UK Energy Efficiency Policy At Risk in Tory Net Zero Retreat

(Bloomberg) -- The energy industry is warning that efficiency targets are likely to be on the chopping block as Conservative ministers look for ways to delay or weaken green policies that lead to direct costs on consumers.

Trade body EnergyUK said that policies that incentivize more insulation in homes were among the most likely to be watered down. There are already signs of policy weakening with the government deciding on Tuesday to delay to proposals that require landlords to upgrade the energy efficiency of the homes they let out.

UK to Delay Green Homes Deadline for Landlords Amid Cost Squeeze

“Energy efficiency is going to be a major one where its complexity and disruption is mentioned,” Adam Berman, deputy director for Advocacy at EnergyUK said in an interview. “Given that we have the least energy efficient housing stock in Western Europe, it’s one of the reasons that people have been subject to such high energy bills.” 

Chancellor of the Exchequer Jeremy Hunt pledged £6 billion to insulate homes and upgrade boilers in his budget last year. However, ministers have tried several energy-efficiency programs over the past decade that haven’t achieved mass roll-out. The target is to reduce the UK’s final energy consumption from buildings and industry to 15% by 2030 vs 2021 levels.

Prime Minister Rishi Sunak has come under pressure to dilute the government’s climate policy after narrowly winning the Uxbridge and South Ruislip by-election, in which a major issue was Mayor of London Sadiq Khan’s controversial ULEZ vehicle emissions scheme.

Why London’s ULEZ Charge Became a Political Football: QuickTake

“We need to be really cautious about letting one local issue reverse all of the hard work and a lot of really carefully thought through policies,” Berman said referring to ULEZ. “The watering down of policy is one thing, but there has been a slowing in the pace of policy development and the ambition of government around net zero, which is the thing that we find concerning.”

The Department for Energy Security and Net Zero declined to comment.

Around £100 billion of private investment will be needed to develop new industries and low carbon technologies, according to the government’s net zero strategy published in April. Earlier this month businesses wrote to Sunak to warn that wavering over environmental policy would endanger this investment. 

“In the next two or three years, major companies are going to decide if they’re going to make investments in the UK, the EU or the US,” said Nathan Bennett, head of strategic communications at RenewableUK. “That investment could be a missed opportunity, and I’m not sure we’ve seen enough focus from government on it.”

(Adds quote in the final paragraph)

©2023 Bloomberg L.P.