National ‘war effort’ mobilisation needed to improve energy efficiency, install solar panels on new developments and set clear date to end oil and gas licensing, says committee

The Environmental Audit Committee sets out how the UK can accelerate the transition away from fossil fuels and secure energy supplies to tackle the energy affordability, security and sustainability crises facing the UK.

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The UK remains dependent on fossil fuels for 78% of its energy needs. As a result of Russia’s invasion of Ukraine, the UK has been exposed to the biggest global fossil fuel price shock since the 1970s. While the Government’s British Energy Security Strategy sets out ambitions for low-carbon electricity generation, there remain significant gaps.

Energy efficiency

The EAC is calling for a national mobilisation, or ‘war effort’, on energy efficiency to reduce household energy bills, cut climate-changing emissions and reduce reliance on fossil fuel imports. The Government’s Energy Price Guarantee has saved four million households from spending 10% of their income on energy this January, but Ministers missed a window of opportunity to accelerate energy efficiency installations in the warmer months of 2022.

The Chancellor’s recent announcements of an Energy Efficiency Taskforce and further energy efficiency investment from 2025 is welcome, but those in fuel poverty cannot afford three winters of delay. In England alone, over 13 million (or 59%) of homes in England are below EPC rated C. The number of UK energy efficiency installations peaked in 2012 at 2.3 million, yet in 2021, fewer than 100,000 upgrades were installed. The Committee is calling for at least one million energy efficiency installations a year by 2025, with an ambitious target of 2.5 million properties a year by the end of the decade.

Such an effort would require funding, including investment in people to deliver this step change. The new Energy Efficiency Taskforce should be directed to estimate the levels of funding and workforce skills which will be needed. A proportion of the Energy Profits Levy should be allocated immediately to help fund energy efficiency improvements.

Low-carbon energy

From offshore wind to solar energy, the proportion of the UK’s energy mix from renewables has been increasing substantially in recent years. The Committee welcomes the stretching targets the Government has set in its British Energy Security Strategy for low-carbon energy technologies like offshore wind and solar. But it is calling for greater focus on the potential of onshore wind to be rolled out rapidly in the short term, and tidal energy to contribute to the UK’s energy security baseload in the long term.

When the Government publishes its updated Net Zero Strategy in the Spring, ambitious targets for onshore wind and tidal energy would be vital to send the right demand signals to industry. Further, developers should be required to fit solar photovoltaics (PV) on homes to help achieve the Government’s ambition of 70GW of solar generating capacity by 2035.

Transitioning away from fossil fuels

Ending the UK’s reliance on fossil fuels will spur net zero and low-carbon energy generation, while reducing exposure to the energy price crisis that Russia’s war in Ukraine has provoked. The Committee heard from some witnesses that during this transition the UK must nevertheless continue to be able to access oil and gas to ensure that the country can continue to heat our homes, fuel our transport and generate a declining proportion of power. Other witnesses raised questions about whether licensing new oil and gas extraction is compatible with global efforts to limit temperature increases to 1.5 in line with the Paris Agreement.

To continue to demonstrate its international climate leadership, the Committee is calling for the Government to set a clear date for ending new oil and gas licensing rounds.

The MPs are also calling for faster action from the oil and gas sector to reduce its operational emissions produced during oil and gas extraction. The upstream emissions reduction targets currently set under the North Sea Transition Deal are not stretching enough. More rapid action will be required to reduce production emissions by 68% in line with the Government's commitments under the Paris Agreement. The Committee is calling on the North Sea Transition Authority (NSTA) to insist on the electrification of all new oil and gas projects in the 33rd licencing round and is also calling for routine flaring to be banned outright. NSTA should publish a league table of the best and worst performing companies, so that progress can be clearly monitored.

Furthermore, the Committee also recommends that the Department for Transport consults on measures to improve energy security, reduce oil demand and cut climate-changing emissions from transport.

Chair's comment

Environmental Audit Committee Chairman, Rt Hon Philip Dunne MP, said:

“Fossil fuels have helped keep our homes warm, power our cars and generate the majority of our electricity. Britain will continue to need to access fossil fuel supplies during the Net Zero transition. But Government should consult on setting an end date for licencing oil and gas from the North Sea. We can accelerate this transition by fully harnessing our abundant renewable energy resources, including tidal energy that can deliver a reliable year-round source of clean electricity, and by upgrading our energy inefficient buildings.

“The Government’s British Energy Security Strategy and its intervention to cap household energy prices should be praised. But there have been significant missed opportunities in recent months: the Government could have gone further and faster.

“To reduce the UK’s demand on fossil fuels, we must stop consuming more than we need. We must fix our leaky housing stock, which is a major contributor to greenhouse gas emissions, and wastes our constituents’ hard-earned cash: we must make homes warmer and retain heat for longer. The Government’s welcome new Energy Efficiency Taskforce can lead a national mobilisation to install energy efficiency upgrades, which we would like to see achieve an initial target of a million homes a year and more than double this by the end of the decade. To help fund this, the Government should funnel some of the revenue from the new Energy Profits Levy to crack on with the task at the earliest opportunity.

“The UK has enormous renewable energy potential and sectors such as offshore wind are booming. But more must be done to harness the opportunities which onshore wind, tidal and solar technologies provide. Developers should be required to fit solar panels on new homes as standard.

“Bold action is needed now. The last year, with Russia’s aggression in Europe choking energy supplies, has shown us just how vulnerable our over-reliance on imported fossil fuels can make us. The Committee has today set out a number of clear recommendations to drive real change: I hope the Government will act swiftly to implement them.”

The Committee has called for an update of the British Energy Security Strategy to be published in Spring 2023 indicating progress in reducing reliance on Russian imports, securing energy supplies and improving energy efficiency.