‘National war effort’ needed on energy efficiency

The government has been urged to set a target of one million energy efficiency installations a year by 2025, rising to 2.5 million per annum by the end of the decade.

The challenge is set out in the conclusion of an inquiry by the Environmental Audit Committee (EAC), which also called on the government to “urgently bring forward” measures to incentivise energy efficiency via the mortgage market.

Reflecting on submissions received throughout 2022, the EAC concluded that the government had missed a “crucial window of opportunity” to accelerate insulation measures during the warmer months of last year. While welcoming a promise of £6 billion of future funding, the committee warned that “those in fuel poverty cannot afford three winters of delay”. It described the decision to hold this money back as a “false economy” and called on the chancellor of the exchequer to allocate a proportion of the revenue from the windfall tax on generators to bring forward this energy efficiency focus.

It added: “A  national  ‘war  effort’  on  energy  saving  and  efficiency  is  required.  Upgrading  homes  to Energy Performance Certificate C or above must be treated as a national priority to enhance  the  UK’s  energy  security,  reduce  bills  and  cut  emissions  from  the  country’s  leaky and draughty building stock.”

The Accelerating the Transition From Fossil Fuels and Securing Energy Supplies report praised the ambition of the government’s Energy Security Strategy but said there were significant gaps. It described the document as “in essence an energy supply strategy” with too little focus on the demand side. It also cited “notable gaps” on renewable energy and called on the government to set out a clear strategy for onshore wind, clarify the position on using agricultural land for solar farms and set a stated ambition for generation from tidal and marine energy.

It also noted that transport should have been included in the strategy and called for more collaboration between the departments for Business, Energy & Industrial Strategy; Levelling Up, Housing & Communities and Transport.

It also demanded more decisive action from government on ending new oil and gas licencing rounds.

On windfall taxes, the report said the government was right to introduce the Energy Profits Levy on oil and gas companies despite protestations to the committee. However, it concluded renewable energy generators are not receiving the same level of “generous tax relief” for new investment. It therefore recommended the government examines how a low-carbon investment allowance could be introduced for electricity generators.

The committee asked for a revised Energy Security Strategy to be published in Spring 2023 indicating progress on reducing reliance on Russian imports, securing energy supplies and improving energy efficiency.

EAC chair Philip Dunne said: “The government’s British Energy Security Strategy and its intervention to cap household energy prices should be praised. But there have been significant missed opportunities in recent months: the government could have gone further and faster.

“To reduce the UK’s demand on fossil fuels, we must stop consuming more than we need. We must fix our leaky housing stock, which is a major contributor to greenhouse gas emissions, and wastes our constituents’ hard-earned cash: we must make homes warmer and retain heat for longer. The government’s welcome new Energy Efficiency Taskforce can lead a national mobilisation to install energy efficiency upgrades, which we would like to see achieve an initial target of a million homes a year and more than double this by the end of the decade.”

He added: “The UK has enormous renewable energy potential and sectors such as offshore wind are booming. But more must be done to harness the opportunities which onshore wind, tidal and solar technologies provide. Developers should be required to fit solar panels on new homes as standard.

“Bold action is needed now. The last year, with Russia’s aggression in Europe choking energy supplies, has shown us just how vulnerable our over-reliance on imported fossil fuels can make us. The committee has today set out a number of clear recommendations to drive real change: I hope the government will act swiftly to implement them.”

Eon UK chief executive Michael Lewis, a witness as part of the inquiry, welcomed “yet another authoritative voice calling for a greater nationwide energy efficiency effort”.

He added: “The government’s action so far to support energy consumers is as welcome as it is necessary, and equally so is the ambition towards decarbonising our electricity system. What’s missing is an energy reduction strategy that provides immediate help for people in fuel poverty.

“Unfortunately we’ve already missed the summer’s crucial window of opportunity to stamp hard on the accelerator for greater energy efficiency at a time when households are struggling and the taxpayer is having to spend billions to subsidise energy bills. The money that was promised won’t be seen until 2025 – effectively kicking the can down the road until after a general election.

“Energy efficiency numbers have fallen drastically since the ‘cut the green crap’ days almost a decade ago, with millions of homes missing out on upgraded loft, cavity and solid wall insulation. Many households are paying far more for their energy needs and we must reverse that trend and deliver the £9 billion in support promised by the government’s 2019 election manifesto.

“We know what works and how to provide support at scale. It’s in the government’s gift to ensure the new expanded Energy Company Obligation scheme can start delivering for people from April and we need confirmation of the design of ECO plus as soon as possible so our supply chains can gear up in readiness.”