8th September 2022

Martin Evans, Sustainability Expert comments on the energy cost crisis and gives an alternative solutions report [he is available for interview / commentary]
  

Introduction – how to solve both residential energy cost crisis and climate change crisis

Energy costs for families have risen to the point that for many of our least well off cannot see how they can cope through the winter ahead.

The crisis that sits behind this is of course the climate change crisis that has suddenly fallen off the agenda, just when it should be the top priority.

The solution to the energy cost crisis will require billions of pounds of investment to ease the burden on the most needy and many of the solutions being proposed are not sufficiently targeted at this group and all fail to assist the move to reduce climate change, in many cases they will have the reverse effect.

Issues creating the problem

• Energy costs take no account of the carbon footprint of the fuel

• VAT is 20% on electricity which is the lowest carbon footprint and can drive much higher efficiency beyond that if used correctly, only 5% for gas and oil (the worst)

• Electricity pricing doesn’t allow the low-cost renewables to be promoted properly

• Energy costs are at their highest rates for the lowest users, for decades the high users worst polluters have been subsidized through the refusal to recognize the carbon costs.

Solutions

• Remove or at least equalise VAT on energy
• Add carbon tax to raise the same income as the current VAT but reflect the damage to the environment – using a good heat pump will create 1/10th of the CO2 of the same energy using gas or oil. Many of us can also generate via solar PV to further off-set this.
  
• Price energy in bands from lowest users at lowest cost, to highest users at highest cost, possibly use the current Council Tax bands to facilitate this. Costs rates would rise incrementally across the use profile. This reverses the trend of decades where Lord R-M pays less per kWh than a pensioner in a council flat, the industry has recently recognized this issue (ref Ovo’s Stephen Fitzpatrick).