Draft Energy Strategy and Just Transition Plan

Annex E - UK Government powers

Energy policy crosses a large number of areas that are reserved to the UK Government. This means that we need to work with the UK Government to enable a number of the changes outlined in this Strategy. The UK Government has many additional powers not listed here.

Preparing for a just transition

Consumer protection and regulation

Consumer protection is one of the core remits of Ofgem, the national energy regulator.

Community benefits from renewables

The ability to mandate community benefits and offers of shared ownership through energy regulation is reserved to UKG.

Energy supplies

Electricity

Our energy supplies are governed by UK Government through the UK Electricity Act under the legislation of the Electricity Act 1989 vi, the Pipelines Act 1962 vii and the Gas Act 1986 viii, which govern the generation, transmission, distribution and supply of electricity. This also covers renewable electricity generation from marine, solar, hydro and wind.

Hydrogen

Hydrogen subsidy / revenue support and the regulation of piped gas supply and gas networks are reserved to the UK Government.

Bioenergy

Market support and incentives to deploy BECCS, the regulation of the gas and electricity grids, and future access to biomass imports through trade agreements are reserved to the UK Government.

Coal

Powers over coal exploitation are reserved to the UK Government, and the Coal Authority is responsible for licensing coal mining activity in Scotland.

North Sea Oil and Gas

• The UK Government is responsible for the fiscal regime and regulation of the oil and gas industry.
• The North Sea Transition Authority (previously Oil and Gas Authority) acts as the oil and gas sector's independent regulator. Its role is to regulate, influence and promote the oil and gas industry, in order to maximise the economic recovery of the UK's oil and gas resources. The NSTA regulates the licensing of exploration and development of the UK's offshore and onshore oil and gas resources, gas storage and unloading activities.
• The Petroleum Act 1998 confers all rights to the UK's petroleum resources to the Crown, but the NSTA can grant licences that confer exclusive rights to search and bore for and get petroleum, over a limited area for a limited time.

Energy demand

Heat in Buildings

There are several areas reserved to the UK Government, including market mechanisms to drive investment in and uptake of zero emission heat systems, and the decision on the role of hydrogen in the gas grid and the future of the gas network.

Transport

Examples of reserved issues include Fuel duty, Renewable Fuel Transport Obligation (RTFO), UK Emissions trading scheme - only aviation but covers other demand sectors (joint with other Devolved Administrations), Sustainable aviation fuels mandate.

Carbon Capture and Storage

Access to BEIS business revenue support and underwriting of liabilities as well as an economic licence from the proposed UK-wide new economic regulator are essential to accelerate CCUS in Scotland.

Creating the conditions for a future net zero energy system

Security of supply and resilience

• Security of electricity and gas supply is a reserved area of policy. The UK Government sets the long-term policy direction, whilst Ofgem, as energy regulator, ensures markets work properly and that there are no barriers to licensed businesses meeting their obligations.
• National Grid ESO is responsible for the operation of the electricity system, moving electricity around the country, looking at the whole GB system second by second to ensure that the right amount of electricity is where it is needed when it is needed.
• The overall responsibility to deliver secure gas supplies in GB is shared between gas shippers (including energy suppliers), and the National Grid, and the powers are reserved to the UK Government.

Energy storage and flexibility

Market support (and incentives to deploy pumped hydro storage) are reserved.

Planning and consenting

The framework under which certain consenting decisions are made is reserved to the UK Government. Planning is a devolved competency.

Electricity networks policy and regulation

• The UK Government is responsible for energy network policy and regulation.
• The role of the UK energy regulator, Office of Gas and Electricity Markets (Ofgem) is defined in UK Parliamentary legislation and includes the regulation of gas and electricity networks, and determination of the regulated network companies' allowed revenues.