UK Energy Bill Would End Gas Standing Charges for 23 Million Households

SeaPRwire – The Energy Independence Bill reached Parliament on Wednesday with a measure attached that would end standing charges on household gas bills, the daily fee that customers pay whether or not they use any gas. About 23 million households are covered, and the department expects roughly 60% of gas account holders to save an average of £45 a year.

The charge is not being abolished by the bill itself. The government said it will bring forward amendments during passage, which means the detail will be written into the legislation later rather than in the text tabled this week.

A standing charge is a fixed daily amount, so it falls hardest on the households that use the least gas. That is the argument for removing it, and it is also why the £45 estimate is an average across 23 million households rather than a figure anyone can check against their own bill this winter.

Two other bill-level commitments sit alongside it. The first puts the shift of 75% of domestic Renewables Obligation costs from customer bills to public spending on an enduring footing through March 2029. That transfer has already taken about £90 a year off the average household bill, but the powers behind it currently expire every six months, so each renewal has been a fresh decision.

The second is a £100 payment this winter for up to 20 million households in England, announced in last week’s Budget and carried into the bill’s supporting programme.

The savings reach households through three different mechanisms on three different timetables: a one-off payment this winter, a standing charge removed once the amendments land, and a levy transfer that has already happened and now needs its legal basis extended. The department did not publish a combined annual figure for a typical household, and adding the three together would double count the year just past.

Most of the substance is in the enforcement machinery. Ofgem would gain broader duties, a wider remit and stronger enforcement powers, with the stated aim of acting faster on wrongdoing and securing better redress when households and businesses are harmed. Energy brokers and price comparison services would come under Ofgem regulation for the first time, with powers to order compensation, impose fines and ban operators. The department estimates the broker measure alone saves businesses more than £100 million a year in mis-selling and hidden commissions.

Rented housing gets a separate enforcement route. Local authorities would be given stronger powers to check energy efficiency standards in the private rented sector, domestic and non-domestic, backed by a maximum civil penalty of £30,000 for breaches of the domestic rules. The measure is tied to the move to EPC C from 1 October 2030, which the department expects to cut average bills in upgraded properties by £210 a year.

Three smaller provisions change what the grid and the market can do. Charges on electricity that consumers store and return to the grid would be removable, which matters for batteries and for vehicle-to-grid charging. Government oversight of smart meters would run to 2033 instead of expiring before the rollout and communications upgrade finish. And ministers would gain the option to require batteries to have smart capabilities, a power that existing smart-appliance rules do not cover.

Community consent is being priced. Operators of new onshore wind and ground-mount solar above 5 MW would face legally binding benefit agreements with local groups, with minimum contributions and published terms. The bill also raises the prospect of a stake of up to 20% for communities in new renewable projects, and provides for a publicly owned Great British Grid through an amendment still to come. A separate provision amends existing primary powers so that local people can take a stake in projects near them, a route the notes describe as uneven at present.

Two provisions on the machinery of delivery sit further back in the notes. The Warm Homes Agency would be established in law, a single body for advice and support in place of the current mix of schemes and organisations, with existing schemes able to transfer into it. Separately, the rules on sharing data between government and suppliers would widen, so that support can reach bill payers who are struggling but fall outside the legal definition of fuel poverty, with the existing privacy safeguards kept.

Market reform is the least visible part and the one with the longest tail. Reformed National Pricing would give ministers targeted powers to update market rules, network charging and trading arrangements, on the argument that the current rules were designed before renewable generation reached its present share. Consent and land-access processes for grid works would be modernised, which is the mechanism the bill relies on to shorten the build time for connections.

The North Sea section is the most contested ground and the most carefully drafted. New licences to explore for oil and gas would end, while production from already licensed areas continues. Transitional Energy Certificates would allow further output in explored areas using existing infrastructure, which the department says could unlock about 60 million barrels and support hundreds of jobs. Onshore, new licences for oil and gas in England would end, including those that could be used for shale gas.

Employment terms for offshore renewable workers beyond UK territorial waters would be brought closer to those of offshore oil and gas crews, covering minimum wage, unfair dismissal protection and working time. The department frames the change as closing a gap in coverage, since the workers in question fall outside the reach of protections that already apply to the oil and gas crews working alongside them.

What the bill does not contain is an estimate of the total saving to households, a figure for the cost of the new regulator’s remit, or a date for when standing charges actually disappear. Those numbers will arrive with the amendments, the secondary legislation and the spending review that follows.

Two structural questions are left open. One is whether a publicly owned grid operator changes the investment decisions that currently sit with private network companies, or only the ownership of the assets. The other is whether binding community benefit agreements speed up consenting or add a stage to it, since the same developers are also the ones the bill wants to build faster.