The Chancellor, Jeremy Hunt, has today delivered his 2023 budget with some big changes to stimulate growth in the economy and some key impacts in the energy sector.
The headline announcement of the energy policies within the Budget is the extension of the Energy Price Guarantee. The EPG places a limit on the price households pay per unit of gas and electricity. In the face of retail energy costs that are expected to remain historically high through the spring, the government is maintaining the EPG at its current £2,500 per year level for an additional 3 months (April to June 2023). The planned increase to a level of £3,000 per year will therefore be implemented on 1 July, rather than 1 April as previously announced.
The government is also lowering the costs of energy for those on pre-payment meters to bring them in line with the typical costs of a direct debit energy bill.
In addition to the measures in the Budget, the government confirmed it will set out further action later this month to ensure energy security in the UK and meet our net zero commitments. The government is also boosting longer-term public and private investment to ensure the country’s energy system is secure and clean, and to help meet the government’s 2050 net zero commitment.
To further leverage private investment into the UK’s secure and clean energy future, the government is launching Great British Nuclear (GBN) to address constraints in the nuclear market and support new nuclear builds as the government works towards net zero. GBN will launch the first staged competition for Small Modular Reactors, which is expected to attract the best designs from both domestic and international vendors. The government’s ambition is to select the leading technologies by the end of this year and if demonstrated to be viable, co-fund this exciting new technology in the UK.
To support energy efficiency, the government will extend the Climate Change Agreement scheme for a further 2 years.
The government will also provide up to £20 billion funding for early deployment of Carbon Capture, Usage and Storage (CCUS), to help meet the government’s climate commitments.