UK homes to be heavily dependent on foreign gas under Government plans – £5,700 per household over 12 years

As North Sea gas output declines, without investment in insulation, renewables and heat pumps UK’s gas trade deficit to approach £30bn, over 4x level before gas crisis.

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By George Smeeton

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New analysis from the Energy and Climate Intelligence Unit (ECIU) has found that current Government policies could leave British homes sending £500 a year to overseas gas producers, as import dependency rises to 85% by 2035. [1]

North Sea gas output will drop by 75% by 2035 according to official forecasts, as the mature basin continues to see production fall, requiring imports to increase. [2]

Unless policies are sped up for increasing British renewables deployment, insulating homes and installing electric heat pumps, UK homes will become even more heavily dependent on foreign gas for heating and electricity: currently the UK imports around half of its gas, but that could rise to 85% by 2035 without these net zero technologies.

A house with average insulation, a gas boiler and average electricity usage could be using £5,700 of foreign gas over the next 12 years. In 2035, this dependency would be around £500, of which an estimated £140 would be going to Qatar.

That contrasts with a ‘net zero’ home with good insulation, a heat pump and solar panels alongside a faster deployment of British renewables, which would be using £10 of gas come 2035, of which just £1 would be used for Qatari gas.

Overall, the UK would be paying up to £30bn a year for net imports of gas from the early 2030s, with the gas trade deficit being over four times the level it was before the gas crisis.

Commenting on the analysis, Dr Simon Cran-McGreehin, Head of Analysis at ECIU, said:

“You can’t squeeze much more out of the North Sea; its output has been declining and the official numbers show that’s going to continue. It’s simply running out of gas.

Those arguing against heat pumps are arguing for UK homes being more dependent on foreign gas. And with wholesale gas prices are predicted to stay two to three times higher than before the crisis, that means being dependent on an expensive fuel.

The Government has some of the right targets for UK energy independence, but not the policies to deliver on them.”

The Government has a stated aim for the UK to be energy independent. [3] The IMF has previously warned that UK households have been worst affected by the energy crisis because of our high dependence on gas for heating and power. [4]

Home insulation rates plummeted a decade ago when Government cut support schemes [5] and have even fallen during the gas crisis.

Heat pumps reduce bills, reduce exposure to international gas markets, and reduce air pollution. They are highly compatible with the millions of homes built in recent decades – and they work effectively for older homes, with high temperature models also entering the market. [6] Octopus and British Gas are now both offering to install heat pumps from £3,000, similar to the cost of a new gas boiler. [7]

The renewables industry has recently expressed concern that the Government’s recent tax changes and decision not to reciprocate tax breaks provided to North Sea drillers will slow deployment, as will planning regulations. [8] There is now greater competition for net zero investment, with the US Inflation Reduction Act and the European Union’s response, the Net Zero Industrial Act.

Businesses involved in the UK’s net zero economy are adding more than £70bn GVA according to analysis commissioned by ECIU. [9]