King’s Speech: Major Energy and Infrastructure Reforms Announced

Last week, King Charles III set out the UK government’s legislative agenda for the next parliamentary session, with energy security at the centre of its priorities. The programme outlines proposed reforms across energy generation, regulation, and market structure.

This article provides a brief overview of the key energy and utilities-related measures announced in the King’s Speech, covering the Energy Independence Bill, the Nuclear Regulation Bill, the Electricity Generator Levy Bill, the Clean Water Bill, and the European Partnership Bill.

Energy Independence Bill

The Energy Independence Bill provides a sweeping legal framework to accelerate the deployment of homegrown clean energy and essential grid infrastructure. Designed to strengthen long-term national security, the legislation will permanently ban fracking and new North Sea oil exploration, legally anchoring the UK’s transition away from volatile global fossil fuel markets.

The Bill will modernise the energy sector by significantly expanding Ofgem’s regulatory powers to curb market malpractice by third-party intermediaries. It also aims to establish a new Warm Homes Agency to deliver targeted energy efficiency upgrades, while streamlining planning frameworks and land access rules to speed up grid connection timelines.

Nuclear Regulation Bill

The Nuclear Regulation Bill marks a significant overhaul aimed at unlocking a new era of British nuclear energy generation. Grounded in the recommendations of the independent Nuclear Regulatory Review, the legislation will establish a single decision-making body, the Commission on Nuclear Regulation, to act as the definitive arbiter for major civil and defence sector decisions.

The Bill will modernise legacy risk frameworks and remove legislative duplication, notably by merging the overlapping functions of the Office for Nuclear Regulation and the Defence Nuclear Safety Regulator. It also aims to accelerate project delivery timelines, providing the regulatory agility needed to support the rapid deployment of small modular reactors across the UK.

Electricity Generator Levy Bill

The Government has confirmed plans to increase the Electricity Generator Levy (EGL) from 45% to 55%, starting from 1 July 2026. The legislation targets the exceptional profits of certain nuclear, biomass, and renewable generators, acting as an incentive for operators to move toward Wholesale Contracts for Difference (WCfDs) to help shield consumers from volatile wholesale markets.

Under the revised fiscal framework, the increased 55% rate will apply strictly to receipts from electricity generated on or after the July start date. To ensure smooth compliance, accounting periods spanning this transition date will require revenues to be time-apportioned, meaning the higher rate will apply only to the latter portion of the period.

European Partnership Bill

The European Partnership Bill is designed to rebuild and strengthen the UK’s post-Brexit relationship with the European Union. The new law will give ministers the legal powers to adopt shared rules more efficiently and fast-track future treaties. This aims to reduce administrative barriers and lower trade costs for British businesses.

In relation to energy, the Bill would facilitate closer integration between UK and European carbon trading markets. It also establishes a framework to support potential participation in the European electricity market, with the aim of improving cross-border power trading efficiency and enhancing grid stability.

Clean Water Bill

The Clean Water Bill represents a significant overhaul of water regulation since privatisation. The legislation will establish a single integrated independent regulator by combining the functions of Ofwat, the Drinking Water Inspectorate, and relevant responsibilities within the Environment Agency and Natural England.

The Bill will strengthen oversight of water companies and introduce a new Water Ombudsman to provide consumers with greater recourse. It also aims to streamline infrastructure delivery by modernising long-term regional planning frameworks, supporting the development of more resilient water networks.

Final Thoughts

These reforms have the potential to support long-term industrial decarbonisation, improve infrastructure resilience, and gradually reduce commercial energy costs over time - developments that are broadly positive for the business community. However, there is limited focus in the current legislative agenda on addressing immediate cost pressures facing businesses.

Much of the government’s focus remains on long-term structural reform and consumer protection, leaving questions around how high industrial energy prices continue to impact UK competitiveness. While addressing underlying system challenges is important, businesses are likely to look for more immediate measures to ease short-term cost pressures alongside these longer-term reforms.

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