Weekly News Review - 13th February 2023

Grant Shapps appointed secretary of new energy and net zero department

Prime Minister Rishi Sunak has reshuffled his cabinet with the Department for Business, Energy and Industrial Strategy (BEIS) being replaced by the Department for Energy Security and Net Zero. The new department will be led by former Business Secretary Grant Shapps.

The government said: “The changes will ensure the right skills and teams are focussed on the Prime Minister’s five promises: to halve inflation, grow the economy, reduce debt, cut waiting lists and stop the boats. A new Department for Energy Security and Net Zero, has been tasked with securing our long-term energy supply, bringing down bills and halving inflation.”

Rishi Sunak said he wanted “the country to have greater energy security and independence because we can’t be held to ransom by hostile foreign countries”. During his Conservative leadership campaign last summer, Sunak promised to re-establish a separate department for energy.

Ana Musat, Director of Policy at RenewableUK, said: “A Department for Energy Security and Net Zero can provide the clear focus we need on securing investment in renewables to cut energy costs and grow our economy. Global competition for clean tech supply chains is intensifying and we have a long way to go in our transition to net zero and industry wants to work with ministers to respond to this challenge.”

“Ministers and officials in the new Department have big decisions that need to be taken very soon if we’re to grow renewables fast enough, so industry will be pushing for the Spring Budget and upcoming Contracts for Difference round to boost the UK’s attractiveness for investment.”

However, opposition parties have raised concerns about the cost of the government reshuffle saying it would cost taxpayers millions of pounds. Ed Miliband, shadow climate and net zero secretary, said: “rearranging of deckchairs on the sinking Titanic of failed Conservative energy policy will not rescue the country”.

Chancellor Jeremy Hunt rules out extra energy bill support

Chancellor Jeremy Hunt has said it is unlikely that households will get extra support with energy bills from April. Currently, a typical household bill is capped at £2,500 a year under the government’s Energy Price Guarantee. However, this figure is set to increase to £3,000 a year from April after the level of support was decreased.

Energy Consultancy Cornwall Insight has predicted that Ofgem’s energy price cap will have fallen from the current level of £4,279 to £3,208 in April and then further decrease to around £2,200 in July. This level of reduction would mean that from July household energy bills would again be determined by Ofgem’s price cap with the government’s Energy Price Guarantee becoming largely redundant.

Since the start of the year wind generation has averaged over 10GW which has reduced the need for gas-fired power generation. Above seasonal average temperatures and high gas storage levels across Europe as well as the return of French nuclear power have also helped to subdue wholesale gas prices.

The predicted fall in prices from July would help to lower the cost of the scheme to UK taxpayers. The estimated cost of the scheme is now expected to be less than £37bn which is significantly lower than initial estimate of between £72bn and £140bn. This has led to calls for the government to maintain the level of the Energy Price Guarantee until July.

Martin Lewis, founder of Money Saving Expert, has written to the chancellor, warning him an increase in the price cap would mean another 1.7 million people will enter fuel poverty, taking the total to 8.4 million. Mr Lewis said that allowing the bill increase would be a “national act of harm”.

Mr Hunt said: “We always look at what else we can do. But we also have to be responsible with public finances, because if we’re not, we’ll just see interest rates go up, and people will face a different kind of cost, and that’s why we have to get that balance right.”

Want to talk about how this weeks news affects you?

Get in Touch Today

If you wanted to talk about any of the news items we have shared this week and how it could affect you and your organisation, then get in touch with our teams today.

  • From time to time, we would like to contact you about our products and services, as well as other content that may be of interest to you. If you consent to us contacting you for this purpose, please tick below to say how you would like us to contact you:

  • You can unsubscribe from these communications at any time. For more information on how we use your data, please review our Privacy Policy.

    By clicking submit below, you consent to allow EIC to store and process the personal information submitted above to provide you the content requested.

Our offices will be closed for the Bank Holiday (Monday 29 August 2022).
If you have a query, please contact us from Tuesday 30 August onwards, and we
will be happy to deal with your query then.