B2.10.2.2 Energy Act 2008


This was given Royal Assent on 26 November 2008. It implements the legislative aspects of the Energy white paper 2007: ‘Meeting the energy challenge’.

The Energy Act updates energy legislation to:

  • reflect the availability of new technologies (such as carbon capture and storage and emerging renewable technologies)
  • correspond with the UK’s changing requirements for secure energy supply (such as offshore gas storage)
  • protect our environment and the tax payer as our energy market changes


The Act covers:

  • Offshore gas supply infrastructure: strengthening regulation to allow for private sector investment to help maintain the UK’s reliable energy supplies. This is crucial, as we expect to have to rely on imported gas to meet up to 80% of our energy demands by 2020.
  • Carbon Capture and Storage (CCS): creating regulation that enables private sector investment in CCS projects. CCS has the potential to reduce the carbon emissions from fossil fuel power stations by up to 90%.
  • Renewables: strengthening the Renewables Obligation to increase the diversity of our electricity mix, improve the reliability of our energy supplies and help lower carbon emissions from the electricity sector.
  • Feed-in tariffs: enabling the Government to offer financial support for low-carbon electricity generation in projects up to 5 megawatts (MW). The aim is for generators to receive a guaranteed payment for generating low-carbon electricity.
  • Decommissioning offshore renewables and oil and gas installations: strengthening our statutory decommissioning requirements to minimise the risk of liabilities falling to the Government.
  • Improving offshore oil and gas licensing: improving licensing to respond to changes in the commercial environment and enable DECC to carry out its regulatory functions more effectively.
  • Nuclear waste and decommissioning costs: ensuring new nuclear power station operators build up funds to meet the full costs of decommissioning and their share of waste management costs.
  • Offshore transmission: amending powers so that Ofgem is able to run offshore transmission licensing more effectively.
  • Smart metering: allowing the Secretary of State to modify electricity and gas distribution and supply licences, so the licence holder has to install, or help install, smart meters to different customer segments, including private households.
  • Renewable Heat Incentive: allowing the Secretary of State to establish a financial support programme for renewable heat generated anywhere, from large industrial sites to individual households.
  • Housekeeping: various other points covering nuclear security and the transfer of some regulatory functions to DECC.