The impacts of new energy tariffs will be explored using the UKENVI Computable General Equilibrium (CGE) economy-wide scenario simulation framework. The research will be split into two sub-projects:
The UK Government has indicated it intends to take a new approach to consumer protection, including considering social tariffs. A social tariff, a discounted rate for a targeted group, could reduce fuel poverty and improve distributional outcomes. However, if paid for via an increase in the standard tariff for some/all other users, it may draw some households outside the tariff threshold into fuel poverty and/or take spending power out of the economy among higher-income households. Scenarios will consider how different levels of social tariff may affect the extent of fuel poverty and impact on real disposable incomes.
This research will explore whether smart, flexible tariffs could deliver lower electricity prices for all users, and the impacts on the wider economy. Flexible tariffs may enable more efficient energy supply and demand, reducing system costs and bills. Scenarios will examine how different levels of flexibility savings impact on disposable incomes, household spending and jobs. Research will be codeveloped with our research on Operating a Highly Renewable and Largely Electrified Energy System, and will build upon National Grid’s Future Energy Scenarios, and UKERC’s work on Delivering a Sustainable and Equitable Heat Transition project, and engage with the EDRC Flexibility and Equity themes. Our Responsive Research will support economic parameters and input data.