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Decarbonising the heat sector will protect consumers from future energy cost spikes

Decarbonising the heat sector will protect consumers from future energy cost spikes
5 min read

It’s time to level up our buildings and energy infrastructure and release the UK from its vulnerability to volatile fossil fuels.

Many of my constituents will be watching the news on gas prices with great trepidation. After an incredibly challenging nineteen months, soaring energy bills - just as we begin to switch on our heating for winter - will be hard to take.

While no quick fix to stem the price spike is available to us, the long-term answer lies in our transition to a decarbonised heat sector. We can cut ourselves free from the thrashing, out-of-control hose that is the global gas market.

We’ve seen before how the price of gas is volatile. We saw a less extreme price spike in 2018, and will undoubtedly see more in the future as long as we depend on gas. Boilers heat 85 per cent of our homes here in the UK, which means households will always be vulnerable to these shocks, even with the price cap (which Ofgem was forced to raise to prevent larger energy suppliers folding).

The electrification of heat and reduction of gas demand is the long-term solution to cut bills and shield consumers from spikes. Renewables are now the cheapest source of electricity available, and air source heat pumps, with an efficiency of 300 per cent (producing three units of heat energy for every one extracted from the air), are preferable to gas boilers, which have an efficiency of 90 per cent. I was pleased to see the Business Secretary affirm the government’s commitment to moving away from fossil fuels in his statement to the House and on social media.

We must create the right fiscal environment to enable people to switch to heat pumps

It’s undeniable that a lull in wind has reduced the amount of electricity available. While this isn’t responsible for our bills going up, it is something that needs to be solved as we build more cheap renewables. We must procure more low-carbon back-up capacity, through developing more energy storage such as batteries and hydrogen.

However, while the UK is already ahead in the global energy transition towards renewables, that’s only half the solution. On the demand end, we must create the right fiscal environment to enable people to switch to heat pumps. The Chancellor could expand the Clean Heat Grant to help us reach the Prime Minister’s goal of 600,000 installations per year by 2028.

Meanwhile, moving some of the environmental and social levies from electricity to gas bills would stop giving gas an artificial advantage over electricity during normal times, but wouldn’t make dual-fuel bills higher.

While electrification can slash bills on its own, it must be combined with the upgrade of our housing stock to capture greater savings and raise standards of living. Greater efficiency through retrofitting insulation makes houses warmer while using less energy, which means relief from gas price spikes in the short to medium term. This would reduce fuel poverty, which unjustifiably afflicts those who cannot afford to upgrade their homes versus the more well-off people who can. In the long run, this would also allow us to phase-out the energy bill levies focused on mitigating the costs of fuel poverty.

The Heat and Building Strategy provides a chance to accelerate energy efficiency improvements across the country through a combination of more government support for lower-income households and incentives for the able-to-pay. A requirement for a property to be rated at EPC C at the point of sale is one idea gaining traction that could help us to meet our target in the Clean Growth Strategy, for as many homes as possible to be EPC Band C by 2035.

We already do this in the private rented sector in England, where homes must achieve a minimum energy efficiency standard of EPC Band E before they can be let. However, we must seek to raise this to EPC Band C but help our constituents get there through government support.

Front-loading our £9.2 billion manifesto pledge for energy efficiency, expanding funding for the Levelling Up fund and leveraging private finance via the new UK Infrastructure Bill will ensure we all have the resources required.

As well as the combined benefits of cheaper bills and warmer homes, these policies would help to build the energy efficiency supply chain and expand refrotting jobs across the country.

There are 19 million homes across the country which are below EPC C, this means plenty of demand spread right across the country for SMEs in the construction sector. This is where the 50,000 energy efficiency jobs by 2030 projected in the 10 Point Plan lie.

Our Conservative government has set a lot of world-leading targets. We must get on with meeting them. The upcoming Heat and Buildings Strategy and Comprehensive Spending Review are the places to deliver on some of the biggest solutions, while relieving the short-term crunch on households finances.

It’s time to level up our buildings and energy infrastructure and release the UK from its vulnerability to volatile fossil fuels.

 

Steve Brine is the Conservative MP for Winchester.

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