Energy Bill, Second Reading House of Lords, 19 July 2022

The LGA support the Government’s ambition to protect consumers from unfair pricing by enabling an extension of the price cap beyond 2023

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Key messages

  • Councils continue to play a crucial role in both delivering net zero and ensuring residents are supported through the cost-of-living crisis, guaranteeing more homes are energy efficient before winter would contribute to both of these objectives.
  • Regulation and support to critical technologies and innovations within this Bill are a positive step. As local leaders, councils are the ones who can join-up and mobilise partners to deliver net zero within villages, towns, and cities.
  • The LGA support the Government’s ambition to protect consumers from unfair pricing by enabling an extension of the price cap beyond 2023 and a move to regulate the heat networks sector. However, fuel poverty is increasing now, and energy price increases will further hit households in the months ahead. LGA analysis shows that three million ‘fuel poor’ households are having to pay an extra £250 per year on average on fuel bills 
  • because of poorly insulated homes. We need urgent efforts to decarbonise energy and insulate homes, focused on households in fuel poverty to ensure people can cope with the worsening cost of living crisis. 
  • By bringing forward these measures, councils can work to ensure every pound is invested to support the growth of local businesses, as well as the green skills and jobs needed to achieve net zero.
  • Councils want to work as partners with government, industry, and communities to tackle climate change. The position of councils as place-shapers, convenors of communities and local partners, asset-owners, problem solvers and significant purchasers puts them at the forefront of delivering real, tangible changes in the transition to net zero. 
  • We welcome Government’s continuing commitment to a Green Industrial Revolution but it is disappointing that Government has not recognised the role of fabric energy efficiency retrofit measures in decreasing energy demand. ‘Fabric first’ is the most cost-effective approach to reduce levels of fuel poverty and increasing energy security, network resilience and contribute to achieving the net zero ambition. 
  • We are pleased Government is seeking to attract billions in private investment and support tens of thousands of new, skilled jobs across the UK. Councils have a key role in the skills agenda at a local level, and many councils have identified green skills as a development area in their climate and ecological emergency declarations. 
  • We are also pleased that Government is considering taking measures to stimulate growth in the electric heat pump market with the aim of lowering the cost of heat pumps overtime. The transition from gas central heating to electric heat pumps must not place the concept of affordable warmth further out of the reach of the poorest in our society.    
  • The LGA commissioned a report with the National Housing Federation to identify hard to decarbonise homes. The report, which will be published on 20 July, identifies 220,000 homes that require in excess of £20,000 to increase fabric energy efficiency and install a heat pump. The report concludes that a 10 per cent reduction in heat pump costs would reduce the proportion of homes that need a hard to justify investment by 45 per cent.

Background

  • The LGA welcomes the publication of the Net Zero Strategy and the Heat and Buildings Strategy and the clear direction of travel for the decarbonisation of heat and buildings but consider that in the absence of a deliverable plan, the market will not be able to deliver the aims of the strategy in a timely and cost-effective way.
  • We welcome Government’s continuing commitment to a Green Industrial Revolution in the Energy Security Strategy but it’s disappointing that Government has not recognised the role of fabric energy efficiency retrofit measures in decreasing energy demand. ‘Fabric first’ is the most cost-effective approach to reduce levels of fuel poverty and increase energy security, network resilience, and contribute to achieving the net zero ambition.
  • Our overarching recommendation on climate change is for central Government to work with local Government and with business to establish a deliverable plan for achieving net zero in an affordable and inclusive way. The plan needs to take a systems approach to decarbonising heat and buildings, including decarbonising the energy supply, distribution capacity and planning, heat pump production (or other heat sources) and installation, materials, workforce, skills, alongside fabric energy efficiency market readiness, materials supply chain, workforce and communication and engagement.
  • Councils are well-placed to lead on local decarbonisation as place-shapers, convenors of communities and partners, delivery agents, commissioners, and owners of assets. Net zero can only be achieved with decarbonisation happening in every place across the country and this will require local leadership. Local government holds a wide range of important delivery powers and assets to decarbonise transport, buildings, waste, energy, nature, growth and more.
  • Councils will also need to play an increasingly predominant role in energy systems planning as the local planning authorities. Many councils also have plans to generate renewable energy and develop district heat networks utilising waste heat and therefore play a significant role in local area energy planning.

LGA Climate Change Sector Support Programme