The Energy Independence Bill: Eight Things the Tech Sector Needs to Know
Reformed National Pricing
The Energy Independence Bill takes forward Reformed National Pricing (RNP), a package of electricity market reforms meant to make planning and operation of the GB electricity system more coordinated, efficient and resilient.
More renewable generation and rising demand are changing the system in ways the current market arrangements were not designed for. The government says the misalignment between generation and network build, and the lack of an overall strategic plan, has added costs for consumers and investors. It also says the existing processes for changing industry codes and licenses are slow, complex and not always aligned with RNP’s aims.
To speed things up, the Bill gives Ofgem and the Secretary of State time-limited powers, restricted to balancing and trading reforms, to amend codes and licenses or introduce new ones. These powers are subject to statutory tests, consultation, and reporting requirements. The Bill also creates new powers to regulate areas such as power exchanges and network services.
Alongside this, network charging will be reformed so charges better reflect whole-system costs, and balancing and trading arrangements will be updated so NESO can match supply and demand more efficiently in real time.
The government estimates that smarter infrastructure planning and better-aligned policy levers could deliver “up to £20 billion in benefits between 2030 and 2050”. Implementation timelines and the detail of the code and license changes have not yet been set out, so the way these new powers are used will matter for market participants and for the technology and flexibility providers that support a smarter grid.
techUK welcomes the government’s ambition to make electricity market reform more coordinated. As timelines and the detail of code and licence changes are still to be set out, we will continue to work closely with DESNZ, Ofgem and NESO to ensure the new powers support technology and flexibility providers.
We believe much stronger locational signals are needed to attract large energy users that could locate anywhere. Our members also want reforms to network charging, balancing and trading to prioritise proven flexibility solutions and smarter use of data and AI to predict supply and demand. We are also developing proposals for government for Corporate PPAs, which bring more renewables online without adding to consumer bills.
Asset visibility installer obligation
The Energy Independence Bill also brings in a new Asset Visibility Installer Obligation. Installers of distributed energy assets, such as EV charge points, heat pumps, solar PV and domestic batteries, will have to register each installation with the relevant Distribution Network Operator (DNO).
The government says fewer than 40% of these assets are currently registered, because the rules are unclear and fragmented and enforcement is weak. The result is poor data on what is connected to the low-voltage network, which makes network planning less certain and pushes up reinforcement and system operating costs.
The Bill gives the Secretary of State powers to set clear, standardised registration requirements in regulations, backed by a “proportionate” monitoring and enforcement regime. This follows DESNZ’s 2025 call for evidence and supports the government’s Energy Digitalisation Framework.
Better asset data should also help consumers access flexibility services that can cut their bills, and illustrative DESNZ analysis suggests that raising low-voltage network utilisation by just one percentage point could avoid £240m–£571m of network investment by 2050.
techUK strongly welcomes the new Asset Visibility Installer Obligation, a long-overdue measure we have been calling for. Better visibility of distributed energy assets will improve strategic network planning, cut reinforcement and system costs, and support the coordination needed to run a smarter, more flexible grid.
Smart meters: Extension of rollout
Under the Energy Act 2008, the government has powers to amend supplier licence conditions and industry codes regarding the rollout and operation of smart meters, and related powers under the Electricity Act 1989 and Gas Act 1986 to add new licensable activities relating to smart meters. The Energy Independence Bill extends these smart meter powers by five years. Without this, they would lapse on 1 November 2028; they will now run to 1 November 2033. The government says that, without primary legislation, the rollout would very likely stall after 2028.
The extension lines up with the 2030 smart metering policy framework, which aims to finish the rollout by the end of 2030 and move industry onto the 4G communications network by 2033. As well as more accurate billing and access to flexible tariffs, smart meter data helps networks manage the grid and make better investment decisions. The government estimates smart meters cut household electricity use by around 3% and deliver a net benefit of £6 billion after all costs.
techUK welcomes this extension, which gives industry the regulatory certainty it needs to complete the rollout. Smart meters supply the data that flexibility markets depend on, so the move to 4G must be delivered on time to keep that data reliable for consumers and innovators.
Extension of energy smart mandate to battery energy storage systems
The Energy Independence Bill amends the Energy Act 2023 so that the smart mandate already covering EV charge points, heat pumps and some heating appliances can be extended, through secondary legislation, to battery energy storage systems (BESS). Batteries sold in Great Britain would then be required to come with smart functionality, though consumers could still choose not to use it. The government has said it will use this power only if the BESS market does not develop smart capability quickly enough on its own.
The aim is to unlock consumer-led flexibility, which the Clean Power Action Plan puts at a potential 10–12 GW, while growing the energy smart appliance market and supporting energy security. Smart batteries make it easier for households to shift their use to off-peak times, which reduces how much generation and network infrastructure is needed. Households with low peak-time use could save over £200 a year by switching to a time-of-use tariff.
This backstop approach gives the market a clear direction while leaving room for industry to lead. techUK urges any mandate to be built on open, interoperable and secure standards, so that consumers can switch between flexibility providers and devices work together across the system.
Removing charges to unlock energy flexibility
The government recognises that flexible electricity use (where households and businesses shift when they use, store or export electricity to match supply on the grid) is not being rewarded, but in fact discouraged by the way certain costs are levied on electricity suppliers. The Energy Independence Bill addresses this by giving the Secretary of State powers to remove these costs where electricity is re-exported to the grid, for example through home batteries or vehicle-to-grid systems, or where demand is increased to absorb excess renewable generation that would otherwise be wasted (“demand turn-up”).
The aim is to make charges better reflect flexible electricity use, increasing participation in flexibility services, supporting the uptake of flexible technologies and giving consumers access to cheap surplus renewable power. The impact assessment estimates that vehicle-to-grid alone could deliver around £200 million in cumulative household savings between 2025 and 2040.
techUK welcomes this policy direction, which could be used to incentivise and reward non-domestic demand, such as data centres, to increase usage at times of surplus, and potentially to locate in areas like Scotland, where large amounts of wind power are currently curtailed. For this to work, the incentive must be meaningful, which in practice means substantially cheaper energy.
Hydrogen to power business model
Despite the laudable action on removing charges to unlock energy flexibility, one more concerning element of the Energy Independence Bill is the potential for a new levy on electricity suppliers, similar to the Contracts-for-Difference (CfD) mechanism, to fund the hydrogen to power business model. This model will derisk hydrogen-fired power stations by providing financial support from the government, with the aim of addressing two major blockers to deployment - cross-chain risks and a high level of uncertainty - due to an immature hydrogen network and the use of nascent technologies. A competitive allocation process will be used to select eligible projects, again much like the CfD allocation rounds.
Whilst techUK supports the government's objective of unlocking new technologies, the proposed introduction of a new levy – even in the long term – is incredibly disappointing just one week after the Autumn Budget stated "no new policy costs will be put on bills until a comprehensive Cost Control Framework is in place at the spending review in 2027". The government must hold firm on this commitment and ensure the new Framework sets out a path for moving levies from bills to taxation over this parliamentary term.
Heat network zoning – charging powers
The Energy Independence Bill also has a focus on heat, following the Energy Act in 2023. This Act created heat network zoning, which lets government designate areas in England where heat networks are the cheapest low-carbon option and require certain buildings there to connect. The scheme launches later this year.
However, the Act did not address how these networks could get off the ground in the first place, with heat network developers having to cover all upfront connection costs, making projects riskier and harder to finance. The Energy Independence Bill aims to address this by allowing networks to charge buildings required to connect. This charge will be capped, at £0 for existing homes, while non-domestic buildings will pay no more than the cost of their alternative low-carbon heating (such as installing a heat pump). The non-domestic caps will be consulted on before they are introduced. The Bill also extends zoning requirements to Crown property, which was previously exempt.
Where feasible, heat sources such as data centres should connect to heat networks. However, retrofitting existing sites for heat offtake is extremely costly, so the focus should be on ensuring new data centres are built heat-offtake ready. This would support the economics of heat network build-out, but requirements must be fair and proportionate, recognising that the amount of heat available, along with siting and timing, depends on many other factors.
Warm Homes Agency
Another heat-related provision is the Warm Homes Agency (WHA). In response to feedback that people are often unaware of, or confused by, the grants and energy efficiency and decarbonisation schemes available for their homes, the Energy Independence Bill paves the way for a new executive agency, the WHA, to help deliver the Warm Homes Plan and guide consumers through home upgrades.
The WHA will absorb the functions of Salix (a Government-owned organisation that delivers energy efficiency and net zero funding programmes across the UK), along with relevant roles from DESNZ and Ofgem, so no additional public body is created overall. It will administer schemes, provide impartial consumer advice, and support mayors to deliver local upgrade programmes. The Bill allows schemes to be transferred out of Ofgem to the WHA or another designated body, together with the powers to enforce, audit and gather data on them, and enables data, contracts and IT systems to be shared and transferred.
A single, recognisable body to simplify the consumer journey is a good step. Its success will depend on strong digital foundations, including common data standards and effective data sharing. The WHA should build on AI tools already improving customer service across the energy sector. Suppliers such as ScottishPower and EDF Energy are using analytics to speed up interactions. AI is also helping to support vulnerable customers, by analysing call transcripts for language and tone to spot needs that might otherwise go unnoticed, and by mapping households at risk of fuel poverty to target grants. The tech sector has much to offer in supporting the WHA’s mission.
