Policy change in the UK

In a recent ZCA insight, UK government softens net zero stance: Prime Minister Rishi Sunak announces ‘a new approach’ to climate change; we reported the various changes the UK government is making to its approach to net zero.

These were:

·         Changing internal combustion car sales phase out from 2030 to 2035.

·         Removing plans to ensure all privately rented buildings meet an EPC rating of C or better by 2028.

·         The 2025 gas boiler ban will be moved to 2035.

·         New oil and gas licences and onshore wind farms unbanned.

In this insight, we’ll look back at our catalogue and try to understand how these schemes will impact the initiatives we’ve previously told you about.

Changes to car sales bans could compound the firsthand market for EV’s current woes

Source: Unsplash

In April 2022, we reported on the UK government’s strategy to roll out eV charging infrastructure across the UK. Largely, industry reaction was overwhelmingly positive to this announcement and engagement with improving charging infrastructure across the country has been positive. One comment as part of the reaction, however, does stand out. Oliver Shaw, the former CEO of Kalibrate (in post at the time of this comment), said:

“Without the right data and analytics on location, demographics, and driver behaviour, we’ll be starting a journey without a solid roadmap. The net result could be wasted investment and an ineffective charging network. The opportunity to get this right is enormous, but only if we’re making informed decisions based on robust data and insights.”[i]

This raises the question of how the targets movement could impact the value of the data being used to drive the direction of investment. A delay to the ICE vehicle phase-out is, of course, likely to reduce how many consumers make the switch in the coming years, and this could mean that previous predictions of charging needs may not hold true, and as such, the investment may have come too early.

A second impact of the changes to vehicle bans relates to our more recent piece on the potential instability in the firsthand electric vehicle sales market. Within this insight, we reported on the views of Cox Automotive’s insight and strategies director:

“The fleet market is a huge opportunity for car makers wanting to sell EVs in volume,” “Already we can see the likes of new entrant BYD targeting it with £199-per-month deals and low deposits. But where are the incentives for private buyers? There’s no clear incentive for them to transition to EVs. There’s a big imbalance.”[ii] 

The movement of the phase-out of ICE sales could compound this issue as consumers may be less likely to purchase a new EV with the time scale shifted.

Changing EPC requirements may leave renters unable to decarbonise as quickly as they would like to

Energy Performance Certificates (EPCs) rate a building's energy efficiency from A (very efficient) to G (inefficient). They can estimate your property's carbon dioxide emissions as well as the cost of heating and lighting it. The energy efficiency rating that may be achieved if you make the suggested modifications is also detailed in an EPC, along with the most affordable options to raise the rating.[iii] Raising an EPC rating can be achieved through a range of measures. The most effective include:

·         Fitting energy-efficient light bulbs

·         Upgrading wall and loft insulation

·         Fitting double glazing

·         Installing a more efficient boiler

·         Insulating the hot water tank[iv]

ZCA looked at how these green measures could reduce bills and carbon emissions. The findings suggested that material green upgrades have a 6-fold greater impact on reducing emissions than behaviour change-related actions such as taking shorter showers and lowering boiler flow temperatures. The changes in government policy mean that now privately rented properties are not required to be upgraded to meet EPC and the behaviour changes suggested by government are unlikely to match the impact green upgrades would have had. Thus renters are potentially at a disadvantage in reducing their household emissions.

The lifting of the de facto ban on onshore wind could make energy cheaper

The UK government has partially eased rules that, in effect, ban new onshore wind farms in England. Michael Gove, the communities secretary, in September, introduced “new measures to allow local communities to back onshore wind power projects,” although he stressed this would “only apply in areas where developments have community support”.[v]

ZCA has discussed how the bidding process for renewable energy projects could reduce what consumers pay for their electricity. The process allows wind projects to be given the option to choose new long-term, fixed-price contracts at prices lower than the existing wholesale market price.[vi] By creating a regulatory environment that will foster greater use of onshore wind, more consumers will be able to benefit from the subsequently lower-cost electricity that the sites will produce.

References

[i] Edie- Is the new Electric Vehicle Infrastructure Strategy ambitious enough?

[ii] Cox Automotive- Fleets driving the UK EV market

[iii] Energy Savings Trust- Guide to Energy Performance Certificates

[iv] Alan Boswell Group- Landlord’s guide to improving EPC ratings

[v] Financial times- Changes to de facto ban on onshore wind farms in England not enough, say critics

[vi] Wind Power Monthly- UK wind industry backs call to decouple renewable electricity from gas

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