Energy efficiency is security strategy’s ‘biggest gap’- Carney

Demand reduction is the “biggest gap” in the government’s recently published energy security strategy, Mark Carney has said.

The former Bank of England governor, who was giving evidence to the House of Lords economic affairs committee yesterday (26 April), said while there were gaps in the strategy around how the UK would meet its energy supply needs, these were less important than those surrounding demand.

He said: “The biggest gap is on demand side where there has been much less attention to material policies around energy efficiency.

“Only about a quarter of homes in the UK are at the highest levels of efficiency so there is substantial room for improvement on the energy efficiency of housing.”

Adding that the government’s strategy on heat pumps needs further development, Carney said: “There is a host of things that the government could do well to turn greater attention to.”

The United Nations special envoy for climate action and finance also backed a suggestion by his Bank of England predecessor Lord King for a more widespread rollout of carbon taxes.

“The case is very strong for a price on carbon widely applied with maybe some appropriate rebate for less well-off households.”

Carney told the committee that the economics of liquid natural gas (LNG) infrastructure are becoming less “competitive”, relative to lower carbon sources of energy, due to the diminishing time horizons they will be in use as fossil fuels are phased out.

The “historic” assumption that an LNG plant would be expected to run for 40 years is ”not realistic” in the context of the transition to net zero emissions by 2050, he said: “That really focuses the mind in terms of whether it is worth in terms of bringing these things on stream if they are only going to be run for 15 to 20 years.”