Minister dismisses Ofgem net zero goal as unnecessary

An energy minister has dismissed as unnecessary a House of Lords bid to give Ofgem a new net zero objective, which was also a key ask of the government-commissioned Skidmore review.

The passage of the Energy Bill, which was originally introduced by Boris Johnson’s government, recommenced last week in the House of Lords.

During a Committee stage debate, part of the process of detailed scrutiny that legislation undergoes in Parliament’s upper house, Lord Teverson proposed an amendment that would enshrine achieving net zero in Ofgem’s list of objectives.

A string of peers backed the Liberal Democrat peer’s amendment to update the energy regulator’s objectives with a “specific” responsibility for net zero.

The objective was also backed in ex-energy minister Chris Skidmore’s recently published review of net zero delivery.

“Let us bite the bullet and finally put a net zero objective into Ofgem,” Lord Teverson said.

Backing the amendment, Labour Lords environment spokesperson Baroness Hayman said: “It is essential that Ofgem is given, by government and Parliament, a very clear remit and role as to the importance of net zero and that it recognises the cost to consumers of delayed action. Regulators, given explicit responsibilities by government and Parliament, have a key role to play in demonstrating cross-government commitment to reducing carbon emissions.”

However, energy minister Lord Callanan told fellow peers that the amendment was not necessary because the existing and future consumers’ interests in reduced greenhouse emissions were already protected following a 2010 change to Ofgem’s principal objective.

He added that Ofgem agrees that its principal objective includes an obligation to support delivery of net-zero targets and it would be “keen to avoid any confusion over the need to balance decarbonisation, affordability and security of supply”.

The peer said that the government will be responding to the Skidmore review in the spring as well as publishing its long awaited strategy and policy statement for Ofgem, which was originally mooted in 2020.

Lord Teverson withdrew his amendment without pressing for a vote but said he would continue to work with other peers to introduce the new Ofgem net zero duty in later stages of the bill’s passage.