The Chancellor announced an enhanced package of support for customers, according to Energy UK, which attributed the move to international wholesale gas prices compounded by the Russian invasion of Ukraine1. The industry body set out its position in a blog published on 31 May 2022 by its interim chief operating officer, Siobhan Kenny, which refers to the announcement as having been made "yesterday"1.
Energy UK said the statement was a missed opportunity on making homes more energy efficient, noting that gas is used for heating in approximately 85% of UK homes1. It pointed to the Energy Company Obligation (ECO) scheme, whose latest phase, ECO4, is expected to deliver green home upgrades to an estimated 450,000 households over four years, achieving up to £224.3 million in annual bill savings1. Delivery at scale over the summer was being made difficult by delays to the regulation being laid in Parliament, and Energy UK said it had written to the Minister for Business, Energy and Corporate Responsibility to support bringing that regulation forward as soon as possible1.
The government opened the Boiler Upgrade Scheme for voucher applications in the same week, providing grants to households changing their heating system to an air or ground source heat pump, or a biomass boiler1. Energy UK also said the government had published its response to the consultation on the market-based mechanism, which will obligate manufacturers of fossil fuel heating appliances to meet a rising target for low-carbon appliance sales, and that it had adopted many of the approaches Energy UK supported1.
"The Chancellor's statement yesterday was a missed opportunity in this respect."
Why it matters for households
The package described by Energy UK addresses the immediate cost of wholesale gas and electricity prices feeding through to energy bills. Energy UK's argument is that support of that kind does not change how much gas a home uses, and that the roughly 85% of homes heated by gas remain exposed to the same price pressure in later years1.
The measures it highlights work on the other side of the equation. ECO4 funding is directed at energy efficiency improvements for vulnerable and low-income households, which Energy UK said has a proven track record1. The Boiler Upgrade Scheme and the market-based mechanism for low-carbon heat are aimed at the heating system itself, and Energy UK said that taken together they will help reduce the cost of heat pumps throughout the 2020s1. For a household, the distinction is between help with a bill in a given year and a permanent reduction in how much energy the home needs or what it runs on.
Energy UK also said provision must be made for energy efficiency in the government's forthcoming Energy Security Bill, providing support to vulnerable consumers and building an "able to pay" market1. It said it wants further commitments from government on consumer protection and on setting penalties high enough to incentivise delivery1.
What happens next
Energy UK said it is keen to see further commitments from government on consumer protection and on penalties sufficient to incentivise delivery under the market-based mechanism1. It said it supports the ECO4 regulation being brought forward as soon as possible, and that it has written to the Minister for Business, Energy and Corporate Responsibility on that point1. No dates for those steps are given in the blog1.
Sources1 cited
- Home Truths - Energy UK, energy-uk.org.uk