Energy-saving measures could boost UK economy by £7bn a year, study says | Energy

Insulating homes in Britain and installing heat pumps could benefit the economy by £7bn a year and create 140,000 new jobs by 2030, research shows.

But the application of these energy-saving measures is highly dependent on government policy, according to an analysis by Cambridge Econometrics commissioned by Greenpeace.

At the moment, ministers have few plans to encourage households to take up home insulation, although Chancellor Kwasi Kwarteng is expected to make an important announcement on Friday about the economy and energy crisis.

Through the boiler upgrade system, the government is offering households up to £5,000 for a heat pump, which is about half the cost. But the recording has been slow so far. To get the government incentive, households must meet a high standard of home insulation, which can cost from £7,000 to £15,000, and for which there is currently no government support for the average homeowner.

Doug Parr, chief scientist at Greenpeace UK, said: “The UK is in an economic, energy and climate crisis. Yet the government continues to shun the green home upgrades that offer a viable way out of this mess. It’s really astonishing.”

The forecast of the economic boost in the Cambridge Econometrics analysis, titled Economic Impacts of Decarbonising Heating in Residential Buildings, and published Tuesday by Greenpeace, comes mainly from savings in rising energy bills and the creation of green jobs, and the positive impact on the economy. rest of the economy frees up people’s spending.

There are also health and social benefits as people living in inadequately heated homes are more prone to illness, while lifting people out of fuel poverty improves their well-being and children’s educational prospects.

Parr said: “Greening homes in the UK at speed and scale will reduce energy consumption, bills and CO2 emissions. It will provide tens of millions of homes with warmer homes that are cheaper to run and help mitigate the catastrophic effects of the climate crisis. With the UK heading into recession, it could provide a nearly £7bn boost to the economy by the end of the decade.”

According to the modeling used in the report, by 2030 the government should spend £4.2bn on heat pump support and insulation, while households spend £9.3bn. In that year, households would also save £11 billion through lower heating costs.

According to the study, the government’s investment in a scheme to subsidize insulation and install heat pumps would total around £27.7 billion from 2022 to 2030.

Greenpeace urged Kwarteng to spend £7bn over the next two years on insulation and heat pump installations, and to provide greater support to people living in fuel poverty through a windfall tax on oil and gas companies of 70% of their gain.

Prime Minister Liz Truss has put a cap on energy bills at £2,500 a year for the average household, significantly lower than the £3,500 expected under the previous system of calculating energy price caps.

However, the freeze means the government will hand over an estimated £150bn to energy companies, which critics say is doing little to solve the root causes of the crisis, including the UK’s reliance on fossil fuels, leaky houses and barriers to renewable energy.

Insulation is the cheapest way to cut energy bills, experts have said repeatedly since Russia’s invasion of Ukraine spiked gas prices in February. But the government has since taken no steps to improve home insulation, much to the dismay of experts and green campaigners.

The insulation rate fell by 50% last year and there has been no government support for average households in England to install insulation since the abolition of the green house subsidy in March 2021, following the “failed” administration. Insulation rates have been low for the last ten years and the UK has continued to build new homes that use gas boilers, do not have solar panels and are not built to low carbon standards, so costly retrofitting will be required to reach the net zero target. greenhouse gas emissions by 2050.

The financial markets expect gas prices to remain high for at least another two years, with some predicting that this could take much longer.

Jon Stenning, head of environment at Cambridge Econometrics, said: “Improving the quality of the UK’s housing stock and switching to low-carbon heating technologies could cut household bills immediately and give the struggling household the choice between heating and eating this winter, while also driving greater economic growth and substantial long-term savings in CO2 emissions.”

Michael Lewis, the chief executive of the energy company E.ON UK, said: “We’ve seen the personal impact of people living in warmer, more comfortable homes – not just lower bills, but families living healthier lives on streets and estates. they are just nicer places to live.”

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