A 2025 Update on The Energy Act 2023
The Energy Act 2023 (the “Energy Act”) received royal assent on 26 October 2023 and has now become part of UK law. The Energy Act seeks to significantly overhaul the UK’s energy regulatory framework by, in the words of the government, “strengthening energy security, supporting the delivery of net zero and ensuring household bills are affordable in the long-term”.
Although the Energy Act lays the foundations for a new regulatory framework, secondary legislation provides the finer details and workings of the Act, with regulations continuing to emerge in 2025 and beyond as implementation progresses.
The Energy Act 2023 is a large piece of energy legislation, with 335 sections and 22 schedules, and covers a vast range of energy-related areas. This article focuses on a few key principles introduced by the Energy Act, which GA Energy, our specialist energy team, are actively keeping a watch on.
Carbon Capture
The Energy Act 2023 is keen to support the development and implementation of new technologies, one being the currently untapped potential of Carbon Capture, Usage and Storage (CCUS). CCUS is a technology that captures carbon dioxide (CO2) emissions created, for example, during industrial processes and by power plants to prevent their release into the atmosphere. The captured CO2 can then be stored underground or used elsewhere commercially. The Energy Act establishes a regulatory framework for the storage and transportation of CO2 and grants powers to Ofgem, as the energy regulator, to protect network users and the public. The Government clearly sees CCUS playing a crucial role in the UK reaching its net zero goals, with these reforms aimed at unlocking investment in CCUS technology.
Green Hydrogen
Another technology the government is keen to support going forward, and one which we are increasingly seeing clients diversify into, is hydrogen, particularly green hydrogen. The government has committed to producing 10GW of low-carbon hydrogen by 2030, and this goal is supported by measures introduced by the Energy Act.
The main challenges with hydrogen are that it is considered a volatile gas, and the market remains unprepared for widespread adoption. Hydrogen requires substantial up-front support from the government to stimulate market development. The Energy Act 2023 attempts to address this by bringing in a number of support measures, including introducing revenue support contracts, supporting a hydrogen grid conversion trial to see if the existing gas network can be adapted to safely transport hydrogen, establishing a gas levy to support low carbon hydrogen along with the appointment of a hydrogen levy administrator, who will be responsible for raising funds for the levy, and many more. We expect green hydrogen projects to feature increasingly in our renewable energy practice.
Nuclear
The government is aiming to increase nuclear capacity to 24GW of nuclear power by 2050. The most notable change introduced by the Energy Act in relation to nuclear power is the introduction of Great British Energy – Nuclear (GBEN), previously Great British Nuclear. GBEN is a vehicle, with statutory powers designated to it under the Energy Act 2023, to facilitate the design, construction, commissioning and operation of nuclear energy projects.
Part of GBEN’s remit includes supporting Small Modular Nuclear Reactors (SMRs), which can be built off-site and installed incrementally, scaling up over time as required. In June 2025, it was announced that Rolls-Royce SMR had been selected as the preferred bidder to partner with GBEN to develop SMRs.
Although a controversial technology, it is clear that the Government sees nuclear power as an integral part of reaching its net zero targets.
Heat Networks
Another key element of the Energy Act 2023 is its support for heat networks. Heat networks transport heat (or cooling) from a central source to consumers, within the same building or between multiple buildings in the same local area. The heat or cooling is transported via a network of pipes, avoiding the need for individual boilers or electric heaters in every flat, house, office or building.
The Energy Act establishes a comprehensive framework to accelerate heat network deployment, including, from January 2026, appointing Ofgem as the regulator for heat networks in England, Wales, and Scotland. Further, the Energy Act gives Ofgem powers to monitor and regulate heat network operators and ensure heat network developers can access powers equivalent to other utility companies, including powers to excavate roadways for pipe installation.
The Energy Act 2023 also contains legislation to bring heat network zoning into force. Heat network zoning involves designating areas or “zones” where heat networks are expected to be the most cost-effective solution for decarbonising heat. Within these zones, all new buildings and some existing buildings will be required to connect to the network within specified timeframes, although there will be exemptions. It is hoped this approach will accelerate the development of heat networks and ensure that more homes and businesses connect to the system.
Competition in Onshore Electricity Networks
One of the more interesting market reforms made by the Energy Act 2023 relates to the introduction of competition in onshore electricity networks.
Currently, the transmission network, transmitting electricity over high voltage lines across England and Wales to substations to be distributed to consumers, is operated by the National Energy System Operator (National Grid previously being responsible for the transmission network). The Energy Act amends the existing Electricity Act 1989 to enable the Gas and Electricity Markets Authority to make regulations facilitating competitive tendering. Secondary legislation, such as the Electricity (Criteria for Relevant Electricity Projects) (Transmission) Regulations 2024, now specifies the criteria an onshore transmission project must meet for competitive tendering eligibility. Competitive tendering will allow new network companies to compete to build and own network transmission assets. The National Energy System Operator will be responsible for overseeing the tender process.
The government expects this new regime to unlock significant investment and innovation in the onshore electricity network, accelerating the UK’s progress towards its net zero targets.
A 2025 perspective
This article looks at just some of the key reforms introduced by the Energy Act 2023. For energy developers and investors, the Act creates numerous opportunities, from integration of CCUS technology and the development and support for new and emerging low-carbon technologies to potentially increased connection capacity through competitive tendering to upgrade the network and more opportunities for direct supply by way of innovative communal and district heat networks.
The success of these reforms will largely depend on the detailed implementation through secondary legislation, which continues to evolve. Renewable energy stakeholders should monitor these developments closely, as they will shape investment opportunities and regulatory requirements going forward. The interplay between these new frameworks and existing renewable energy regulations will be particularly important as the UK energy system becomes increasingly integrated and complex in its journey towards net zero.
GA Energy continues to advise its clients across a range of established and emerging technologies, including solar, energy storage, wind, anaerobic digestion and green hydrogen. More details of the services provided by the team, and contact details, can be found on its dedicated web page.
Article written jointly by head of GA Energy, Helen Rumford, and Hannah Bearman.
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