Live in the UK? Your gas standing charge is on its way out, and so are new North Sea fields
The Energy Independence Bill, introduced to Parliament on 4 November, ends licences to explore new oil and gas fields and paves the way to scrap the daily gas standing charge, which the government says will save around 60% of gas customers an average of £45 a year.
The UK government put a bill before Parliament on Wednesday that reaches into household bills and the future of North Sea oil at the same time. The Energy Independence Bill ends licences to explore new, untapped oil and gas fields and sets up the scrapping of the daily gas standing charge.
Energy Secretary Miatta Fahnbulleh called it a first down payment on fixing a system that leaves households exposed to price shocks thousands of miles away. If you live in the UK, though, it is the bill-side changes you will notice first.
Goodbye to the gas standing charge
The standing charge is what you pay for every day on a gas contract, whether or not you burn anything. Ministers will add amendments to the bill to remove it from household gas bills. Around 23 million homes are covered, and the government’s own figures say about 60% of gas customers will save an average of £45 a year. Low users, and people who only heat with gas in winter, gain most.
The bill also makes permanent a saving that already exists. Shifting 75% of the Renewables Obligation (green subsidies that used to sit inside your bill) onto general taxation has taken about £90 a year off the average bill, but the power to do it had to be renewed every six months.
Landlords and suppliers in the crosshairs
Renters get something too. Councils will be able to fine landlords up to £30,000 for missing energy-efficiency standards, and the government reckons an upgraded rented home saves around £210 a year by 2030. Ofgem gets tougher powers over energy firms and their bosses, unfair bonuses included, and brokers selling business energy contracts will be regulated for the first time.
And the North Sea?
This is where the bill splits opinion. There will be no more licences to explore new fields, although production carries on in areas already licensed. New transitional certificates allow more extraction from explored areas, which the government says could unlock around 60 million barrels. A £2 billion fund is meant to help workers through the transition. The decision on Rosebank, the big undeveloped field north-west of Shetland, sits outside the bill and runs separately.
The Conservatives have said they will oppose it, calling it a disaster for oil and gas workers. It still has to clear both Houses. Closer to home, the oil-and-transition argument has a different cast, and Galp’s latest quarter shows how much the old business still earns.
By Beatriz Mota
Image: © House of Commons / Roger Harris / Wikimedia Commons (CC BY 3.0)
