Long term action is needed to reduce fossil fuel reliance and cut energy bills

The UK Government’s Spring Budget provided some short-term relief for energy bills, but does not address the longer-term issues of the climate and energy crises

They share the same root cause: our overreliance on fossil fuels. The way forward is clear, to cut people’s energy bills for the long term and meet net-zero targets, we must urgently reduce our overall energy consumption by investing in energy efficiency and accelerating the electrification of heat.

I welcome the extension to the Energy Price Guarantee and the announcement on bringing prepayment prices in line with those who pay by direct debit, which will provide some relief for many people struggling to pay their energy bills. Even with this support in place, energy bills are still more than double what they were two years ago.

Energy bills are more than double what they were two years ago

Alleviating the immediate cost of energy for households remains essential but we also need investment in long-term solutions that address the root causes of our lack of resilience to high energy prices: our use of fossil fuels and our inefficient buildings. Britain’s homes are among the most inefficient in Europe. Too many people pay for heat that simply escapes, wasting money, while needlessly releasing emissions.

Improving the energy efficiency of Britain’s homes

The UK Government has said positive things about improving the energy efficiency of Britain’s homes, including setting a target to reduce energy use by 15% by 2030. Despite such positive announcements, there is still a lack of detail of how this is going to happen. The Spring Budget was yet another missed opportunity to set out firm, actionable, long-term plans that clarify exactly how the UK is going to reduce energy demand.

As Energy Saving Trust – and so many other expert energy and environmental organisations – have long called for, we need a plan for a national retrofit programme that will install energy efficiency measures, primarily insulation, into people’s homes.

The plan must also include compelling incentives for people to swap their gas boilers for low-carbon heating systems, such as heat pumps. As it stands, key policy gaps are hindering the widespread takeup of heat pumps. Upfront costs are a barrier and much more needs to be done to help people access grants and low-cost finance. Until both, the cost of installing and running a heat pump are consistently competitive with, or better than, a gas boiler, affordability will remain a significant barrier for too many.

These measures should sit alongside major investments in clean, low-cost renewable energy sources, like wind and solar.

Following Scotland’s lead in the energy transition

To empower households to understand the right measures for their homes and make these changes, we also need a national advice service in England, providing tailored support on energy efficiency and low carbon heating for homeowners – as already exists in Scotland.

Over £2 billion of unallocated energy efficiency funding that was pledged in the Conservatives’ 2019 manifesto

Of course, the plan should explain how the UK Government will provide the funding for these programmes. For a start, there’s still more than £2 billion of unallocated energy efficiency funding that was pledged in the Conservatives’ 2019 manifesto. It should be urgently invested in upgrading people’s homes.

The potential financial and environmental benefits of such a plan are vast. For example, NESTA estimate that if all of Britain’s homes with gas boilers switched to heat pumps, the savings in wholesale gas costs would be equivalent to 1.2% of GDP. As 85% of our homes are connected to the gas grid, switching to electric heating at scale is also vital to rapidly reducing carbon emissions in the transition to net zero.

The latest Budget has done little to set out the UK Government’s approach

Last summer, the UK Government’s own climate science advisers at the Climate Change Committee warned that it was not on track to reach net zero. Just this week – 20th March – the IPPC published its Sixth Assessment Report which is likely to be the last such assessment published while the world has a chance of limiting global temperature rises to 1.5C. While we await a further update from the Department for Energy Security and Net Zero on an anticipated detailed approach to meeting net zero by 2050, the latest Budget has done little to set out the UK Government’s approach.

The consequences of not hitting these vital climate targets are unthinkable. On the other hand, there are no downsides to taking action on the climate. Delivering energy-efficient homes and businesses will improve energy security, boost the UK economy, end our dependence on unstable international oil and gas markets and help stabilise the climate crisis. Time is running out and at this critical moment in history, we urgently need the UK Government to finally turn ambition into action.

Stew Horne, head of policy, Energy Saving Trust