Energy reforms to cut bills and put power back in people's hands
The Energy Independence Bill will cut bills for households and put power back in people's hands with a fairer energy system.
- Energy Independence Bill builds on the Budget by delivering a major overhaul of Britain’s energy system, putting affordability and public control at its heart
- New laws will underpin plans to scrap gas standing charges, protect household bill savings and crack down on rogue energy companies and landlords
- Communities to get a greater stake in clean energy projects, alongside reforms to speed up grid connections
- Delivers on manifesto commitment to issue no new oil and gas licences to explore new fields in the North Sea
Families and businesses will benefit from a fairer energy system, cheaper bills and greater public control under landmark legislation introduced to Parliament today (Wednesday 4 November).
The Energy Independence Bill is a down payment on longer-term reforms that will fix Britain’s broken energy system, putting affordability at its heart, while unlocking barriers to deliver clean power.
Building on last week’s Budget, the government will bring forward amendments to the Bill to support plans to scrap standing charges on household gas bills, ending the daily charge paid even when no gas is used.
The move will give around 23 million households greater control over their energy costs, with around 60% of gas account holders expected to save an average of £45 a year.
The Bill will also put the decision to shift 75% of domestic Renewables Obligation costs from energy bills to public spending on a lasting legal footing, protecting savings already delivered to households.
It follows last week’s Budget, which announced a £100 payment for up to 20 million households in England this winter, and further reforms to prevent unnecessary policy costs being added to energy bills.
Prime Minister Andy Burnham said:
For too long, families have paid the price for an energy system that isn’t working for them. Bills are too high and events around the world can send costs soaring.
That’s why we’ve taken immediate action to help people with energy bills, with £50 off the annual price cap and our new £100 energy payment for 20 million households. And this Bill will make the changes needed for the long-term: protecting people when energy companies let them down, giving communities a stake in the power produced on their doorstep, and building more cheap, green power here at home.
Together, these changes will bring bills down for good, give families greater security and put Britain back in control of its energy future.
Energy Secretary Miatta Fahnbulleh said:
Energy is an everyday essential. No one should have to worry about being ripped off by rogue companies or see bills driven up by price shocks thousands of miles away.
Today is a first downpayment on fixing a broken system, protecting consumers from unfair costs and putting the public back in control.
Through this Bill, we will build a clean energy future which people feel in their pockets, households and communities, ensuring support reaches those who need it most.
Other measures in the Bill include:
- Stronger consumer protections: Giving Ofgem tougher powers to crack down on rogue energy companies and bosses, including unfair bonuses, while regulating energy brokers to tackle mis-selling and hidden commissions, expected to save businesses around £100 million a year
- Warmer homes for renters: Giving local authorities stronger powers to tackle rogue landlords who fail to meet energy efficiency standards, including fines of up to £30,000, supporting plans to save households in upgraded rented homes around £210 a year by 2030
- Making home upgrades easier: Establishing the Warm Homes Agency in law to help families access support to improve their homes and cut heating costs.
- Putting power in local hands: Requiring developers to offer communities up to a 20% stake in new renewable projects, alongside mandatory community benefits so local people share in the rewards
- Building a stronger grid: Establishing publicly owned Great British Grid in law through an upcoming amendment, alongside reforms to speed up electricity infrastructure and help homes and businesses connect faster
The Bill will also deliver on the government’s pragmatic approach to the North Sea, by ending new licences to explore new oil and gas fields while supporting continued production from existing licensed areas.
New Transitional Energy Certificates will enable further production in already explored areas, including through existing infrastructure. This could unlock around 60 million barrels of oil and support hundreds of jobs.
Oil and gas will remain part of Britain’s energy mix for decades to come. The government is committed to a fair transition, backed by the £2 billion Energy Wealth Fund and North Sea Jobs Service, supporting workers and investment in the industries of the future.
Together, these reforms mark the first step towards a more affordable, clean energy system, with stronger consumer protections, greater public control and communities sharing in the benefits of renewable and low carbon power.
Notes to editors
The Energy Independence Bill will update the laws governing consumer protection, support with bills, home upgrades and energy infrastructure. The Bill will:
Deliver a fairer deal for consumers
Strengthening Ofgem:
Energy markets have changed, but regulation has not always kept pace, leaving gaps in consumer protection. The Bill will strengthen Ofgem’s duties, remit and enforcement powers so it can act faster against wrongdoing and secure stronger redress when households and businesses are let down.
Renewables Obligation costs:
Moving 75% of domestic Renewables Obligation costs to the Exchequer has already removed around £90 a year from average household bills. But the current powers need renewing every 6 months. The Bill will put this funding on an enduring legal footing for the period to March 2029, with powers to require suppliers to pass the savings on, including to customers on fixed deals.
Energy brokers and price comparison services:
Hidden commissions, pressure selling and mis-sold contracts can leave consumers paying too much, with limited ways to challenge unfair treatment. The Bill will bring energy brokers and price comparison services under Ofgem regulation, with consistent standards and powers to order compensation, impose fines and ban rogue operators. The government estimates this could save businesses more than £100 million a year in costly mis-selling and hidden commissions.
Charges on electricity exported to the grid:
Consumers currently face charges on electricity they store and return to the grid, while other charges discourage the use of surplus renewable power. The Bill will enable these charges to be removed, helping households and businesses benefit from batteries, electric vehicle-to-grid charging and cheaper electricity when there is an abundance of clean electricity generation.
Better data for energy-support schemes:
Current data-sharing rules can make it harder to identify and support bill payers facing energy related challenges who fall outside the legal definition of fuel poverty. The Bill will widen those rules so future energy support can better reach eligible bill payers facing high bills, greater energy needs or hard-to-heat homes, while maintaining existing privacy safeguards. The bill will also expand government’s ability to provide future targeted support with energy bills for low-income and vulnerable households when required.
Upgrade homes and empower communities
Warm Homes Agency:
Families face a confusing mix of schemes and organisations when trying to insulate their homes or switch to clean heating. The Bill will enable existing schemes and functions to be transferred either to the Warm Homes Agency or to another body, giving consumers a trusted source of advice and support and helping deliver the Warm Homes Plan.
Minimum Energy Efficiency Standards:
Weak enforcement can leave tenants paying to heat cold homes and inefficient business premises. The Bill will give local authorities stronger powers to enforce energy-efficiency standards across the domestic and non-domestic private rented sectors, including better compliance information and a maximum civil penalty of £30,000 for breaches of domestic regulations. The measure will support the move to EPC C from 1 October 2030 which is expected to reduce average energy bills in upgraded properties by £210 a year, while helping lift households out of fuel poverty.
Schemes providing support with energy bills:
Existing powers place limits on the government’s ability to target support to households in need more effectively. The measure will ensure the government has the powers needed to intervene swiftly and effectively when required, without needing to rely on emergency legislation during an energy price shock.
Smart meters and battery storage:
Government’s powers to drive the smart meter rollout expire before its planned completion and communications upgrade, while existing smart-appliance powers do not cover batteries. The Bill will extend smart-meter oversight powers to 2033 and allow government, if needed, to require batteries to have smart capabilities, helping consumers use and store electricity when it is cheaper.
Community benefits:
Benefits for communities hosting energy projects are voluntary and vary between places. The Bill will allow government to introduce requirements on operators of new onshore wind and ground mount solar projects over 5 MW to enter legally binding benefit agreements with local community groups with minimum contribution levels and greater transparency. Communities will decide how benefits support local priorities.
Community energy and shared ownership:
Communities do not always have a clear route to invest in and benefit directly from local clean-energy projects. The Bill will support shared ownership by amending existing primary powers to give local people greater opportunities to take a stake in the projects near them.
Deliver homegrown clean energy we control
Reformed National Pricing:
Electricity market rules were not designed for today’s growing renewable generation, and lengthy reform processes can leave investment and grid development poorly coordinated. The Bill will provide targeted powers to update market rules, network charging and trading arrangements, helping Britain use clean power more efficiently and reduce overall system costs.
Land rights, consents and grid infrastructure:
Outdated consent and land-access processes can delay the grid upgrades needed to connect clean power, homes and businesses. The Bill will modernise permissions, access rights and processes for essential works, helping networks build faster while maintaining protections for landowners, communities and the environment.
North Sea transition:
The Bill will end new licences, introduce Transitional Energy Certificates to support existing offshore fields throughout their lifetime, and update the North Sea Transition Authority’s objectives and powers to better equip the regulator in its role as a steward of the transition.
Fracking:
The Bill will end new licences for onshore oil and gas fields in England, including licences that could be used for shale-gas fracking.
Rights for offshore renewable workers:
Some offshore renewable and low-carbon workers beyond UK territorial waters lack the employment protections available to offshore oil and gas workers. The Bill will enable these gaps to be closed, extending protections such as the minimum wage, protection against unfair dismissal and working-time rights, helping ensure clean energy jobs offer fair treatment and good working conditions.