Over the years, the UK government has repeatedly vowed to cut carbon emissions by a significant margin and shift towards renewable energy. But, achieving this decarbonisation target will trigger several changes in energy regulations law.
Whether it be the advancement of renewable technology or the democratisation of data, the energy industry is undergoing significant changes that will transform how it operates, and the regulatory bodies across the world need to amend current laws to regulate the ever-evolving energy industry.
For example, the system that regulates carbon credits is still evolving and we can expect regulatory institutions to update their laws to reflect their better understanding.
Here, the role of regulatory bodies will change within the energy industry. Understanding what the new role of regulatory institutions will be could indicate the type of laws and amendments.
How will energy regulation law in the UK change in the next few years?
In the past, the main aim of energy regulators in the UK was to ensure that services were provided at affordable rates.
However, with the UK government looking to decarbonise, we can expect the role of regulators to evolve, which in turn, is going to affect energy law in the UK.
Here are certain key regulatory developments that could affect energy companies.
The shift towards long-term thinking
Past regulatory frameworks have been criticised for encouraging short-term-focused behaviour.
Hence, we can expect regulators to set up new regulatory frameworks that incentivise and reward long-term behaviour.
For example, the Environment Act 2021 has put forth environmental targets that are expected to be achieved within the next 15 years. To match this new framework and methodology, organisations need to adopt a similar approach to their operations, which means adopting a long-term view of energy production or consumption.
Greater coordination between industries and departments
Achieving net-zero carbon emissions by 2050 requires significant coordination across different government departments and private corporations across different sectors and regions.
Hence, we can expect regulators to facilitate greater coordination between different industries and organisations.
But, this could affect company operations because future regulations may demand greater transparency, which could force energy companies to reconsider compliance reporting procedures.
Data analytics will become a major focus
As advanced analytics and automation tools become more readily available, regulators need to ensure that these technologies are directed towards the benefit of the entire industry, as these technology tools will be critical for meeting the requirements of decarbonisation because they provide detailed insight into energy use.
Here, we expect regulators to unveil regulatory guidelines that will push energy companies to adopt more sustainable practices in energy production and distribution by leveraging advanced analytics and automation tools.
How can organisations meet these new challenges?
With key developments transforming energy regulation in the UK, energy companies must modernise regulatory compliance to ensure that they are ready for the challenges that will define the energy industry in the coming years.
To meet these demands, energy companies need to reconsider their regulatory process and adopt modern platforms that allow them to streamline their regulatory procedures. This will enable them to keep up with the latest regulatory updates and adjust internal processes to match them.
This is where RegTech platforms will prove to be critical.
Modern regulatory intelligence tools place the power and convenience of automation, analytics, and NLP in the hands of compliance teams, allowing them to modernise internal regulatory processes.
Leveraging RegTech platforms allows energy companies to streamline processes using automation, obtain rich insights with analytics, and simplify compliance management.
Most importantly, regulatory compliance solutions allow you to streamline one of the more complex internal processes—identifying compliance gaps by mapping internal procedures to regulatory updates.
Leverage the power RegTech to navigate regulatory developments in 2022
Today, the energy industry is going through a critical juncture as increasingly vocal demands for sustainable energy has forced the hand of regulators to enforce a range of regulatory updates that aim to push the industry in the right direction.
Thankfully, energy companies can keep pace with this rapidly changing regulatory landscape by leveraging RegTech solutions to optimise their compliance processes.