The crisis caused by the war in Ukraine has prompted the Government to rejig its energy policy in order to increase energy security by reducing the need for imported fuel. This rethink could have been an opportunity to move away from the use of gas as our base load fuel and stick to our commitments to achieving NZ by 2050 by not licensing any more oil and gas fields or fracking. 

The Government could have prioritised increasing onshore wind and solar farms which are the quickest and cheapest ways to increase our low carbon energy supply to the promised 95% by 2030, backed up by a campaign to insulate our poor housing stock to reduce the demand for gas. Although planning rules have been made less restrictive in the strategy, onshore wind and solar will still require unanimous consent, unlike roads and incinerators; it has also been reported that more ambitious plans were watered down the night before the strategy was released.

The Government has instead decided to launch a new licensing round for oil and gas fields in the autumn. It will take years for these to come onstream and unless rules are changed the fuel will be sold on the international market as now. This  announcement came 3 days after the latest IPCC report had warned that we have reached the now or never moment and have to leave the oil and gas in the ground.

The Climate Change Committee stated that….“Recognising the difficulties in implementing effective policy quickly, it is still disappointing not to see more on energy efficiency and on supporting households to make changes that can cut their energy bills now. Government has reiterated its commitment to do more and we look forward to seeing details in the coming months” – here’s hoping! 

Micharl Lewis, CEO E.ON UK was even more forthright….. “Energy efficiency is the fabled ‘silver bullet’ for a future energy system: it cuts bills and carbon emissions today, it creates jobs and it reduces our reliance on foreign gas. By abandoning any extra commitment to helping people to improve their homes, today’s announcement condemns thousands more customers to living in cold and draughty homes, wasting energy and paying more than they need to for their heating”. 

Now could have been the moment for the Government to look again at the case for Climate Income which it had acknowledged in The Future of UK Carbon Pricing (2020), ideally with the ability to borrow against future dividend payments for investments in energy efficiency and retrofitting.

 Advocates of the approach highlight that a well-designed scheme would have social and environmental benefits, equitably distributing the revenues and stimulating investment in low carbon technologies……..emissions to be reduced in a cost effective and technology-neutral way, while mobilising the private sector to invest in emissions reduction technologies and measures.