Why the ‘Energy Security Strategy’ won’t work

07 April, 2022

Nick Eyre

Reading time: 5 minutes

The Prime Minister’s strategy will boost UK energy supply, but any effective strategy also has to address how much energy we use and how to reduce it.

The Prime Minister’s ‘Energy Security Strategy’ will not work. It’s a strategy for boosting UK energy supply. Of course, the UK needs a plan for where our energy should come from. But any effective strategy also has to address how much energy we use and how to reduce it. Indeed, it should start from there. A “supply strategy” for energy is like a “medicines strategy” for health – it misses the key options.

This is not an academic debating point. Just building more supply has never worked as an energy strategy. And it does not need to – reducing demand works. Over the last 30 years, energy efficiency improvement has contributed more to our energy security than the nuclear and renewables programme combined. And the potential for reducing energy demand further remains very large. This week’s IPCC report confirms such changes can be very large and need to be central to an effective climate policy. CREDS research shows that we could halve UK energy demand by 2050, whilst still improving our quality of life.

Electrifying transport and heating alone will achieve a lot, as electric vehicles and heat pumps are many times more efficient than the fossil fuel technologies they replace. And our buildings could and should be better insulated. But the message from recent research is more fundamental – we need also to think more broadly about what we use energy for. Reducing car use can play a major role, as can the reuse and substitution of energy intensive materials.

Time and money

Of course, much of this will require investment and take time. But that is even more true of the measures set out in the PM’s strategy. Changes in the way that we use energy are generally quicker than major supply side investments, especially options like new nuclear reactors, which are the most expensive option and cannot make any contribution for well over a decade. Saving energy provides more diverse, resilient, cleaner and cheaper options. The proposed support for heat pump innovation is only a tiny fraction of what is required.

Sadly, the ‘strategy’ continues a trend of going in the wrong direction. Energy saving policies have been dismantled over the last decade. Vehicle efficiency improvements have stalled and new building standards delayed. In David Cameron’s haste to ‘cut the green crap’ in 2012, building energy saving programmes were reduced by 90%. This outcome was not an unfortunate accident; it was a deliberate choice by a minister, who then went to work for Russian oligarch. The result is that a typical household uses 10% more energy for space heating and now pays £100 per year more for household energy than if previous programmes had been continued.

Some households have high car dependency and therefore will be doubly disadvantaged. But most people on low incomes do not drive long distances, and so rising transport fuel costs are less regressive. The recent reduction in road fuel duty is a diversion from the key problem that, unless urgent action is taken, rising household fuel bills will mean people die from living in cold homes next winter.

Short-term as well as long-term planning

In the long term, a plan for energy demand reduction can contribute to energy security, affordability and climate policy goals. Only Government can deliver that. It should bring forward the promised policy framework for heat decarbonisation; it should begin a major investment in building retrofit skills; and restore building energy efficiency programmes to pre-2012 levels.

None of this is a short-term panacea for dealing with the impacts of Putin’s invasion of Ukraine on gas supplies. It is not possible to revolutionise the thermal performance of UK housing quickly. But we are in an immediate energy security and affordability crisis. So we need a short-term plan as well, for the months before the huge rise in bills next winter. New supply investment can achieve nothing on these timescales. But evidence from around the world shows that saving energy can, provided people recognise it as a collective challenge.

Britain’s low-income households need an emergency programme to deliver basic energy efficiency measures in the worst housing, through targeted funding for local authorities and charities already working on fuel poverty. At the same time, there should be investment to encourage cycling and walking, as well as funding to protect and expand public transport as it recovers from the pandemic. Both should be supported by a programme of public information and advice. We can learn from the pandemic. If faced with a national crisis and provided with support, people will respond.

The Government has already taken some steps, both to reduce Council Tax and to require part of energy bills to be deferred to later years. These are useful, but inadequate. The Council Tax reduction is small and the energy bill deferral was predicated on the crisis being short term, which now seems highly unlikely. Without targeted support for low-income households, through benefits, much more serious fuel poverty impacts seem certain.

If we rely on market forces alone to drive energy savings, those who will respond will be predominantly on low incomes, often living in cold homes already. If we are in a ‘national emergency’, the response needs to fall on the broader shoulders. Households with more resources and living at comfortable temperatures can reduce demand more. And, if more resources are needed for energy saving programmes and supporting low-income households, the companies making huge profits due to Putin’ s invasion are an obvious first port of call.

Banner photo credit: Rex Pickar on Unsplash