Source · Select Committees · Business and Trade Committee
Recommendation 60
60
Accepted
Paragraph: 240
Add explicit net zero duty to Ofgem's remit and publish updated Strategy and Policy Statement.
Recommendation
Even though we urged the Government to publish its already very delayed Strategy and Policy Statement for Ofgem back in July 2022, it has still not materialised. We recommend that an explicit duty to deliver on the statutory net zero target is added to Ofgem’s remit. We reiterate our previous call for the Government to publish an updated Strategy and Policy Statement for Ofgem which provides a very clear sense of direction to the regulator on how to manage the political and distributional trade-offs intrinsic to its responsibilities, as well as a clear delineation of its roles and responsibilities.
Government Response Summary
The government published its consultation on the Strategy and Policy Statement for Energy Policy in May 2023 and is content to amend Ofgem's existing duty to explicitly reference the net zero targets from the Climate Change Act 2008.
Paragraph Reference:
240
Government Response
Accepted
HM Government
Accepted
148. The Government published its consultation on the Strategy and Policy Statement (SPS) for Energy Policy in Great Britain on 10 May 2023. The consultation will run for 12 weeks, concluding on Wednesday 2 August 2023. 149. The SPS has been developed in accordance with the Energy Act 2013. It sets out the Government’s strategic priorities and other main considerations of its energy policy; the policy outcomes to be achieved as a result of the implementation of that policy; and the roles and responsibilities of those who are involved in implementation of that policy. 150. Ofgem and the Future System Operator, once established, will be required to have regard to the strategic priorities in the SPS when carrying out their functions. 151. Ofgem’s principal objective is to protect consumers interests, and this included consumers’ interests in the “reduction of greenhouse gases”. 152. However, the Government appreciates that an amendment was voted into the Energy Bill by the House of Lords to introduce a statutory net zero duty for Ofgem. The Government has carefully considered the effect of this amendment with Ofgem and sought legal advice, to ensure that the Lords’ amendment would not impact the hierarchy and intended effect of Ofgem’s duties. 153. The Government is therefore content to amend Ofgem’s existing duty to consider a reduction in greenhouse gases by making specific reference to the net zero targets in the Climate Change Act 2008, reaffirming the government’s commitment and mandate in achieving our net zero targets and ensuring that Ofgem’s role in net zero is clear.