On 4 November 2026, the UK government introduced its Energy Independence Bill (EIB). It follows on from the Autumn Budget announcement where the government introduced a number of measures focused on lowering customer bills and signalled a major overhaul of Britain’s energy system, prioritising clean energy investment. 

The EIB plans to deliver on the promises outlined in the Budget and is being described as landmark legislation from the government, seeking to enable families and businesses to benefit from a fairer energy system, cheaper bills and greater public control.

One of the key features of the EIB is the provisions to “streamline” Ofgem’s regulatory role and expand its powers in relation to new and emerging regulatory challenges and needs. The accompanying fact sheets to the EIB explain the government’s belief that Ofgem’s current framework is no longer fit for purpose, pointing to decades of accumulated duties leading to a complex landscape for decision making. It states this has “hindered Ofgem’s ability to promote the long-term interests of consumers and communities that will be realised through the transition to cleaner, cheaper energy”.¹ The EIB seeks to restructure Ofgem’s powers and provide it with a stronger mandate to protect consumers. The key provisions restructuring Ofgem’s powers are outlined below. 

• The EIB provides for a reorganisation of schemes currently delivered by Ofgem and DESNZ. It establishes a flexible “designated administrator” model under which responsibility for administering and enforcing a range of statutory and non-statutory energy schemes may be transferred either to the Warm Home Agency or to another body via secondary legislation or transfer scheme powers in the Bill. This includes the transfer of some existing statutory schemes out of Ofgem via secondary legislation, which is believed to give Ofgem more space to allow it to refocus on its core regulatory functions, a change that Ofgem has welcomed. The reorganisation is said to be based on allocating delivery responsibilities in a way that best aligns with the nature and objectives of each scheme.² The EIB also restructures enforcement, compliance, audit and information-gathering powers so they sit with each scheme’s administration function, enabling designated administrators or the Warm Home Agency to take enforcement action and coordinate with Ofgem where necessary.
• The EIB intends to appoint Ofgem as the regulator for third-party intermediaries (TPIs). The government highlights that presently, there is no dedicated regulator for TPIs and there are no protections for consumers beyond general consumer law. This is said to have led to a minority of TPIs choosing to use predatory sales techniques to charge high commissions while providing biased advice, leaving consumers overpaying for poorly suited energy contracts. The EIB seeks to give Ofgem the power to investigate rule breaches, order redress for consumers, issue penalties and, where appropriate, remove TPIs from the market.³
• The EIB provides Ofgem with the power to amend certain electricity market arrangements relating to network charging, system balancing and trading. It was felt that the existing processes for amending codes and licences are “lengthy” and “complex” and do not allow Ofgem to deliver “wide-ranging strategic reform at pace”.⁴ The Bill seeks to establish an alternative statutory route for delivering changes in these circumstances.
• The EIB also creates a new electricity licence type for the provision of dedicated network services to electricity transmission and distribution systems. This is intended to provide “regulatory clarity” and support investment, innovation and further rollout of assets providing these services. The new licence will provide oversight and control over the assets by Ofgem.
• The EIB introduces a General Authorisation Regime, allowing Ofgem to regulate certain activities through proportionate requirements based on risk, rather than through full licensing in all cases.⁵ This approach is intended to support innovation while ensuring appropriate regulatory oversight and enforcement, acknowledging that under the current framework, as new energy-related activities and markets emerge, existing licensing models may not always provide proportionate or flexible oversight which can lead to gaps in consumer protection or regulatory consistency.
• The EIB intends to create a new licence type under the Electricity Act 1989 for the operation of a power exchange, bringing power exchanges within Ofgem’s licensing and regulatory framework.⁶

What happens next?

On Wednesday 4 November the EIB had its first reading in the House of Commons. The Bill will now continue to be debated in both the House of Commons and House of Lords until it completes all stages and receives Royal Assent. It will be important to follow it as it progresses, particularly to see how many amendments are tabled to the Bill as it is further debated. How long it will take to progress through to Royal Assent will depend on how easily the two Houses can agree on the contents of the EIB and whether any of the clauses prove to be too controversial, sparking longer debates and difficulty in getting it passed through each stage.

Footnotes

1. Department for Energy Security & Net Zero, 4 November 2026, Energy Independence Bill fact sheets – Measures to strengthen Ofgem.
2. Energy Independence Bill, Explanatory Notes, paragraphs 22-27.
3. Energy Independence Bill, Explanatory Notes, paragraph 42.
4. Energy Independence Bill, Explanatory Notes, paragraphs 62-63.
5. Energy Independence Bill, Explanatory Notes, paragraphs 36-37.
6. Energy Independence Bill, Explanatory Notes, paragraph 68.