Moves to reduce the UK's gas demand could cut Russian imports by 80% this year and save households around £150, according to a new report.
The briefing, by climate change think tank E3G, lists steps the government could take immediately to protect Brits from the unfolding energy crisis. Reducing our energy demand, it said, has never been more essential to the UK’s national, energy and climate security.
The report urges the government to cut VAT on insulation, and make changes on stamp duty, among other suggestions. E3G wants the government to use the Spring Statement and the energy supply strategy it is due to announce to cut household energy use through existing policies and mechanisms.
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Here are some of the steps those in charge of the country could take, according to the report:
Reduce Stamp Duty
An energy-saving stamp duty incentive should be implemented, where more energy efficient homes pay a lower stamp duty rate. Home buyers would be "incentivised to improve their home's energy performance", with a rebate that could be claimed within the first two years after buying.
Use existing funding schemes
E3G said the government has several designed and functioning energy efficiency schemes, some of which have now been in place for two years, and through which it could deliver a strategic surge in investment.
These are: the Local Authority Delivery Scheme, the Home Upgrade Grant, and the Public Sector and Social Housing Decarbonisation Funds, collectively worth just under £3.4bn from 2022 to 2025.
The government, it said, should "immediately expand the money available to reduce gas demand in homes by fulfilling their manifesto pledges with £1.4bn through the Home Upgrade Grant, £200m through the Social Housing Decarbonisation Fund, and £400m through the Public Sector Decarbonisation Fund."
The relevant legislation has not yet been brought to Parliament, despite the new phase being due to start in April.
Energy efficient appliances
By incentivising the use of efficient appliances across items such as washing machines, light bulbs and TVs, household bills could be reduced across the board.
The costs of this should be borne by the Exchequer, E3G said.
'Simple, Sensible and Safe'
Here the government is urged to publicise how people can take "safe and sensible steps" to reduce heating energy demand, while not compromising on warmth or comfort.
For example, E3G said, turning down the flow temperature on all condensing boilers could save17TWh in demand and save households between 6 and 8% of their annual costs. This means changing the temperature of the water sent to radiators, not changing the room temperature itself, and is a very simple step that millions of households will be able to take.
Similarly, turning the thermostat down by one degree can save around 10% on annual bills.
Extend the boiler upgrade scheme
With gas prices rising and likely to stay high, many more households will want to replace their gas boilers with electric heat pumps.
The government put in place grant support to support households making the switch, with grants of £5000 available from April. The scheme will be administered by Ofgem, and installers rather than customers will be responsible for claiming the grant.
However, with only £450m allocated until 2025 the Boiler Upgrade Scheme will support a maximum of 90,000 heat pump installations in total. This is well short of the government’s own delivery targets which call for the heat pump market to scale to deliver at least 600,000 installations per year by 2028.
Net-zero ready new builds
The government’s new Future Homes Standard is due to come into force from 2025. It will raise the efficiency standards that new homes must meet and make low carbon heating via a heat pump the standard.
But in the context of the energy crisis, E3G said, 2025 is too long to wait. The report continued: "The government should do everything it can to limit the number of new households who will be left with high gas bills and boilers they will need to replace."
Remove the tax penalties that currently hold back energy saving upgrades
Removing VAT from energy efficiency upgrades would "give the strongest signal that the government is serious about helping households and businesses reduce their gas demand and energy bills", E3G said.
Remove legacy policy costs from bills
Consumers would see lower bills if legacy policy costs - which fall disproportionately on electricity bills - were removed.
Offer training to ensure the supply chain is ready to help households get off gas
Installing energy efficiency measures and replacing gas boilers with heat pumps requires skilled labour – the Heat Pump Association estimates 50,000 trained installers will be needed by 2030, up from around 2000 today. The UK will struggle to reduce its dependence on expensive gas if the supply chain is not ready to deliver the necessary home and heating upgrades to enable the transition.
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