Key Facts

• Two sets of new clauses have not yet been tabled.
• One set is related to Great British Nuclear.
• Another set pertains to assistance for energy-intensive industries.
• Government amendment 23 distinguishes carbon dioxide transport and storage from hydrogen.
• Amendments 28, 29, 36, 38, 40, 42-52, 60, and 73 are consequential on amendment 23.
• Amendment 30 supports the establishment of revenue support contracts for hydrogen transport and storage.
• New clause 29 designates a counterparty to administer hydrogen transport revenue support contracts.
• New clause 30 confers powers on the Secretary of State to issue directions to hydrogen transport counterparties.
• New clause 31 enables designation of a counterparty for administering hydrogen storage revenue support contracts.
• New clause 32 gives power to issue directions to hydrogen storage counterparties.
• The hydrogen counterparty is responsible for raising and distributing the hydrogen levy.
• Regulations enable payments to be made to levied market participants by the relevant counterparty or hydrogen levy administrator under clause 67.
• There are concerns about what happens if the strike price and reference price invert, leading to accumulation of funds in the counterparty's account.
• LCCC (Low Carbon Contracts Company) is expected to serve as the revenue support counterparty for hydrogen production, industrial carbon capture, and waste industrial carbon capture.
• The LCCC already has experience in managing contracts through its role with contracts for difference.
• The Department for Energy Security and Net Zero is assessing options for the most appropriate organisation to manage greenhouse gas removals business model.
• Alan Whitehead is concerned about the integration of functions between the carbon dioxide transport and storage counterparty and the LCCC.
• Andrew Bowie acknowledges potential risks but emphasizes ongoing assessment by Parliament to ensure the model remains fit for purpose.
• The territorial sea adjacent to the United Kingdom is defined as extending 12 nautical miles from the low-water line along the coast.
• The renewable energy zone extends beyond the territorial sea but within the UK’s exclusive economic zone.
• Hydrogen production can be co-located with offshore installations in the renewable energy zone.
• Amendment 84 aims to amend the definition of 'carbon capture entity' in clause 63(8).
• The government has tabled amendment 10, which includes similar wording to opposition's amendment.
• DACCS involves capturing carbon from air or sea and is an increasingly important element of carbon capture.
• Amendments made to clause 63 of the Bill enable the definition of 'carbon capture entity' and provide flexibility for multiple designations.
• Amendment 58 modifies clause 64, adding provisions for determining eligibility criteria for carbon capture entities under revenue support regulations.
• Clause 65, concerning the appointment of a hydrogen levy administrator, is agreed to stand part of the Bill.
• Government amendment 12 overturns an earlier amendment to ensure Exchequer funding of low-carbon hydrogen production.
• Amendment would restrict where a hydrogen levy could be placed, removing options for gas and electricity suppliers but allowing only on gas shippers.
• The UK hydrogen economy could support over 12,000 jobs and unlock up to £11 billion in private investment by 2030.
• Government amendment 59 expands existing provisions to fund hydrogen transport and storage business models through levy or Exchequer funding options.
• Amendment 117 seeks to widen the definition of relevant market participants beyond gas suppliers, electricity suppliers, and gas shippers.
• Government amendment 12 aims to overturn a previous restriction on who can be levied for hydrogen production.
• The proposed levy could add around £120 per year to customer bills by 2030.
• Hydrogen production is targeted at 10 GW by 2030, requiring an estimated £53 billion over ten years.
• The Energy Bill [Lords] has been strengthened by decisions made in the other place.
• There are existing policy costs on energy bills including renewables obligation (£80.26), feed-in tariff (£18.70), energy company obligation (£43.87), warm home discount (£20.60), and green gas levy (45p).
• Concerns have been raised about the public's fear of additional levies on their bills, particularly in relation to hydrogen generation.
• The public are losing faith in the climate agenda, with a growing movement against net zero goals.
• 1,000 people died in 2022 due to living in cold, damp homes unable to afford heating costs.
• There are 7 million people in fuel poverty in the UK last winter.
• The hydrogen levy could add approximately £118 to consumer bills.
• After 2030, the impact on consumer bills is expected to increase further as the UK looks to deliver its 2030 hydrogen ambitions for energy security.
• Think-tank Onward warns that the Government's approach risks stalling the development of a British hydrogen economy and is unfair to households not benefiting directly from hydrogen.
• The amendment in the other place was intended to enable Exchequer funding for the hydrogen business model.
• The initial phase of the hydrogen production business model will be Exchequer-funded.
• The Government paid half of everyone's energy bills last year, equivalent to £1,500 per person.
• Clause 69 is being discussed in relation to hydrogen production and carbon capture contracts.
• The clauses aim to establish a framework for competitive allocation processes for these contracts.
• Amendment 86 aims to insert provisions in clause 78 of the Energy Bill.
• The amendment would ensure surplus funds from gas shippers over necessary reserve levels are returned to customers.
• Clause 67 already enables regulators to make provision for payment arrangements and pass-through of payments received by a relevant counterparty.