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The government risks alienating the public if costs and benefits of the energy transition are not shared more equally.

In its 2018 Annual Review of Energy Policy [1], published today, the UK Energy Research Centre [2] praises government for progress so far in reducing greenhouse gas emissions. But action needs to go further and faster – for example, by demonstrating low carbon heat options at scale and accelerating the shift to cleaner vehicles.

At the same time, government needs to do much more to ensure that the UK energy transition is fairer. Despite the recent introduction of the energy price cap – protecting those who do not shop around for the cheapest energy tariffs – the energy sector still has a long way to go to ensure that the costs and benefits of a changing energy system are shared equitably. Particularly urgent action is needed to help vulnerable groups, including households in fuel poverty.

Improvements in energy efficiency and a reduction in energy use decreased household energy bills between 2008 and 2016, counteracting the effect of rising prices. However, UKERC research has also shown that schemes aimed at alleviating fuel poverty for low-income families and disabled people are insufficient [3]. A better, more targeted approach for low-income households is required.

Most emission reduction schemes are funded through levies on domestic energy bills, disproportionately affecting those most vulnerable to rising prices [4]. This is regressive as the poorest homes are in effect, self-funding schemes designed to help them. Energy efficiency investment for vulnerable households should instead be funded via general taxation.

To ensure widespread support for the energy transition, there also needs to be a greater focus on transparency and accountability. If left unaddressed, the current lack of transparency around costs and decision-making could undermine public support for the energy transition. The UK government should consider setting up a process similar to Scotland’s Just Transitions Commission to achieve this [5].

Professor Jim Watson, UKERC Director said:

“As we reach the end of 2018, the scorecard for UK energy policy is mixed. Optimists can point to rapid emissions reductions, cost falls in renewables and the centrality of clean energy within the Industrial Strategy.

Whilst this progress is welcome, the future is much more uncertain, with many looming policy gaps. Our research also shows just how important it is to pay attention to social and economic justice as these gaps are addressed.

Government needs a much more coherent strategy about the distribution of costs and benefits across different income groups and regions. The Scottish government’s new Just Transitions Commission offers one way to consider all these questions in an integrated way.”

Dr Christina Demski, UKERC Researcher, Cardiff University said:

“Issues of fairness and equitability are starting to be considered in energy policy, but there is a long way to go before they are addressed adequately.

We also need to find fairer and more socially acceptable ways to distribute costs arising from low-carbon energy system change.”

Dr Carolyn Snell, UKERC researcher, University of York said:

“We must ensure that households most vulnerable to fuel poverty are not left behind during changes to energy policy, people must be at the centre of fuel poverty policy. A fair energy transition will help to address these issues”

All summary recommendations:

• To ensure widespread support for the energy transition, there needs to be more focus on equity and justice. The UK government should consider setting up a process similar to Scotland’s Just Transitions Commission to achieve this.
• A better, more targeted approach to the energy needs of low-income households is required. Energy efficiency investment for these households should be funded via general taxation.
• We repeat our call for a heat and energy efficiency White Paper, and recommend that the Industrial Strategy mission to reduce building energy use is extended to existing buildings.
• Urgent large-scale trials of heat decarbonisation using hydrogen are required to understand whether it could be technically, economically and socially viable.
• A dashboard of indicators is needed to monitor gas security during the energy transition. The current one dimensional approach is not sufficient.
• Future electricity policy should build on the Electricity Market Reform policies that have worked well, and adapt them in the light of changes in technologies and costs.
• Changes in incentives for ‘black start’ and other ancillary services are necessary to ensure that the electricity system remains resilient as it changes.
• The target for phasing out conventionally fuelled vehicles is inadequate and does not fit with our emissions targets. The 2040 date should be brought forward and linked to accelerated investment in networks and charging.
• The Industrial Strategy needs to be strongly linked to market creation policies for low carbon technologies. Carbon capture and storage is in particular need of such policies to progress beyond its current holding pattern.
• Continued vigilance is required to mitigate any negative impacts of Brexit, particularly those that could affect integration with European energy markets.

ENDS

Notes to editor:

[1] Access the UKERC Review of Energy Policy here
[2] The UK Energy Research Centre (UKERC) carries out world-class, interdisciplinary research into sustainable future energy systems. Our whole systems research informs UK policy development and research strategy. UKERC is funded by The Research Councils Energy programme.
[3] Snell, C. et al. (2018) Justice in Energy Efficiency: a focus on fuel poor disabled people and families.
[4] Barrett, J., Owen, A. & Taylor P. (2018) Funding a low carbon energy system: A fairer approach? 
[5] See: https://www.gov.scot/groups/just-transition-commission/

For more information:
Jessica Bays, Head of Communications and Policy, UKERC, Tel: 07809 239 308
Email: j.bays@ukerc.ac.uk