We must insulate households from volatile prices, for good

Energy efficiency is the most obvious response to the energy crisis facing households, but it’s being ignored.

By Juliet Davenport OBE HonFEI, President of the Energy Institute

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Each year when we survey the Energy Institute’s members in the UK, it’s no surprise to me that they come back with sensible views. After all, they know what they’re talking about, they’re on the front line day-in-day-out delivering the energy and energy services on which we all depend.

Our Energy Barometer is published this year in unprecedented circumstances. Russia’s invasion of Ukraine has upended Europe’s energy security assumptions; consumers are at the sharp end of this and other international pressures on supply, leading to the highest energy price increases since 1970; and all against the backdrop of worsening climate change impacts and emission projections.

Energy sector points to energy efficiency as key solution

So what do our members say when asked what the most important response to these severe challenges should be? More than any other option, and regardless of whether they work in energy supply or demand management, they say two words: energy efficiency.

There’s been a chorus of heavy hitting figures saying similar over recent weeks. We’ve heard the Climate Change Committee’s Chris Stark describe government policy in this “absolutely critical” area as “a complete tale of woe”; CBI Director General Tony Danker say “we need to start being serious about energy efficiency, because to date, we haven’t been”; and International Energy Agency Executive Director Fatih Birol HonFEI assert efficiency is “utterly essential” and the lack of progress made by governments “inexplicable”.

These voices echo others in environmental and consumer campaign organisations, and today the Energy Institute adds the weight of the UK’s energy professionals to these increasingly desperate pleas for demand side policies to help hard-pressed consumers.

Energy efficiency and fuel poverty

70% of energy sector surveyed for the Energy Barometer don’t see existing energy efficiency policy having had any positive effect over the past year. Worse still, nine in ten see fuel poverty policy as failing.

But the failures go back further. The UK has some of Europe’s oldest, leakiest buildings and yet, a decade ago, the Government cut support for insulation resulting in a 90% fall in installation rates. Progress upgrading the building stock has stagnated, adding an estimated £2.5 billion to the nation’s energy bills.

At the end of last year, a third of UK properties with a loft had no loft insulation, 30% of properties with a cavity wall had no cavity wall insulation, and nine in ten properties with solid walls had no solid wall insulation. The average energy performance rating for homes in England and Wales is a D. Improving these and poorer performing homes to a C could save households around £500 a year, permanently.

Policies that could support improved energy efficiency

What our Barometer survey calls for is an enduring, nationwide home energy efficiency endeavour. Tackling the low hanging fruit and getting all homes to energy performance rating C or above is ranked in our survey as the most important step for protecting households from price volatility.

This needs to be delivered in innovative ways, with subsidies provided where needed, and be accompanied by information and advice campaigns to help consumers weather the storm. It’s a decade since the last major energy efficiency campaign in Britain ended, and our survey calls for action on this too. Almost 60% call for behaviour change campaigns backed by central government to help consumers reduce energy use.

It’s important to point out the Barometer is supportive of much of the policy and spending announcements made by ministers over recent months. The financial support being provided to households, in particular those on the lowest incomes, is welcomed, albeit as a stopgap measure. So too is the increased ambition for low carbon energy supply, which is rated in our survey as the second most important response to the current crisis. Renewables such as wind and solar have plummeted in price over the past decade and, set against spiralling gas prices, have cemented their place at the heart of our future low carbon, secure, affordable energy system.

But with the typical household energy bill from this October now estimated to be as high as £3,400, almost three times what it was a year earlier, and the number of households in fuel poverty possibly beyond 12 million, we have to do more, quickly, to insulate Britain’s households from spiralling gas prices.

We need an exit strategy from this crisis, and energy efficiency is the one thing that ticks all boxes, and for good. Lower demand for imported energy, for good. Lower greenhouse gas emissions, for good. And lower bills - for good.

Energy Barometer 2022: CRISIS RESPONSE is published by the Energy Institute at www.energyinst.org/barometer/2022