How do the King’s Speech Bills Answer the New Energy Reality?

There is clearly a pressing need to transform our energy system. The shocks from events in the Middle East and previously the Ukrainian war has exposed deep vulnerabilities in our energy system, with rapidly increased costs denting our economic well being.  

The King’s Speech outlines proposals for the Government to enact three separate energy Bills to tackle these vulnerabilities and reduce costs.

The Electricity Generator Levy Bill

In our recent article (Energy Security in an Era of Global Insecurity) we outlined many of the reasons why our electricity prices remain stubbornly high and when they are likely to start falling. We explained that for older low carbon generators who benefit from the Renewables Obligation (RO) scheme, the extraordinarily high clearing price set by the marginal gas price has resulted in significant windfall revenues.

However, for most generators, under the current Contracts for Difference (CfD) scheme, there is a repayment back to NESO of the difference between the cleared price and the strike price under the CfD. The original Electricity Generator Levy (EGL), often labelled as a windfall tax, sought to recover a proportion of the exceptional revenue. The proposed Bill is now proposing to

• Increase the EGL from 45% to 55% and to extend the measure beyond 2028 its scheduled conclusion date; and
• Offer new long-term contracts like CfDs to those generators.

These measures will go some way towards breaking the link between electricity and gas prices.

Nuclear Regulation Bill

The Nuclear Regulatory Review 2025, led by John Fingleton, found an “overly complex” and “bureaucratic” nuclear regulatory system that favoured process over safe outcomes, holding back the industry and making the UK the most expensive place in the world to build new nuclear projects.

The Government accepted all 47 recommendations of the Nuclear Regulatory Review in principle and committed to implementation by the end of 2027. Certain measures have already begun with the recent appointment of the Environment Agency for Sizewell C as Lead Environmental Regulator and publication of revised Habitats Regulation Assessment guidance in draft.

Further measures are proposed in the Bill including:

• establishing a Commission for Nuclear Regulation for nuclear projects to provide a single forum to streamline regulatory decision-making;
• moving to smarter, proportionate regulation, focused on material risk rather than exhaustive process;
• increasing use of international standards and regulatory recognition to reduce bespoke UK requirements; and
• enabling standardisation and replication, particularly for small modular reactors (SMRs), to reduce unit costs and strengthening accountability for delivery outcomes alongside safety assurance.

For the nuclear industry, particularly new generation SMRs, these improvements to the UK’s regulatory system for the safe, but timely expansion of clean energy, will provide the ingredients required to attract global investment.

Energy Independence Bill

This Bill is viewed as pivotal legislation to reduce our energy dependance and address energy costs. In essence the Bill contains provisions across consumer rights, energy prices and efficiency, industry worker rights and fossil fuel transition, in addition to the measures to improve energy security and independence.

Focusing in on the energy security measures, the Government is due to publish a wide ranging Energy Resilience Strategy, which we understand was pulled from publication alongside the King’s Speech.  It is thought that many of the measures in both the proposed Energy Independence Bill and the Nuclear Regulation Bill will provide the necessary legislation to bolster the Energy Residence Strategy once it is published.

Clearly a vital part of our energy resilience is to bolster the roll out of home growth affordable clean energy generation and transmission. The Bill therefore proposes:

• To reform the market, planning and regulatory frameworks to accelerate the deployment of clean power including offshore wind, hydrogen and smart grid technologies.
• Speed up the build-out of vital grid infrastructure with a package of measures to reduce unnecessary delays, including reforms to land access rules and networks consenting.
• Introduce powers needed to take a more strategic approach to planning and building energy infrastructure and operate the electricity system more efficiently.

It will remain to be seen how these measures will support the work that the National Energy Systems Operator (NESO) is doing on Reformed National Pricing following the Government’s decision in 2025 to retain a single national wholesale price. NESO’s activities are organised around three main challenges

• Stronger locational investment signals to drive efficient siting of new assets, working alongside the Strategic Spatial Energy Plan (SSEP).
• Reforms to balancing and dispatch arrangements — NESO is exploring reforms to improve self-balancing ahead of gate closure, increase visibility of market positions, and expand flexible capacity available for redispatch in the Balancing Mechanism.
• Improvements to constraint management to reduce the volume and cost of resolving network constraints.

The Bill will also need to be considered in the light of the reform of connection charges and Transmission Network Use of System (TNUoS) charges which Ofgem is conducting including its study on "Locational Charges and Regulatory Siting Levers under Reformed National Pricing," which explores options for how locational charges (including connection charges and TNUoS) could be redesigned.

In addition to addressing clean energy efficiency and delivery, other measures that the Bill will tackle include:

• The removal of charges on electricity that consumers export to the grid and measures to allow the supply of discounted energy at times of excess generation.
• Extending employment rights and protections for offshore workers in renewables, to bring them in line with workers in oil and gas.
• Establishing the Warm Homes Agency, which will deliver the £15 billion Warm Homes Plan to drive domestic electrification.
• Granting new powers to Ofgem, including regulating energy brokers and third-party intermediaries to stop unfair practices; and
•  Measures in the Bill to restrict the further exploration and production of oil and gas facilities.  

For these later measures the Bill proposes to manage existing oil and gas fields for their lifetime through legislation to

• introduce Transitional Energy Certificates, commit not to issue new licences to explore new fields and ban fracking; and
• ensure the North Sea Transition Authority is equipped to support a fair, managed and prosperous transition, including a new statutory objective to consider workers, communities and supply chains in its decisions.

Importantly, the Bill does not restrict existing licences such as the Jackdaw and Rosebank licence extensions applications. Determination of these licence applications are delayed partly due to the Finch v Surrey County Council Supreme Court case which established that "downstream” emissions, that is the carbon released when end-consumers burn the extracted oil and gas, must be considered in Environmental Impact Assessments for fossil fuel projects. This has required further additional environmental assessment and consultation processes.  

However, even if new licences were part of the Government’s energy security strategy, this is unlikely to deliver timely home grown energy some protagonists are calling for. As explained by Ewan Gibbs energy historian at the University of Glasgow ( Both left and right are deluding themselves about the scale of the energy crisis Britain faces | Ewan Gibbs | The Guardian) the case is more complex:

“North Sea petroleum production is overwhelmingly exported, partly because Britain’s refineries are not adapted to manufacturing fuels from the “maturing basins” under the North Sea. (The oil there has evolved from a “light” and “sweet” crude towards “heavy” and “sour” varieties, as the most valuable and easiest to refine petroleum was extracted first.). Furthermore, Britain’s refining sector – which turns crude oil into sellable products such as petrol – is in retreat. There were 18 major plants in the early 1970s, but this had dwindled to six in 2025, with two more closing last year alone: Grangemouth in Scotland and Lindsey in the East Midlands…”

Hence even if the now much depleted North Sea basin were to be exploited, the prospects of an easy fix to more home-grown energy in the near future looks bleak.

Conclusion

The trio of energy legislation announced in the King’s Speech is a serious attempt by Government to strengthen energy security and cut energy bills. They contain important proposed interventions across regulatory and planning controls and in the market to improve the delivery of clean power for the nation.

More will be known in the months ahead as the details of the legislation become apparent, but from the information so far available, there is a real prospect for improvements to both the affordability and delivery of low carbon energy.