TIMES RED BOX ARTICLE: Overdue reform can give Britain energy security and leave households better off
Putin’s invasion of Ukraine has demonstrated the crucial importance of energy sovereignty. Net Zero can offer a significant contribution to achieving energy independence in the UK, because it means generating more of our own energy from domestic sources that are not reliant on global oil and gas markets or hostile regimes. A win win, in fact, because Net Zero is also an inevitable direction for the planet as we seek to limit climate change and to protect and conserve valuable resources and habitats.
But it's not just about our energy security, nor about decarbonisation, vital as both are. The growth of new green industries in the UK, with the potential for global exports of technology and know-how, together with the need to phase out traditional fossil fuel use, offers great opportunities for green jobs and growth right across the UK. There is potential to revitalise UK manufacturing to support the growing supply chain in pursuing energy sovereignty.
As we make our way in the world outside the European Union, the UK’s Official Development Assistance and our soft power will be employed in exporting know-how, skills, and technologies to the rest of the world as it decarbonises and works towards reducing its carbon footprint.
In the UK, the Government must focus on both energy supply and demand.
The inquiry heard from witnesses on barriers to deploying energy projects in the UK, which include the planning system and delays connecting to the electricity grid. We also heard from energy efficiency experts on how to speed up the installation of energy efficiency measures, and the importance of ensuring that heating systems such as gas boilers and heat pumps operate at their greatest efficiency.
Witnesses told us that cutting energy demand is a key way for customers to reduce their energy bills. Another way is through increased use of smart meters where customers can get paid for restricting their energy use to a ‘cheap’ time of day. The potential for ‘demand flexibility’ will increase as more people buy electric vehicles and install electrically powered heat pump systems.
We also heard about the importance of the retail energy market itself in delivering affordable and stable household energy bills. A prerequisite for fixing the UK’s broken retail energy market is to reform the Energy Price Cap. The Energy Price Cap was well intentioned, but it is poorly focused and hugely expensive to the taxpayer.
The need for focused attention on the energy trilemma requires the establishment of a separate Department for Energy led by a Secretary of State with a clear mandate.
Changing the structure of BEIS is a significant step and is bound to cause some disruption and cost. The Committee is making this recommendation as a result of the significant evidence taken that vital decision making with regards to the energy priorities within the Department have stalled as a result of the enormous and unforeseen impact of COVID on departmental priorities.
A Conservative Government will always focus on incentivising and facilitating action by the private sector, together with regulating for high standards.
We recognise that stable policy and regulation are the cornerstone of a competitive energy market that works for customers and investors alike. That is why our proposals focus on modifying existing schemes and regulations. It is also why we are delighted to see the roll out of smart electricity tariffs, which offer customers the chance to save money by changing their behaviour or buying new smart products.
