Energy Act 2016

Overview of the Act

Reproduced verbatim from the Explanatory Notes published with the Act on legislation.gov.uk (Crown Copyright, Open Government Licence v3.0). Explanatory Notes are prepared by the responsible government department and are not part of the Act.

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 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.

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.

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.