How can the UK respond to the energy crisis?

Posted by Andi

With the increased energy price cap coming into play in April energy prices will soon reach a record high. The recent developments between Russia and Ukraine have led to further concerns over energy security are likely to push prices even higher at the next review of the price cap in Winter. How can the UK respond to this crisis?

Heat Pumps…

Heat pumps are the future of home heating without a doubt, especially with a ban on gas and oil boilers highly likely in the future. The latest government incentive for renewable heating, the Boiler Upgrade Scheme (BUS), is launching at the start of April. The Boiler Upgrade Scheme aims to incentivise and increase the deployment of Heat Pumps by providing upfront grants toward the cost of a Heat Pump for the consumer and hopefully cause an uplift in installs.

Vaillant Air Source Heat Pump

A significant shift to Heat Pumps and away from gas and oil boilers to decarbonise the UK’s heating industry is a vital step the UK needs to take in response to the energy crisis.

Energy Efficiency Improvements…

Homes in the UK are among the worst insulated in Europe and lose on average 3 degrees celsius after 5 hours compared with Germany which only loses 1 degrees celsius. This means homes in the UK have to have the heating on for longer, therefore, using more energy resulting in higher bills. The government should provide financial support to install or improve insulation in order to further reduce the country’s gas usage. 

Given that heat pumps work best in energy-efficient homes, many of the groups advocating for Heat Pump support are also backing increased funding for retrofitting.

Incentivise Public Transport…

The International Energy Agency (IEA) has recently published a plan for reducing oil demand which is all about reducing the use of road transport, through avoidance, electrification and increased efficiency measures. It urges governments to: 

  • Reduce speed limits on motorways by at least 10kmph (6.2mph)
  • Permit working from home for three days a week where possible
  • Encourage businesses to avoid business trips and, instead, make video calls
  • Ban cars from city centres on Sundays
  • Reduce ticket costs for public transport
  • Incentivise car sharing, walking, cycling and micro-mobility use
  • Promote efficiency improvements in logistics
  • Incentivise electric vehicle (EV) adoption

The IEA claims that if all advanced economies followed this plan then daily oil demand would be 2.7 million barrels lower than it currently is.

Windfall Tax on Oil and Gas Companies…

The massive increase in global oil and gas prices over the last year has resulted in dramatically increased earnings for oil and gas businesses. BP announced 2021 profits of £9.5bn (compared with a loss of £4.2bn the year before) and £14 billion for Shell (a four-fold increase). If these extra gains were taxed, the funds could be utilised to help low-income households lower their energy expenses. 

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