In a programme heavily dominated with Brexit, the minority Tory UK government included a number of energy-related Bills and executive-led measures in the programme laid out in the Queen’s Speech. The speech itself was brief, referring expressly to;
- ‘Supporting international action against climate-change
- ‘Ensuring fairer markets for energy consumers
- ‘More support for the UK smart meter programme
- ‘A nuclear safety bill’ and
- A Bill to regulate and promote use of BPVs (battery-powered vehicles).
While no details on any new form of support for low-carbon generation was forthcoming, the high-level maintaining of commitment to the Paris accord will be welcomed by the renewables industry.
Nuclear Safeguards Bill
The Bill will establish a UK nuclear safeguards regime as we leave the European Union and Euratom. The Bill will give the Office for Nuclear Regulation powers to take on the role and responsibilities required to meet our international safeguards, and nuclear non-proliferation, obligations.
The main benefits of the Bill would be to continue the UK’s reputation as a responsible nuclear state, to support international nuclear non-proliferation, and to protect UK electricity supplied by nuclear power.
The UK is the largest market for BPVs in the EU and a global leader in electric vehicles’ development and manufacture – 1 in 5 electric cars sold in the EU in 2016 was made in the UK.
The Bill will ensure the UK continues to be ‘at the forefront of developing new technology in electric and automated road vehicles’. It will;
Allow the regulatory framework to keep pace with the fast evolving technology for BPVs, helping improve air quality.
Provide for the installation of charging points for electric and hydrogen vehicles
Extend compulsory motor vehicle insurance to cover the use of automated vehicles,
It will allow the government to require the installation of charge points for BPVs at motorway service areas and large fuel retailers, and to require a set of common technical and operational standards. This will ensure that charge points are convenient to access and work seamlessly right across the UK/ Scotland.
This supports the ambitions set out in the Tory Party manifesto for the UK to “lead the world in electric vehicle technology and use”, with “almost every car and van to be zero emission by 2050”.
Official research indicates that the market for automated vehicles in the UK will be worth £28 billion by 2035.
The Government is investing over £200 million in research and testing infrastructure to ensure the UK remains one of the best places to develop this technology.
There are now over 100,000 vehicles in the UK fleet that have benefited from the Government Plug-in Car Grant for BPVs.
More than 13,800 ultra low emission vehicles were registered in the first quarter of 2017, an increase of 17% from the same period in 2016 and the government has committed to spend £600 million during this parliament to support the growing market for ultra-low emission vehicles.
Smart Meters Bill
In order to help deliver more transparent energy bills and allow households to monitor their use effectively, the Bill will extend by five years powers to make changes to smart meter regulations, and make sure the roll-out is delivered effectively;
The purpose of the Bill is to ensure the successful realisation of the £5.7 billion of net benefits delivered by smart meters by ‘giving people control over their energy bills that they have not had before’.
With nearly seven million meters installed already by the end of March 2017, smart meters will provide a net annual bill saving of £300 million in 2020 across all households, rising to £1.2 billion a year in 2030.
Prime Minister May’s government has committed to extending the price protection currently in place for some vulnerable energy consumers to more of those on the poorest value tariffs.
It is ‘considering the best way to do this – whether through action by the regulator or legislation’.
Progress has been made in recent years to improve competition in the energy retail market, but it is clear that more needs to be done and the government will publish a Green Paper consultation on possible new measures to help tackle unfair practices in the energy market to help reduce energy bills.
Last year, 7.7 million gas and electricity customers (16% of the market) switched supplier, but around two thirds of domestic customers remain on poor value standard variable tariffs.
In March 2017, the average standard variable tariff for Big Six customers was £1,086 per year while the average cheapest tariff was £875 – showing that millions of customers could be saving around £211 every year.
In fact, the Competition and Markets Authority has already revealed that – collectively – domestic customers on standard variable tariffs were paying around £1.4 billion more than they would if the market were functioning effectively.
There are now over 50 energy suppliers in the domestic retail energy market, up from 13 in 2010.
Reaction from UK energy industry was mixed and qualified.
“We welcome the Government’s commitment to a new modern Industrial Strategy. Wind, wave and tidal energy are new industries which are already creating highly-skilled, high-paid jobs, exporting around the world.
Renewables can and should be the engine room of the Government’s flagship Industrial Strategy, driving our low-carbon economy.
“The need to reduce energy bills for consumers was also rightly highlighted in the Queen’s Speech. Renewable energy technologies are making record-breaking cost reductions, and clean energy tariffs are now competing with traditional low-cost tariffs to provide consumers with lower bills – we should continue this trend.
“It was important that the Government reaffirmed its strong support for action on climate change, including the implementation of the Paris Agreement. President Trump’s decision to turn his back on this has been greeted with bafflement and incomprehension in the US energy sector, as the global renewable energy market is worth $290 billion a year.
“The UK Government is showing leadership on energy policy and environmental issues which matter to the majority of the British public”.
Commenting on the five-year extension to powers to make changes to smart meter regulations, Rob Doepel, EY Energy Partner, said:
“The decision to extend powers to amend smart meter regulations is a prudent move, given both the speed of change in meter technology and the need to ensure the rollout is run as efficiently and effectively as possible for UK customers.
“We would hope that the detail of the Bill would include provisions to simplify the deployment challenge and enable greater collaboration between suppliers to deliver this critical upgrade to the UK’s energy infrastructure.”
Energy UK chief executive Lawrence Slade said: “Smart meters show consumers exactly what they’re spending in pounds and pence, in near real time. They mean an end to estimated billing, enable easier switching and give customers a greater understanding of their energy use, helping them save energy and money.
“The industry has already installed nearly 7 million smart meters in the UK. Suppliers remain committed to ensuring all households and businesses are offered a smart meter by 2020 and that the rollout is carried out efficiently and delivers a positive experience for consumers.”
Commenting on the announcement of a Bill on nuclear safeguards in the Queen’s Speech, Chief Executive of the Nuclear Industry Association, Tom Greatrex, said:
“Laying a Nuclear Safeguards Bill before Parliament may be a necessary legislative step to enabling the Office for Nuclear Regulation to take on safeguarding inspection responsibilities if the UK ceases to be part of Euratom. However, Government should not be so complacent to assume this alone gets close to resolving the issues they have created.
“The process of replicating safeguarding inspections, agreeing a series of nuclear co-operation agreements with other countries (including EU states), and guaranteeing world-leading international research into fusion at Culham in Oxfordshire, is complex and likely to be subject to intensive negotiation.
“In a week when the Chancellor has said leaving the EU should be done in a way that minimises the impact on jobs, growth and economic activity, the UK Government must ensure this is the case. If they are absolutely wedded to leaving Euratom, there must be transitional arrangements in place to prevent a damaging cliff-edge in 21 months’ time.
“Even at this late stage, seeking to negotiate a way to retain membership of Euratom is an infinitely preferable outcome. For a minority Government to announce a Bill, with no prior consultation, is largely symbolic and leaves much work to do.”
Political comment was more robust
Shadow Scottish Secretary Lesley Laird, MP, said: “The Queen’s Speech offers very little for Scotland, with nothing for our vital oil and gas industry.
“While Brexit will undoubtedly dominate parliamentary proceedings, Labour is ready to take up the reins when this chaotic Tory administration implodes.”
For the SNP, Kevin Stewart MSP said: “At a time when the oil and gas industry needs support and stability, Theresa May has appointed yet another Tory MP to the role of Energy Minister, which has been held by 19 different people in as many years.
“For the energy industry, this looks less like another reshuffle and more like musical chairs.
“It’s galling that the UK Government does not see the importance of the energy industry for the north-east, for Scotland and the UK as a whole.
“We want to see the men and women of the North Sea oil and gas sector receive the support they deserve from the UK government. They have earned the right to that support – no-one should forget that industry has generated more than £330 billion in tax revenues for the UK.
“Scots businesses, and the workers which depend on them, also need clarity on the Tories’ muddled and confused renewable energy policies.
“We have had a conveyor belt of energy ministers over the past few years and that is not good enough – this role is too important.”