The energy industry body Energy UK has referred to an announcement made on 8 February 2022 on the increase in the energy price cap, which will apply from April1. The body set out its position in a blog published on 9 February 2022, written by Naomi Baker, which also covered the publication of the BEIS Committee's nine-month inquiry into the decarbonisation of heat1.
The blog describes the price cap announcement as arriving in a week when "the gas crisis dominates the headlines"1. It does not give the level of the cap or the size of the increase. Those figures have not been reported in the material available here.
On the heat inquiry, Energy UK said the report diagnosed "over a decade of policy failure" and called for a long-term, urgent, and coherent policy response, described as a heat "roadmap"1. The blog states that the report highlights the failure to fix the UK's leaky housing stock, and that had the previous supplier-led programme of insulating lofts and cavity walls continued at the 2012 rate, when 1.6 million lofts were filled, all 15 million homes needing basic measures would have been done by now1. It adds that this would have saved more every year than the current rescue package will do for a year1.
The blog also states that heating homes are the emissions-equivalent of petrol and diesel cars, and that there are "significant policy voids for homes (notably finance, heat networks, and 'able to pay' households)"1. It refers to a decision in 2015 to cut green measures, now thought to have cost £2.5bn1, and to an ambition to cut the cost of heat pumps by up to 50 percent by 20251. Energy UK said it submitted a response last month to a proposal to drive up heat pump deployment and drive down costs via a mandate on heating manufacturers1.
"This week saw yesterday's announcement on the increase in the price cap, which will apply from April."
Why it matters for households
The price cap sets the maximum a supplier can charge for each unit of gas and electricity, and for standing charges, on a default tariff. An increase applying from April therefore changes what a household on a default tariff pays per unit, not the total bill, which still depends on how much energy is used. The level of the April cap is not given in the material here, so the size of the change for a typical household has not been reported.
The heat inquiry material points to the physical side of the same problem. Energy UK's account says the UK's housing stock remains leaky, and that a programme that once filled 1.6 million lofts in a year was not continued1. For a household, the insulation standard of the building determines how much of each unit bought is retained as heat, which sits alongside the unit price in determining what is spent over a winter. The blog notes policy gaps on finance, heat networks and households classed as able to pay1, which are the areas where a home's own measures would be funded or delivered.
What happens next
The increased cap applies from April 20221. Energy UK's blog does not set out further dates for the heat proposals beyond the stated ambition to cut heat pump costs by up to 50 percent by 20251.
Sources1 cited
- ‘A roadmap for heat'? - Energy UK, energy-uk.org.uk