ECIU: Potential £8 Billion Burden on Households from Net Zero Policy Rollback
In a surprising turn of events, the Energy and Climate Intelligence Unit (ECIU) has conducted a rapid analysis of the recent climate policy shifts unveiled by Prime Minister Rishi Sunak. These changes, which have sparked widespread controversy, have the potential to inflict a staggering financial burden on British households over the next decade, amounting to a jaw-dropping £8 billion.
This fresh analysis, released late last night by the ECIU, dives deep into the repercussions of abandoning energy efficiency regulations and reevaluating the timeline for phasing out gas boilers by 2035. The implications are nothing short of astonishing.
According to the ECIU's findings, if these policy alterations result in the sustained demand for fossil gas within the UK, the collective expenditure by billpayers could skyrocket by an astounding £150 billion over ten years. This would be a monumental deviation from a scenario where the government had steadfastly pursued ambitious measures to curtail gas consumption.
In a warning that sends shivers down the spine, the ECIU emphasizes that the costs to the NHS stemming from inefficient housing could swell to a staggering £1.2 billion annually, equating to an eye-popping £12 billion over the next decade. The crux of the matter lies in the urgent need to overhaul the UK's notoriously cold and damp housing stock while reducing reliance on costly fossil fuels.
Adding to this whirlwind of policy changes, Rishi Sunak's announcement that the phase-out of internal combustion engine cars and vans would be pushed back to 2035 left many scratching. Furthermore, the government's decision to scrap energy efficiency standards for rented homes by 2025 raised eyebrows nationwide.
The Prime Minister also unveiled plans to exempt the most financially challenged households from the 2035 fossil gas boiler phase-out and abolish the ban on new gas boilers in off-grid homes from 2026 onward. While Sunak argued that these reversals would ease household financial burdens, Jess Ralston, an energy analyst at ECIU, vehemently disagreed.
Sunak argued the policy U-turn would reduce cost pressures on households and give citizens' more time to prepare for the transition to clean technologies.
But Jess Ralston, energy analyst at ECIU, said the implication that any policy changes would reduce the cost of living in the UK was "untrue."
"The PM has sided with landlords over renters, putting their energy bills and cost of living up by ducking the improvement of rules on energy efficiency," she said. "That doesn't make any sense when excess cold in homes costs the NHS £1.2bn per year, and renters are amongst those with the lowest incomes. As the North Sea declines, if the UK fails to shift to heat pumps, we'll end up reliant on importing ever larger quantities of foreign gas."
"This looks chaotic, and not the way long-term policy should be made around important issues, with emergency cabinet meetings and investors spooked," she added.
In a separate analysis, the ECIU predicted that scrapping EV sales targets in the Zero Emission Vehicle (ZEV) mandate, slated to take effect next year, could saddle motorists with an additional £6 billion in costs until 2035. The UK's car manufacturing sector also faces the grim prospect of losing £13 billion in exports if it falls behind other major economies in meeting ZEV targets.
The ECIU draws attention to previous research revealing that green policy rollbacks in the 2010s ultimately cost households a staggering £28 billion in 2022, coinciding with the peak of the fossil gas crisis. The UK's heavy reliance on fossil fuels for heating emerged as a pivotal factor in the government's energy bill support package ballooning to a mind-boggling £40 billion.
Peering into the future, the ECIU forecasts that policy shifts and setbacks in 2023 alone could exact a minimum toll of £13 billion over the next decade. This figure could escalate even further if fossil gas prices experience a resurgence. Break it down, and we're looking at £1 billion for each year's delay in offshore wind farms, primarily due to the last state-backed auction's inability to attract offshore wind developers. An additional £12 billion is projected to be spent by 2030, primarily attributed to the perceived lack of ambition in the government's two flagship energy efficiency grant schemes, namely the Energy Company Obligation and the Great British Insulation Scheme.
These astonishing findings cast a shadow of uncertainty over the future of energy policy in the UK, leaving many wondering about the implications for their wallets and the environment.