20
Energy bill support schemes prioritise cost reduction over encouraging demand efficiency
Conclusion
Government’s Net Zero Strategy expects a 40% to 60% increase in electricity demand by 2035 as more modes of transport and heating switch to electricity from fossil fuels.61 The Department told us it is expecting a corresponding increase in electricity generation from roughly 300TWh (a terawatt-hour is a unit of power) today to between 450TWh and 485TWh by 2035.62 Reducing peak electricity demand by encouraging households and businesses to be more efficient and flexible in how and when they use electricity reduces the maximum generating and network capacity required.63 The Net Zero Strategy states that promoting more ambitious and sustained demand reduction and energy efficiency measures to reduce overall power demand is key a factor in reducing the delivery risk of achieving net zero.64 However, recent energy bills support schemes, such as the Energy Price Guarantee, have prioritised reducing costs to consumers over encouraging reduced demand for energy.65 In November 2022 we recommended that the Department needed to ensure that administrative issues did not prevent support being provided to vulnerable households in a timely manner.66 We have recently reported that the Department introduced the Energy Price Guarantee support scheme quickly, within three weeks, but that wider reform of electricity markets (through the Review of Electricity Market Arrangements) would not be implemented until the mid-2020s.67
Government Response
A response document is linked to this report, dated 24 September 2023. Response attribution to this conclusion has not been verified. Read the response document.
Source
Committee
Public Accounts Committee
Inquiry
Decarbonising the power sector
Report
Fifty-Ninth Report - Decarbonising the power sector
21 Jun 2023
HC 1003
Addressee Bodies
HM Treasury
Timeline
Recommendation age
3.2 yrs
Report published
21 Jun 2023