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Energy Act 2016

Contents

Overview of the Act

  1. The Energy Act 2016 contains provisions which complete the work started in the last Parliament to implement the recommendations in Sir Ian Wood’s review (opens in new window) into UK offshore oil and gas recovery and its regulation. Central to this was the establishment of a new arm's length regulatory body charged with effective stewardship and regulation of petroleum recovery. The Act formally establishes the Oil and Gas Authority (OGA) as an independent regulator (taking the form of a Government company), transfers regulatory powers and functions to it, as well as providing it with new powers. This ensures the OGA has the powers it needs to be a robust, independent and effective regulator, and enable it to deliver on a strategy to give effect to the principal objective, defined in section 9A of the Petroleum Act 1998.
  2. The Act also enables more comprehensive charging of the offshore oil and gas industry for permits and licences for environmental and decommissioning activity. This allows Government to continue to recover the costs of its environmental and decommissioning activity in line with the ‘polluter pays’ principle of environmental law and addressed a gap in legislation.
  3. The Act makes changes so that local authorities decide whether to approve planning applications for new onshore wind farms, and brings forward the closure of the Renewables Obligation (RO) to new onshore wind in Great Britain. It also allows for provision to be made for restricting the use of renewables obligation certificates relating to new onshore wind in Northern Ireland.
  4. In summary the Act will:
    • Formally establish the OGA as an independent regulator, which will take the form of a Government company, charged with (amongst other matters) the asset stewardship and regulation of domestic oil and gas recovery.
    • Transfer the Secretary of State for Energy and Climate Change’s existing regulatory powers in respect of offshore oil and gas licensing to the OGA. It will transfer the Secretary of State's existing regulatory powers in respect of onshore oil and gas licensing in England to the OGA. In relation to onshore oil and gas licensing in Scotland and Wales, it will respect the changing devolution position. The Secretary of State’s environmental regulatory functions in relation to oil and gas will not be transferred.
    • Give the OGA additional powers including: access to company meetings; data acquisition, retention and transfer; dispute resolution; and sanctions.
    • Introduce provisions in relation to charges for the offshore oil and gas environmental regulator's services to the industry.
    • Make legislative changes to remove the need for the Secretary of State’s consent for large onshore wind farms (over 50 Mega Watt (MW)) under the Electricity Act 1989, acting in tandem with other measures to, in effect, transfer the consenting of onshore wind farms into the planning regime in the Town and Country Planning Act 1990.
    • Close the RO early to new onshore wind projects in Great Britain and enable the Secretary of State to make provision to restrict the use of renewables obligation certificates relating to new onshore wind in Northern Ireland.

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