UK’s slower-than-expected electrification exposes households to fossil fuel price shocks, the country’s Climate Change Committee (CCC) said on Wednesday, urging faster electrification and removal of policy costs to lower the energy bills.
While the uptake of electric vehicles (EVs) has accelerated and the latest renewable energy auctions awarded record new capacity, progress in heat pump installations has slowed, the independent panel said in its annual report.
The CCC’s annual assessment warned that “households are facing higher energy bills because the UK is not electrifying fast enough.”
“This is leaving people exposed to fossil fuel price shocks and puts later carbon budgets at risk. The government needs a more ambitious plan to electrify these key parts of the economy, including further action to reduce the cost of electricity,” the panel of experts said.
The committee recommended the removal of remaining policy costs from electricity bills.
In the November budget, the UK government said that the Energy Company Obligation (ECO) and Renewables Obligation (RO) schemes that were funded through costs to the bill, would change from April 1, 2026. ECO funding ended from March 31, 2026, while 75% of renewables costs will now be funded from general taxation.
CCC now urges the removal of all policy costs from the bills.
The UK also needs to support a more rapid transition to EVs and accelerate the installation of heat pumps. Industrial electrification also needs to happen faster, for example by the UK speeding up grid connections to remove barriers for businesses electrifying operations, according to the panel.
“At this moment of political uncertainty, any weakening of current positions risks slowing these transitions, undermining investment and the long-term consistency businesses need,” said Nigel Topping, Chair of the Climate Change Committee.
The UK faces political uncertainty this summer after Labour Prime Minister, Sir Keir Starmer, resigned on Monday.
The new PM and government, expected to be in place by September, face thorny energy issues, including how to lower energy bills to ease the cost-of-living crisis, and whether to continue Starmer’s policy to sideline the oil and gas resources in the UK North Sea.
By Tsvetana Paraskova for Oilprice.com
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