Net zero delays could cost UK £39bn

A failure to move quickly enough on the UK’s net zero targets could have added up to £2,150 to household bills in 2022, new research has found.

The Energy and Climate Intelligence Unit (ECIU) examined the impact of delays in deploying renewables, insulation, rooftop solar panels, heat pumps and electric vehicles.

Its analysis found that some households could have saved around £1,750 on energy bills last year, had the UK moved quicker on its climate targets.

In addition, the impact of climate change and oil and gas prices on the farming and food system means households are facing more than £400 extra in food bills.

For the UK as a whole, ECIU added, the costs of a slower path to net zero could be in the region of £39 billion.

The report criticises the government’s de facto ban on onshore wind in England, as well as the exclusion of onshore wind and solar from two rounds of CfD auctions which it says have led to stalling deployment.

ECIU said faster switching to renewables could have enabled power generators to improve performance and cut prices sooner, potentially saving £17 billion, or £260 per home in 2022 (£220 for the household and £40 for the government).

It further examines the impact of lower insulation rates, with the government having cut support schemes in 2013.

It said improving a home’s Energy Performance Certificate (EPC) from band D to C reduces heating demand by 21%, E to C saves 32% and the leap from F to C saves 37%. These savings, it added, are far higher during the current gas crisis.

“Band D homes could have saved £221 on their energy after an upgrade, band E would have saved £391 and a band F home £476 in 2022. Over 80% of the savings would be taken from household bills and the rest would be a cut to the government’s price freeze costs,” the report said.

Contrasting the UK’s heat pump rollout with that of other European nations, ECIU said the UK is “lagging far behind” countries such as Estonia and Poland. Estonia, for example, sold 1,583 heat pumps per 100,000 people in 2021 and Poland sold 259 per 100,000, 25 times and 4 times more than the UK at 63 in 100,000.

Had Britain matched Estonia, it added, domestic gas use would have been a third lower during the current gas crisis.

“The saving for a typical home with a heat pump in 2022 was £145 a year. For a home with insulation upgrades to band C plus a heat pump, the total savings were £350,” it said.

Commenting on the findings Jess Ralston, head of energy at ECIU, said: “The IMF says that the UK is over-reliant on gas and that particular chicken has come home to roost this year with many households struggling to pay their bills.

“It’s clear that had investments in home insulation, onshore wind and other net zero technologies been made earlier, homes could be thousands of pounds better off.

“Upfront investments are needed, but just as green levies on bills have built a renewable energy industry delivering cheap, clean electricity and jobs, the paybacks are measured in thousands of pounds for homes and billions for the UK as a whole.”