27/02/2023

PM creates new “Department for Energy Security and Net Zero”

On 7 February 2023, the Prime Minister, Rishi Sunak, split the Department for Business, Energy and Industrial Strategy (“BEIS”) into four separate government departments:  

  1. The Department for Science, Innovation and Technology – former Culture Secretary Michelle Donelan becomes the new Science Secretary;
  2. The Department for Business and Trade – will be led by Kemi Badenoch who becomes Business and Trade Secretary;
  3. The Department for Culture, Media and Sport – which is losing the responsibility for the Digital Sector, will be headed up by Lucy Frazer; and
  4. A new Department for Energy Security and Net Zero – will be headed up by former Business Secretary Grant Shapps.

Of particular interest is the new Department for Energy Security and Net ZeroThe UK Government has stated this Department will provide: 

“…dedicated leadership focused on delivering security of energy supply, ensuring properly functioning markets, greater energy efficiency and seizing the opportunities of net zero to lead the world in new green industries.

This year, the department will focus on easing the cost of living and delivering financial security by bringing down energy bills and keeping them down – better insulating consumers from external impacts. Longer term objectives include ensuring properly functioning energy markets, coordinating net zero objectives across government and bringing external delivery expertise to bear on its portfolio of major projects”.

There has been limited information at this stage on what exactly the department will do to achieve these targets.  However, the UK Government signaling its commitment to achieving net zero, through the creation of this new department, has come at an integral time for the landscape of the UK’s energy and climate change policy.    

On 18 July 2022 the UK High Court handed down its judgment in the case of “Friends of the Earth Ltd & Ors, R (On the Application Of) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWHC 1841 (AdmCin) (18 July 2022), paragraph 14)”. The High Court held that the then Secretary of State for BEIS, Kwasi Kwarteng, had approved the UK Government’s “Net Zero Strategy” without being provided sufficient information to be satisfied that the relevant carbon budgets could be met. Specifically, he was provided insufficient information as to:

  • the quantitative effects of individual policies, and
  • a qualitative analysis explaining which policies were expected to make up a 5% shortfall against the reductions required by the Sixth Carbon Budget and in what ways.

The Court held that, without that information, the then Secretary of State had been unable to consider, and decide for himself, the risk of the statutory targets not being delivered, in breach of his obligations under section 13 of the Climate Change Act 2008. The Court further held that the strategy did not contain sufficient information to enable Parliament and the public properly to understand how the UK Government intended to meet the statutory targets. The UK Government was given 8 months in which to “flesh out” it’s Net Zero Strategy and provide the sector specific and measurable targets which it was missing. The deadline for the Ministers to provide their updated Net Zero Strategy, due in March 2023, is fast approaching.

In addition to the upcoming deadline, Number 10 has also increasingly received warnings from leading UK businesses that the UK is dissipating its position as a leader in the global green industrial revolution. Said businesses are urging the UK Government to initiate further investment and accelerate the transition to clean energy technologies. The linking of “Energy” and “Security” in the title of the Department’s name signals the UK Government appreciates achieving net zero will not only help us in our fight against climate change but will also boost our economy. Perhaps this is an indication that UK businesses have been heard and the relevant action will be taken.

It will be interesting to see what the new department can bring for the energy and net-zero landscape.

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