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The price freeze is welcome – but does it just kick the energy efficiency can down the road ?
Following the announcement of the government ’ s energy price cap , Edgetech Managing Director Chris Alderson questions whether this latest policy makes a major error by ignoring energy efficiency .
Britain , like much of Europe , is entering a worsening energy crisis . In order to address the impact this is having on the British public , Prime Minister Truss revealed plans to freeze energy prices .
From 1st October , the government would cap annual household energy bills at £ 2,500 for two years .
The government under Truss also committed to cutting business energy bills by more than half for the next six months .
Now Rishi Sunak has taken over as Prime Minister , the question arises : will these plans change ? At the time of writing , it appears that the substance of the energy cap policy will remain the same , except that it will now only last six months rather than two years . Despite the shortened timespan , the measures are still welcome .
They reduce the likelihood that Britain will enter recession – or if , like some economists believe , we ’ re in recession already , they increase the chances that it will be a mild one .
They ’ ll also provide relief for millions of households and business owners around the country , who were previously facing a very tough winter .
However , it ’ s also important to stress that these measures aren ’ t a magic bullet solution .
Rocketing energy prices have already seen the energy cap rise by 54 %, taking it from £ 1,277 a year to £ 1,971 – and causing more than 25 energy suppliers to go bust .
That means there are thousands of families and businesses struggling under the weight of bills that are more than double what they were at the start of the year .
It will still be a difficult winter for many , and it remains to be seen what support will be available when the policy expires in 2023 .
A “ gap in policy ”
But what about energy efficiency ? Britain has the least energy efficient homes in Europe . It ’ s mostly soaring fuel prices that ’ s caused the cost-of-living crisis , but this winter our draughty homes will certainly exacerbate it .
The current policy does not address this and does not account for how critical energy efficiency is to tackle the cost-ofliving crisis and how important it will be for Britain ’ s long-term goal to reach net zero .
The UK ’ s Climate Change Committee has already commented on what it sees as a “ gap in policy for better insulated homes ”, particularly criticising the fact that “ there are no policies for energy-efficiency in owner-occupied households which are not fuel poor ”.
According to Bankers for Net Zero and the Green Finance Institute , 29 million UK properties need retrofitting to make net zero a reality – something which would require Britain ’ s retrofit sector to increase by at least ten times .
The return of fossil fuels ?
The Climate Change Committee believes we ’ re currently on track to cut just 40 % of the carbon we ’ d need to eradicate to meet net zero .
However , policy addressing Britain ’ s commitment to the environment and reaching net zero going forward is unclear .
Whilst there was discussion to reverse the ban on fracking , which releases large amounts of methane ( a greenhouse gas with 80 times the warming power of carbon dioxide ), the government has decided to keep the ban on fracking . However , there are questions surrounding the government ’ s plans for new oil and gas drilling projects in the North Sea .
If Britain does re-embrace fossil fuels , the role of energy efficiency will become more critical if we are to achieve net zero . However , without a wide-ranging home retrofitting programme , I suspect progress towards that goal will be very slow .
www . edgetechig . co . uk
54 DECEMBER 2022 CLEARVIEW-UK . COM