The long-awaited Power Act 2023 (the “Act”) acquired Royal Assent on the 26 October 2023, greater than a 12 months after the unique invoice was first launched to Parliament.
The UK authorities describes this Act as ‘the largest piece of power laws within the UK’s historical past’, and it’s vital in each dimension and scope. It covers a variety of matters for the power sector, aiming to make sure power affordability for households and companies, improve personal funding in power infrastructure and speed up the event of power transition actions and achievement of internet zero targets in step with the North Sea Transition Deal.
Though the Act was enacted on 26 October 2023 with some provisions taking instant impact, most provisions will come into power on 26 December 2023. Different provisions can be applied via secondary laws.
In relation to offshore actions, the important thing facets of the Act are as follows:
Carbon Seize and Storage (CCS)
The Act gives for the creation of a licensing regime for CCS, and a storage and transport licensing framework. The licence is required to function a storage web site and to offer companies for transporting CO2 by pipeline. These licences can be issued and controlled by the Workplace of Gasoline and Electrical energy Markets (Ofgem) and are distinct from the carbon storage licences for which a regime is already in place.
In relation to CCS, the Act additionally addresses decommissioning and monetary safety regimes, monitoring, reporting and storage necessities, retention of data and samples and amendments to the change of use regime (in relation to re-purposing of oil and gasoline infrastructure for CCS actions).
Hydrogen
As for CCS, the Act gives for the creation of a licensing regime for hydrogen transport, hydrogen storage and hydrogen manufacturing. The Act additionally gives for the licensing of initiatives involving the development, alteration or operation of a pipeline for the aim of the conveyance of hydrogen, by advantage of the granting of a gasoline transporter licence below the Gasoline Act 1986 to authorise the transportation of hydrogen via pipes (non-pipeline strategies akin to delivery, highway and rail can be thought-about additional sooner or later) for the needs of the related challenge. In relation to offshore hydrogen pipelines, these licences can be issued by the North Sea Transition Authority (NTSA).
The Act additionally authorises the Secretary of State to nominate an administrator to manage a brand new hydrogen levy scheme payable by related market contributors for income help for hydrogen transport and storage.
Oil and Gasoline
The Act consists of amendments to the each current and future petroleum licences (and the carbon storage licences), which would require NSTA approval previous to a change of management affecting a license. This isn’t considerably totally different from present observe, as many patrons already search consolation that the NSTA doesn’t have any materials issues in respect of the proposed change of management. The date on which these provisions will come into impact just isn’t but identified.
Moreover, the Act amends the Petroleum Act 1998 to offer powers for a brand new charging regime to be launched in reference to the approval of offshore decommissioning programmes. The introduction of this regime requires additional session earlier than its implementation.
Offshore wind
The Power Act gives for the creation of marine restoration funds which can be utilized by wind farm builders in its place for environmental compensation. The Act additionally gives for a strategic compensation fund, to permit builders collaboration to take care of antagonistic results on the atmosphere. It additionally allows the making of latest laws in relation to evaluation of impacts on protected websites and compensation.
The introduction of this piece of laws has been long-awaited by the business and its enactment of laws marks an vital milestone on the trail to internet zero. Hopefully the secondary laws and steering that may present extra particulars on the implementation and operation of the brand new regimes can be forthcoming in brief order to make sure momentum is maintained.
Really useful for you