energy system1. The Bill is centred around three pillars: leveraging investment in clean technologies; reforming the UK's energy system and protecting consumers; and maintaining the safety, security and resilience of the energy systems across the UK1. The briefing covering parts 7 to 10 deals with the second pillar1.
Part 7 covers heat networks. Households that get their heat delivered through a heat network are not covered by the energy regulator Ofgem, and while the supply of gas to a heat network is regulated as a commercial supply, the supply of heat from the network to homes is not1. The proposals follow a Competition and Markets Authority report in July 2018 which recommended that the market should be regulated1. Under the Bill, Ofgem would regulate in England, Scotland and Wales, and the Utilities Regulator would regulate in Northern Ireland1. Part 7 also provides for designated heat network zones, where zoning will be used to require heat network installation in new buildings as the first option for heat provision, supporting the target to designate the first heat network zone by 20251. A Heat Network Authority and zone coordinators would have powers to designate zones, require buildings to be connected to a heat network and require waste heat to be connected to heat networks1.
Part 8 covers energy smart appliances and load control. An energy smart appliance is an internet-connected appliance that can adjust its electricity usage automatically based on signals received remotely1. The Bill would give the government powers to require such appliances to meet requirements on cyber security, data privacy, interoperability and grid stability, and would require load controllers to hold a licence issued by Ofgem1.
Part 9 covers the energy performance of buildings regime, currently governed by the Energy Performance of Buildings Regulations 2012, which are derived from EU law1. Those regulations require Energy Performance Certificates to be produced when a property is built, let or sold, and public buildings are required to display their EPC rating1. The Bill would give the Secretary of State powers to make new regulations, including prohibiting the marketing, letting and leasing of properties if their energy performance has not been assessed, certified and published1.
At Lords report stage, a non-government clause tabled by Baroness Hayman was added, requiring the Secretary of State to publish a "Warmer Homes and Businesses Action Plan" within six months of the Act's passage1. The amendment was agreed on division by 227 to 194, and added to the Bill as clause 2041. The plan would have to set out how the government intends to meet:
| Target | Deadline |
|---|---|
| EPC band C, all UK homes | 2035 |
| EPC band B, all non-domestic properties | 2028 |
| Future Homes Standard, all new builds in England | 2025 |
Part 10 covers the Energy Savings Opportunity Scheme, an energy assessment scheme requiring large businesses in the UK to audit the energy used by their buildings, industrial processes and transport at least every four years1. The Bill did not include ESOS provisions when introduced; the government announced its intention to introduce new provisions at the Lords second reading on 19 July 2022, and published its consultation response on 28 July 2022 confirming plans to reform ESOS1. Government amendments were agreed at committee stage to introduce the new Part 10, and further amendments at report stage would require ESOS regulations to provide for the right to appeal against financial penalties1.
The government has since removed the Energy Price Cap measure from the Bill, stating that it has been superseded by amendments to the Domestic Gas and Electricity (Tariff Cap) Act 2018 made by the Energy Prices Act 20222.
Why it matters for households
For a household on a heat network, the Bill is the first move towards bringing heat supply under the same regulator that covers gas and electricity customers, though the detail will be set out in regulations1. For homes with electric heating, an electric vehicle or large appliances, the load control provisions set the rules for equipment that shifts electricity use automatically, including on cyber security and data privacy1. The building energy performance powers sit behind the EPC that a home carries when it is built, let or sold, and the targets in the Hayman clause set dates for the housing stock as a whole1. The removal of the price cap measure means the Bill is not the route by which the cap itself is set2.
What happens next
The Bill's ESOS provisions were added by government amendment at Lords committee stage, with further amendments at report stage on appeal rights against financial penalties1. The heat network, smart appliance and building energy performance parts drew no opposition amendments1. The government factsheet page was last updated on 1 September 20232.