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Energy Bill [Lords] - Sitting 5

06 June 2023

Proposing MP
Andrew Bowie Con
West Aberdeenshire and Kincardine
Type
Public Bill Committee

At a Glance

Issue Summary

The clause enables regulations for enforcement measures related to hydrogen levy requirements and ensures consistent regulatory regimes for independent system operators. The statement addresses the complexities of decommissioning oil and gas facilities that have been repurposed for carbon capture usage and storage (CCUS) under the Petroleum Act 1998. The statement discusses amendments related to decommissioning funds and liability for carbon capture and storage facilities, particularly addressing concerns about repurposed assets and chain of liabilities. Andrew Bowie discusses the designation of a carbon capture, usage and storage (CCUS) strategy and policy statement under Clause 94 of the Energy Bill. Clause 98 and associated amendments aim to enhance the Oil and Gas Authority's (now North Sea Transition Authority) regulatory powers over carbon storage licensees. Andrew Bowie discusses the regulation of access to carbon dioxide transport and storage infrastructure, as well as an amendment related to financial assistance. The statement discusses amendments to the Energy Bill related to financial assistance for carbon capture and storage (CCUS) projects and low-carbon heat schemes. Andrew Bowie discusses the proposed amendment regarding low-carbon heat schemes and gas boiler bans. Andrew Bowie discusses the Energy Bill's provisions for a low-carbon heat scheme to encourage installation of efficient heating appliances like electric heat pumps.

Action Requested

The clause allows regulators to issue orders, impose financial penalties, and consider possible licence revocation to secure compliance with hydrogen levy requirements. It also provides the Secretary of State with powers to enforce requirements on independent system operators and planners.

Key Facts

  • The regulations enable enforcement measures for securing compliance with hydrogen levy requirements.
  • Regulators can issue orders, impose financial penalties, and consider possible licence revocation.
  • The clause ensures a consistent regulatory regime for the independent system operator and planner.
  • Amendment 88 aims to clarify financial responsibility and legal duties for CCUS.
  • Decommissioned oil and gas plants may be repurposed as CCUS facilities.
  • Part IV of the Petroleum Act 1998 governs abandonment of offshore installations.
  • Amendment 88 seeks to expand the scope of guidance on decommissioning funds.
  • The Petroleum Act 1998 governs offshore decommissioning.
  • Clauses 91 and 92 update sections 30A and 30B of the Energy Act 2008 for carbon capture, usage, and storage (CCUS) facilities.
  • Clause 94 provides the Secretary of State the authority to designate a CCUS strategy and policy statement.
  • The designated statement sets out strategic priorities, outcomes, and roles for implementing CCUS policy.
  • Ofgem is required to take account of strategic priorities in its CCUS-related functions as per clause 40.
  • Clause 98 requires carbon storage licensees to obtain NSTA approval for changes in control.
  • The NSTA can revoke licences if consent is not obtained before a change of control occurs.
  • Currently, the NSTA can only take remedial action after an undesirable change has occurred.
  • Regulations are in place governing access to carbon dioxide transport and storage infrastructure.
  • Amendments may be made to existing regulations through new regulations under section 2(2) of the European Communities Act 1972.
  • Amendment 21 aims to ensure consistency with clause 134 regarding financial assistance.
  • Government amendment 21 removes 'out of money provided by Parliament' from clause 103.
  • £20 billion investment in CCUS is committed for the establishment and expansion of industrial clusters.
  • Amendment 89 proposes a ban on unabated gas boiler installations in new properties from March 2025 and all properties after March 2035.
  • The Government are introducing a future homes standard in 2025 requiring new properties to be equipped with low-carbon heating.
  • There is an intention to phase out the installation of new natural gas boilers from 2035 in existing properties.
  • The amendment would make regulations for low-carbon heat schemes conditional on an appliance ban, which the Minister argues is not appropriate.
  • The UK's fossil fuel gas consumption for heating represents nearly 50% of total demand.
  • An estimated 90% of UK homes are technically capable of being heated by heat pumps.
  • Work is ongoing to assess the feasibility of converting parts of gas networks to supply 100% hydrogen, targeting strategic decisions by 2026.
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