Ofgem to receive legal mandate to prioritise the UK’s 2050 net zero target

Ofgem has welcomed the Government’s amendment to the Energy Bill giving the regulator a statutory net zero duty.

This will restate Ofgem’s principal objective to protect the interests of existing and future gas and electricity consumers.

It will add a specific duty to do so by supporting the Government meet its legal obligation to get to net zero by 2050, as required by the Climate Change Act 2008.

Ofgem’s proposed net zero duty:

• Ofgem’s principal statutory objective is to protect the interests of existing and future gas and electricity consumers.
• To date, this has included a general statutory duty to protect existing and future consumers’ interests by the reduction of greenhouse gases emissions in electricity and gas supply.
• The Energy Bill amendment will replace greenhouse gas emission wording with a specific reference to the Climate Change Act 2008.
• It gives Ofgem a specific net zero mandate to protect existing and future consumers’ interests by supporting “the Secretary of State’s compliance with the duties 1 and 4(1)(b) of the Climate Change Act 2008 (2050 net zero target and five-year carbon budgets)
• This will require Ofgem to apply and document this in decision making.
• The new duty will come into force two months after the Energy Bill gets Royal Assent.

Ofgem CEO Jonathan Brearley said: “Our fundamental objective will always be to protect the interests of existing and future consumers. It is at the heart of everything we do. Ofgem welcomes this mandate which brings us in line with the UK Government’s legal obligations and, for the first time, directly links consumers’ interests to specific net zero targets."

“We’re clear consumers are best protected by building a low-carbon, low-cost energy system, scaling up long-term investment and stabilising prices with clean energy. The mandate sends a clear message we must end our historic dependency on fossil fuels and stop our exposure to volatile global markets."

Find out more here.