The government announced on 8 September 2022 that it will lift the moratorium on UK shale gas production, alongside a new Energy Price Guarantee for households and a six-month support scheme for businesses1. The announcement was made by the Prime Minister's Office, 10 Downing Street and the Department for Business, Energy & Industrial Strategy1.
On shale gas, the government said the change "will enable developers to seek planning permission where there is local support, which could get gas flowing in as soon as six months"1. It also said it will launch a new oil and gas licensing round as early as the following week, expected to lead to over 100 new licences1. The government framed these measures as part of a wider push to accelerate domestic energy supply and increase energy resilience, with an ambition to make the UK an energy exporter by 20401.
The household element is the Energy Price Guarantee. From 1 October, a typical UK household will pay up to an average £2,500 a year on its energy bill for the next two years1. The government said this will save the average household at least £1,000 a year based on current energy prices from October, and that it is automatic and applies to all households1. It comes in addition to the announced £400 energy bills discount for all households1. The guarantee limits the price suppliers can charge customers for units of gas, takes account of temporarily removing green levies worth around £150 from household bills, and will supersede the existing energy price cap1. The government will pay suppliers the difference between the new lower price and what retailers would otherwise charge1. Schemes previously funded by green levies will continue to be funded by the government during the two-year period1.
Support applies to all households in Great Britain, with the same level of support made available to households in Northern Ireland1. Households that do not pay direct for mains gas and electricity, such as those living in park homes or on heat networks, will be no worse off and will receive support through a new fund1.
For businesses and other non-domestic users, including charities and public sector organisations such as schools, a new six-month scheme will offer equivalent support to that provided for consumers1. The government said many businesses are reporting projected increases in energy costs of more than 500%1. After the initial six months, ongoing focused support will be provided for vulnerable industries, with a review in three months' time to consider where it should be targeted1.
"Lift the moratorium on UK shale gas production. This will enable developers to seek planning permission where there is local support, which could get gas flowing in as soon as six months."
| Measure | Detail |
|---|---|
| Energy Price Guarantee | Typical household pays up to an average £2,500 a year for two years from 1 October |
| Stated saving | At least £1,000 a year for the average household |
| Additional discount | £400 energy bills discount for all households |
| Green levies | Around £150 temporarily removed from household bills |
| Non-domestic scheme | Six-month scheme offering equivalent support, then targeted support after review |
| Shale gas | Moratorium lifted; planning permission where there is local support |
| Oil and gas licensing | New round as early as next week, expected to lead to over 100 new licences |
Why it matters for households
The guarantee caps what a typical household pays for units of gas, rather than capping the total bill, so a home that uses more energy than the typical household will pay more than £2,5001. Because the guarantee supersedes the existing price cap and is automatic, households do not need to apply1. The removal of green levies worth around £150 from bills is temporary, and the schemes those levies funded will continue to be paid for by the government during the two-year period1. For homes off the mains gas grid, such as park homes and heat networks, support comes through a separate fund rather than the guarantee itself1.
The shale gas and licensing measures concern domestic supply rather than household bills directly. The government links them to energy security and to reducing reliance on volatile global markets1. How quickly any shale gas would reach the grid, and what it would mean for household prices, is not set out beyond the statement that gas could flow in as soon as six months where there is local support1. The relationship between regulation and energy independence is central here, since planning consent and local support determine whether development proceeds. For households considering their own position, the wider context sits in household resilience and national risk.
What happens next
The Energy Price Guarantee takes effect from 1 October 2022 and runs for two years1. The non-domestic scheme runs for six months, with a review after three months to consider targeting1. A new oil and gas licensing round was expected as early as the week following the announcement1. A review of UK Energy Regulation will make recommendations on the structure and regulation of the energy market, and a separate review chaired by Chris Skidmore MP will report by the end of the year on meeting the Net Zero 2050 target1. The government said a new Energy Supply Taskforce, led by Madelaine McTernan, has begun negotiations with domestic and international suppliers on long-term contracts1.