New Energy Legislation

New Energy Legislation Aims to Protect Britain From Future Price Shocks

The Government has announced plans for new energy legislation intended to reduce Britain's exposure to volatile international gas prices, strengthen consumer protection and accelerate investment in renewable electricity and the national grid.

The proposed Energy Independence Bill was announced in the King's Speech on 13 May 2026. It is expected to give the Government and energy regulator greater powers to reform the energy market, speed up clean-energy projects and improve protection for households and businesses.

The Bill has not yet completed the parliamentary process, and its detailed provisions may change before becoming law.

Why Is New Energy Legislation Being Introduced?

Britain produces a growing proportion of its electricity from wind, solar and nuclear power, but household and business energy costs remain heavily influenced by international gas prices.

Gas is used both for heating and electricity generation. Because gas-fired power stations frequently help determine the wholesale price of electricity, increases in international gas prices can affect electricity bills even when much of the electricity being supplied comes from renewable or nuclear sources.

Recent instability in international energy markets has again highlighted the financial risks associated with relying on imported fossil fuels.

The Government says that increasing the supply of electricity generated within Britain should:

• improve energy security;


• reduce exposure to international gas prices;


• support more predictable energy costs;


• create jobs and investment;


• accelerate the transition to lower-carbon energy; and


• make the electricity system more resilient.

Breaking the Link Between Gas and Electricity Prices

One of the wider aims of energy-market reform is to reduce the extent to which the cost of gas drives electricity prices.

Renewable generators may receive support through long-term arrangements that provide an agreed price for the electricity they generate. These arrangements can provide investors with greater certainty while helping consumers benefit from technologies with relatively low operating costs.

However, reforming the electricity market is complicated. The system must continue to supply power when wind and solar generation is low and must attract investment in:

• electricity storage;


• flexible generation;


• demand management;


• network infrastructure;


• interconnectors; and


• backup capacity.

The challenge will be to change the way electricity is priced without reducing investment or threatening the reliability of supply.

More Renewable Energy and Grid Infrastructure

Increasing renewable generation will require more than constructing wind farms and solar projects.

Britain's electricity networks must also be expanded and modernised so that new generation can connect to the system and electricity can be transported to the areas where it is needed.

The Energy Independence Bill is expected to support measures designed to:

• accelerate connections to the electricity network;


• prioritise strategically important energy projects;


• reduce delays affecting viable renewable developments;


• support electricity storage and flexible demand;


• improve long-term network planning; and


• strengthen the resilience of energy infrastructure.

Some proposed renewable projects currently face lengthy waits for a grid connection, including projects that may otherwise be ready to proceed.

Connection reforms are intended to replace the existing queue with a system that gives greater priority to projects that are needed, properly developed and capable of being delivered.

Stronger Consumer Protection

The legislation is also expected to strengthen the role of Ofgem, the regulator responsible forBritain'ss gas and electricity markets.

A Government review concluded that Ofgem's existing structure and powers were no longer sufficient for an increasingly complicated energy system.

Proposed reforms include:

• stronger protection for domestic and business customers;


• faster redress when suppliers act improperly;


• clearer responsibility for addressing poor customer service;


• greater accountability for senior energy company executives;


• stronger regulation of energy intermediaries; and


• a clearer strategic role for Ofgem in supporting energy security, economic growth and net zero.

The changes are particularly relevant following complaints about inaccurate billing, mishandled customer credit balances, forced prepayment meter installations and poor treatment of vulnerable customers.

Fixed Deals, Default Tariffs and the Energy Price Cap

Energy suppliers frequently offer fixed-term tariffs that provide set unit rates for an agreed period. When that period ends, customers who do not choose another deal may be moved onto a standard variable or other default tariff.

This can particularly affect customers who:

• do not use the internet;


• find energy tariffs difficult to compare;


• are uncomfortable changing suppliers;


• have limited access to independent advice;


• are elderly or vulnerable; or


• do not notice that a fixed deal is approaching its end.

Standard variable tariffs were historically often among the more expensive arrangements available. Although that is not necessarily true in every market, customers should not assume that their supplier's default tariff represents the best available price.

The Energy Price Cap

The proposed price cap referred to in earlier reports was introduced through the Domestic Gas and Electricity (Tariff Cap) Act 2018 and took effect in January 2019.

Ofgem now limits the rates that suppliers can charge domestic customers on standard variable and default tariffs for:

• each unit of gas and electricity; and


• the daily standing charge.

The cap applies in England, Scotland and Wales and is normally reviewed every three months.

It does not impose a maximum total bill. The amount a household pays still depends on how much energy it uses.

What the Price Cap Does Not Cover

The price cap does not generally protect customers who:

• have chosen a fixed tariff;


• have a business energy contract;


• receive heat through a communal heat network; or


• use heating oil rather than mains gas.

A fixed tariff may be above or below the current cap. Customers should compare the actual unit rates, standing charges, the length of the agreement, and any exit fees rather than relying solely on an estimated annual figure.

Is a Fixed Tariff Always Cheaper?

No. Fixed tariffs provide greater price certainty, but they do not guarantee the lowest price.

A fixed deal may be attractive where:

• its rates are below the expected price cap;


• the customer values certainty;


• the exit fee is reasonable; and


• the customer expects to remain at the property.

A standard variable tariff may be preferable where:

• market prices are expected to fall;


• the customer wants flexibility to switch;


• the available fixed deals are expensive; or


• the customer may move home soon.

The most suitable choice depends on individual circumstances and future market movements, which cannot be predicted with certainty.

Support for Vulnerable Customers

Suppliers must take account of customers in vulnerable circumstances and should provide accessible information and appropriate support.

Customers may ask to join their supplier's Priority Services Register where they:

• are of pensionable age;


• have a disability or long-term medical condition;


• have impaired sight or hearing;


• have difficulty communicating;


• depend on medical equipment;


• are pregnant or have young children; or


• are experiencing temporary vulnerability.

Support may include accessible bills, nominated contacts, meter-reading assistance and additional protection during interruptions to supply.

What Customers Should Do When a Fixed Deal Ends

Before the end of a fixed tariff, customers should:

• check the date the agreement ends;


• read the supplier’s renewal notice;


• compare unit rates and standing charges;


• check the current Ofgem price cap;


• consider any exit fees;


• review their actual annual energy use;


• ask whether the supplier offers a cheaper existing-customer tariff; and


• seek independent advice where the options are unclear.

The price cap provides an important safety net, but it does not remove the need for a fair and understandable energy market. Customers who are unable or unwilling to switch should not be exposed to excessive charges simply because they remain with their existing supplier.

Protection for Small Businesses

Small businesses do not benefit from the domestic energy price cap and may be particularly exposed to complex contracts and volatile prices.

Many businesses obtain energy contracts through brokers or other third-party intermediaries. Concerns have been raised about:

• undisclosed commissions;


• poorly explained contract terms;


• pressure selling;


• unexpected renewal arrangements;


• difficulty obtaining redress; and


• uncertainty about who regulates the intermediary.

The Energy Independence Bill is expected to support stronger regulation of third-party intermediaries serving non-domestic customers.

This could require brokers to meet conduct standards, disclose important information and submit to formal complaints and enforcement procedures.

Will the New Law Reduce Energy Bills?

The Government argues that greater use of home-generated renewable electricity should protect consumers from future fossil-fuel price shocks.

However, the legislation is unlikely to produce an immediate or guaranteed reduction in every household's bill.

Energy bills are affected by:

• wholesale gas and electricity prices;


• network costs;


• supplier operating costs;


• environmental and social policy costs;


• the weather;


• international events;


• household energy consumption; and


• the type of tariff and payment method.

New generating capacity, storage and network infrastructure also require substantial investment, and some of these costs may ultimately be recovered through taxation or energy bills.

The longer-term argument is that a more diverse energy system, with less dependence on imported gas, should be more stable and less vulnerable to international price spikes.

The Current Energy Price Cap

For the period from 1 July to 30 September 2026, Ofgem set the price cap at an annualised figure of £1,862 for a typical dual-fuel household paying by Direct Debit.

This represented a 13% increase compared with the previous cap period.

The figure is not a maximum bill. A household using more energy than the typical amount will pay more, while a household using less will pay less.

The increase illustrates how quickly changes in wholesale energy markets can affect customers, even where the Government is pursuing longer-term reforms intended to improve energy security.

Heat Network Customers

Customers who receive heating and hot water through a communal or district heat network have historically had fewer protections than customers supplied directly with gas or electricity.

New consumer protection rules for heat networks began operating in Great Britain in January 2026, with Ofgem taking on responsibility for regulating the sector.

The developing framework is intended to improve:

• billing transparency;


• customer service;


• complaints handling;


• support for vulnerable consumers;


• standards of conduct; and


• access to independent redress.

Heat network customers, although separate pricing and consumer protection rules may apply.

Great British Energy

The proposed legislation builds on the Great British Energy Act 2025, which established a publicly owned national energy company.

Great British Energy is intended to develop, own and invest in clean-energy projects, working alongside private businesses, local authorities and community organisations.

Its stated priorities include:

• investing in renewable generation;


• supporting local and community energy;


• developing domestic supply chains;


• creating skilled employment;


• helping accelerate clean-power projects; and


• retaining a greater public stake in energy infrastructure.

Planning and Local Communities

New energy infrastructure can generate disagreement, particularly where projects affect landscapes, farmland, nearby homes or local roads.

Proposals may involve:

• onshore and offshore wind farms;


• solar farms;


• electricity pylons and substations;


• battery storage;


• hydrogen infrastructure;


• carbon capture facilities; and


• new nuclear developments.

Speeding up energy projects does not necessarily mean removing all planning controls.

Developers may still need to address:

• environmental effects;


• protected landscapes and wildlife;


• noise and visual impact;


• land rights;


• compulsory purchase;


• community consultation;


• construction disruption; and


• appropriate compensation.

The challenge for the Government will be to shorten unnecessary delays while preserving meaningful scrutiny and public participation.

What Happens Next?

The Energy Independence Bill must be introduced to Parliament and pass through the House of Commons and House of Lords before it can become law.

The process will involve:

• publication of the Bill;


• parliamentary debates;


• detailed committee scrutiny;


• possible amendments;


• approval by both Houses; and


• Royal Assent.

Many provisions may also require further regulations, consultations or implementation dates after the legislation is passed.

Will the Reforms Work?

The principles behind greater energy independence are difficult to dispute. Britain's dependence on international gas markets has repeatedly exposed households and businesses to sudden price increases.

Building more domestic renewable generation, storage and network capacity may reduce that exposure, but the success of the reforms will depend on delivery.

The Government will need to show that it can:

• complete projects more quickly;


• control infrastructure costs;


• protect vulnerable consumers;


• provide effective regulation;


• retain public confidence;


• deal fairly with affected communities; and


• ensure that savings reach customers.

The legislation may provide the legal framework, but energy security will ultimately depend on whether new generation and network infrastructure are actually built.

Legal Advice About Energy Matters

Energy legislation can affect households, landlords, landowners, developers and businesses.

A solicitor may advise on:

• energy supply disputes;


• incorrect billing;


• business energy contracts;


• broker commissions;


• renewable energy developments;


• leases and options over land;


• wayleaves and easements;


• planning applications;


• compulsory purchase;


• environmental regulation;


• grid connections; and


• consumer protection.

Use the search facility at the top of this page to find a solicitor experienced in energy, environmental, commercial property or consumer law.

Disclaimer

Solicitors.com is not a firm of solicitors. This article provides general information and does not constitute legal, financial or energy advice. The Energy Independence Bill is proposed legislation and its provisions may change during the parliamentary process.