Ministers’ plans to remove policy costs from electricity bills must take place faster than currently proposed, an analyst from the Climate Change Committee (CCC) has told MPs.
The government promised to shift levies for policies such as the Energy Company Obligation onto to gas bills over the next decade in its Net Zero Strategy published last month.
Marcus Shepheard, lead analyst for residential buildings at the CCC, said at a hearing of the Business, Energy and Industrial Strategy (BEIS) Committee this morning that this transfer is a “necessary condition” for helping wean customers off gas heating by removing a “market distortion”.
However, the timetable laid out in the Next Zero Strategy is “too slow”, he said: “This cannot be done over a decade: it needs to happen faster.”
Shepheard also warned that the government’s “paramount concern” should be managing the home heating transition of the UK’s 2 million fuel poor households, which currently use gas.
He said the “vast majority” of such households could lose out financially if it happens in the near term: “I don’t think currently there are adequate plans for this and the government is falling short.”
Juliet Phillips, senior policy advisor at climate consultancy E3G, backed up Shepheard’s concerns about the timetable.
She said: “This too slow. We need a more rapid timeline.”
Shepheard also expressed concerns about the government’s reliance on a mandate, which stipulates that boiler manufacturers must ensure a proportion the devices they sell are heat pumps, to stimulate the growth of low-carbon heating technology: “The market-based approach brings delivery risks and will need to be carefully managed.
“There is a great expectation that the market-based mechanism will smooth over a lot of these bumps. If deployed well, it is potentially promising although it is quite a novel approach.”
“The risk is you have lots of moving parts that need to move quite quickly,” he said, namechecking the obligation on manufacturers and the ‘soft’ boiler phase out amongst the proposed measures that must be co-ordinated.
And the government may have to extend “further” funding “carrots” for consumers if low carbon heating technologies do not drop to the same level as gas boilers, he added: “There will have to be a watching brief and the government should be ready to put in more support and weight over time.”
The BEIS Committee was conducting the final session of its inquiry into the government’s Heat and Buildings Strategy that was released alongside its Net Zero Strategy.