Source: ECIU
New research published by the Energy and Climate Intelligence Unit (ECIU) has sought to quantify the monetary impact climate change and delayed progress towards net zero may have had on UK households in 2022. The study looked at the impact of a range of factors, including delays to home insulation improvement, slow adoption of EVs, and lack of progress on the installation of rooftop solar panels. Overall, households could have saved an estimated £1,750 on bills in 2022, and with an additional average of £400 extra in food bills seen in the past year, this figure may have risen to as much as £2,150 per household.
Looking specifically at two of the biggest contributors to consumer bills- rooftop solar for homes and electric vehicles (EVs), the report highlighted that circa 7,300 homes installed solar on their roofs each month between 2011 and 2021. Yet a peak figure of 55,000 homes per month was recorded more than a decade ago in November 2011. The ECIU estimates that if that peak continued, 7.3 million homes would today see £520 in annual savings. Looking at EVs, whilst the UK sits towards the front of the pack regarding uptake, just 1.8% of the UK’s total car fleet is electric. When we compare this with global leader Norway, the UK falls far behind their 19%. To combat this, The ECIU suggests policy changes, including zero-emission vehicle mandates for manufacturers and clearer subsidy schemes for drivers. In its research, the ECIU claims that a mid-sized electric car would have been £690 cheaper to run in 2022 than a comparable petrol vehicle.
With rising energy prices caused by Russia’s war with Ukraine, there have been fears across Europe around increased supply issues this winter and even a threat of power blackouts should the weather turn cold. In particular, gas prices have seen a significant rise over the past year, and demand has soared; given European reliance on gas supplies from Russia, this has proven concerning. All the while, Russia has squeezed supplies, and the EU has sought to wean itself from Russian gas. This has also led to European nations issuing public information campaigns to educate consumers on reducing energy demand. Whilst Germany introduced such campaigns at the start of the war in spring 2022, the UK has been reluctant due to fears it may be seen as ‘nannying’. As a result, official advice and campaigns were only started in December 2022.
the ECIU’s head of energy, Jess Ralston, said: “The International Monetary Fund (IMF) says that the UK is over-reliant on gas and that particular chicken has come home to roost this year with many households struggling to pay their bills.”[i] She added: “It’s clear that had investments in home insulation, onshore wind and other net-zero technologies been made earlier, homes could be thousands of pounds better off. Upfront investments are needed, but just as green levies on bills have built a renewable energy industry delivering cheap, clean electricity and the paybacks are measured in thousands of pounds for homes and billions for the UK as a whole.”[ii]
Yet the UK has seen recent reductions in energy use (EON recently reported that UK households have cut their gas and electricity use by more than 10% between October and the end of November 2022), however these reductions, when looking at gas specifically, fall short of those observed on the continent. According to a recently released electricity insights report by Imperial College London, which was commissioned by Drax: “Over the summer, Britain’s demand for gas was only 5–10% lower than average, and in September it was actually higher than in previous years (by 4%). In contrast, German gas demand was 17–33% lower, and there is a similar story across France, Italy and Spain: all the largest economies in Europe have reduced the amount of gas they consume much further than Britain. Once the mild weather of October came, the savings in all countries increased by a similar amount, leaving Britain still behind its neighbours.”[iii]
Note: the blue line shows the seasonal average for all end users except power generation over 10 years to 2020. The yellow line adjusts for weather, showing what demand would be with pre-crisis behaviour. The black line shows actual consumption.
Source: Drax
The research argues that any reduction in gas use in the UK late last year was, in fact, attributable to unseasonably warm weather rather than people adjusting their behaviour. The analysis showed that from September through to the end of November, Britain’s gas demand was just 0.3% lower than would have been expected pre-energy crisis, when accounting for weather anomalies[iv].
Lead author of the research, Dr Iain Staffell, said:
“The UK is an outlier on the world stage, showing no signs of reducing its appetite for gas during a time of dramatically higher prices.” He added: “Turning the thermostat down by just 1°C would save households up to £200 a year on their energy bills and save the UK from importing 50TWh of natural gas over the winter – cutting the cost of the government’s Energy Price Guarantee by £3bn.”[v]
In the ECIU report, a further point of discussion was around renewable energy and how slow progress in increasing homegrown renewable energy has weighed on household bills. This failure has also hampered efforts to move away from natural gas. In a further move to reduce reliance on the fossil fuel, the ECIU looked at the opportunity from cleantech, finding that if the UK government had brought forward its target to install 600,000 heat pumps each year from 2028 down to 2021, then these homes would have seen an average saving of £145 per year. The opportunity here lies in heat pumps being seen as a replacement for gas boilers for the majority of homes.
Dr Staffell mentions in Drax’s research: “If we had not invested in wind, solar and biomass over the past decade our energy bills would have been even higher, as would the risk of blackouts over winter. We need to turbocharge our investment in clean energy technologies to become Europe’s renewable electricity powerhouse, which will cut fuel bills at home and bring money into the economy by exporting power to our neighbouring countries.”[vi]
[i] Study: Stalled energy transition efforts adding £1,750 to average household bills in UK - edie
[ii] Ibid
[iii] Drax_Electric_Insights_Report_2022_Q3.pdf
[iv] Europe is cutting gas usage faster than UK - Drax Global
[v] Ibid
[vi] Study: Stalled energy transition efforts adding £1,750 to average household bills in UK - edie
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
