Energy Security Bill Factsheet: Ofgem net zero duty (added 6 June 2023)
Updated 1 September 2023
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Summary
Amending the existing duties of the Gas and Electricity Markets Authority (the governing body of Ofgem) by including reference to the net zero targets in the Climate Change Act 2008 will require the regulator to consider how their decisions may assist the Secretary of State in meeting the government’s net zero targets.
This will also reaffirm government’s commitment and mandate in achieving our net zero targets and ensure that Ofgem’s role in net zero is clear.
How will the Bill achieve this?
This measure clarifies Ofgem’s role in supporting government to achieve the net zero targets in the Climate Change Act 2008 by giving the Gas and Electricity Markets Authority (the governing body of Ofgem) and the Secretary of State, a specific net zero duty which they will have regard to when carrying out their duties under Section 4AA of the Gas Act 1986 and Section 3A of the Electricity Act 1989.
It is an amendment to Ofgem’s existing duty to consider consumers’ interest in the reduction of greenhouse gases, by making specific reference to the net zero targets and 5-year Carbon budgets in the Climate Change Act 2008.
FAQ
Q1. What impact will there be by giving Ofgem a net zero duty?
Ofgem already has a duty to consider a reduction in greenhouse gases. However, updating Ofgem’s existing duties to make specific reference to the net zero targets and 5-year Carbon budgets in the Climate Change Act 2008 will mean that Ofgem will have a duty to consider, as part of the everyday decisions they make as the regulator, how their decision may assist the Secretary of State in meeting the UK’s net zero targets and carbon budgets.
Background
Ofgem’s duties are set out in the Gas Act 1986 and Electricity Act 1989.
Ofgem’s principal objective is to protect the interests of existing and future consumers. This includes consumers interests in the reduction of greenhouse gases.
We are updating Ofgem’s existing duties to make specific reference to the net zero targets and 5-year Carbon budgets in the Climate Change Act 2008.