After months of sharply rising energy prices, the war in Ukraine, and wider global insecurity, the Government’s Energy Security Strategy arrived in early April.
Energy security – in other words, reducing Britain’s dependence on foreign sources of energy and thus UK citizens’ exposure to volatile global energy prices – means increasing our domestic energy supply. One positive from the government’s new Strategy lays out important policy direction for new nuclear and wind power to achieve this.
However, energy security also means reducing our demand for energy. The lack of focus in the Strategy on reducing the energy we need to use in our homes and business buildings is a major gap. This is despite the fact that improving the efficiency of our buildings is one of the quickest ways to reduce escalating demand for energy and cut bills for struggling households and businesses – as well as meet the UK’s wider ambition to hit net zero by 2050.
Plans outlined within the Government’s Strategy to construct more nuclear reactors across the country are a long-term energy security solution, for example, and, in short, the Strategy is a supply-side plan for a demand-side problem. Indeed, the plans outlined within it will do little to address two of the biggest challenges we currently face: improving the energy efficiency of our homes and buildings and, subsequently, tackling rising energy costs. Crucially, this needs to involve retrofitting and decarbonising our building stock.
Making the case for retrofit
The UK’s housing stock currently accounts for over a third of the country’s natural gas consumption. However, instead of keeping our homes warm, much of this gas is going to waste due to the country’s chronically draughty buildings. We have one of the oldest housing stocks in Europe and over 50% of British homes lack proper insulation.
Add this to the fact that poor quality housing in England that leads to excess cold is costing the NHS £857 million a year, and it becomes apparent that we can’t afford not to have any clear and coherent national retrofit strategy.
Retrofitting homes is a fast and cost-effective way of reducing demand for natural gas and supporting the UK’s long-term energy security. The Government recognised the importance of properly insulating Britain’s housing stock in its Heat & Buildings Strategy published last year and in the Chancellor’s decision in March to abolish VAT on some domestic energy-saving materials. However, these announcements do not amount to the long-term, well-funded plan needed to improve the energy efficiency of the UK’s homes and buildings.
For individual homeowners, the recent sharp rise in gas prices makes investment in insulation more attractive, given the payback period for energy efficiency becomes shorter as energy prices rise. However, for many able to pay households, finding the funding upfront is a huge challenge, particularly amid the current cost-of-living crisis. Without fiscal support for these households, it’s unlikely that they will be able to take advantage of cuts to energy-saving measures.
The need to accelerate the rollout and investment into energy-saving measures also extends beyond housing. Small businesses could similarly reduce their heating bills if their buildings were more energy-efficient, but many are currently facing huge costs preventing them from doing so. The Government consulted in 2019 on a support programme for energy-efficient business buildings for small to medium-sized businesses but, discouragingly, no new policy plans have been announced.
Another key question for retrofitting the UK’s homes includes how we are going to train – or retrain – the hundreds of thousands of workers needed to install technologies, like heat pumps, that can enable homeowners to make the switch to low-carbon heating. There’s a major opportunity here for levelling up the UK with new jobs across all skill levels, needed in all communities in the country.
The Energy Security Strategy is not entirely silent on the need for more efficient buildings, however. The one welcome announcement in this area is a plan to improve advice to homeowners on what they can do to upgrade their homes. BRE strongly welcomes this development and believes it is vital that homeowners get expert, impartial advice on the steps they need to take.
Delaying the inevitable
We already know that if we are to reach net-zero by 2050, at some point, the 85% of British homes that use gas boilers will need to switch to a low carbon alternative, such as a heat pump, and we know that such technology can only work properly in well-insulated homes. In fact, it is already a key part of the Government’s roadmap to net zero. The current energy crisis could have been a powerful moment to apply some drive and urgency behind the rollout of this Strategy.
When you consider the benefits – ensuring that families can live in warm, affordable homes, boosting our economy, relieving the burden on our public services and wider society, and helping us meet our geopolitical and climate strategies – investing in a national retrofit strategy could be the most cost-effective solution to our problems.
There is no global security, energy or otherwise unless we get climate change under control. Improving the energy efficiency of our homes and buildings remains the best way of cutting the UK’s carbon emissions in the long-run, and lowering bills for millions of households in the coming years.