The distribution of environmental levies between electricity and gas customers will come under the spotlight as part of a wider probe by MPs into the government’s heat and buildings strategy.
The House of Commons‘ Department for Business, Energy & Industrial Strategy (BEIS) committee announced yesterday (2 October) that it is holding an inquiry into the government’s Buildings and Heat Strategy, which is due to be published next month.
As part of this inquiry, the committee will examine the distribution of environmental levies across electricity, gas and fuel bills and whether they should be reviewed.
The inquiry will also look into what must be done to overcome the barriers to scaling up low-carbon heating technologies and how the costs of decarbonising heat can be distributed fairly across consumers, taxpayers, business and government, taking account of the fuel poor.
And the investigation will examine which technologies are most viable for delivering the decarbonised heating.
The committee is also seeking views on what should be the priorities and timescales for the government’s heat policy.
Announcing the inquiry, the committee’s chair Darren Jones said: “Achieving the government’s net zero target demands that we move to decarbonising all buildings by 2050. Decarbonising heat in homes will be central to this ambition but the scale, cost and complexity of the challenge is considerable, and it is vital that we begin to map out the steps which will be needed to move away from traditional gas boilers in homes across the country.
“The government has announced a heat strategy for later this year. As a committee, we will want to use our inquiry to scrutinise these plans and ensure we have a long-term policy for heat that gets to grips with the challenges ahead of us, the issues around cost and technology, and around protecting consumers and the fuel poor, and enables the UK to seize the potential for new jobs and industries while helping the UK meet its net zero commitments.”
Responding to the inquiry’s announcement, National Grid UK executive director Nicola Shaw said: “The decarbonisation of the economy over the next three decades will involve one of the biggest transformations ever seen in the UK, and the way homes and businesses are heated will play a huge part.
“There isn’t a simple solution, and we believe a mosaic of different low carbon heating solutions is likely to be the best way forward, recognising the different needs of a wide variety of heat consumers, types of homes and geographies. What’s clear is that the voices of consumers themselves must be heard and be a key part of any decision-making.”
The launch of the inquiry follows the publication two days ago of a new report by the Energy Efficiency Infrastructure Group (EEIG), which calls for the government to launch a ten-year mass programme to upgrade of the nation’s housing stock.
It says the government should use the £2 billion Green Homes Grant voucher scheme, which opened to applications this week, as the “launchpad” for a long-term programme for decarbonising homes.
The EEIG, which includes Energy UK in its membership, says the timeline for completing Green Homes Grant funded projects should be extended by at least six months with vouchers allocated by the end of next March.
The Treasury should then allocate a further £7.8 billion of public capital to BEIS for home energy efficiency investment over the four years to the end of this Parliament, thus delivering the government’s manifesto commitment of £9.2 billion for such work.
In addition, the EEIG says the Treasury should allocate £5.8 billion of public capital over the next four years towards supporting heat pumps deployment.
It says its proposed long-term energy efficiency and low carbon heat programme would support 190,000 jobs through to 2030.