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Powering Up Britain: Six key takeaways for drivers, homeowners and billpayers

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
30/03/2023

The Government has unveiled its blueprint for the future of energy – Powering Up Britain. Here are six key takeaways you need to know about.

The main buzzwords from Grant Shapps, secretary of state for energy security and net zero centre, as part of the Powering Up Britain blueprint include “diversify”, “decarbonise” and “domesticate” the UK’s energy production.

Within the Powering Up Britain, the Energy Security Plan and the Net Zero Growth Plan, there are a host of projects in the pipeline which aim to ensure that the country powers itself, that targets are set and met for the net zero ambition and tackle how future energy needs are shaped today.

Below are six of the key takeaways which will impact you whether you’re a car driver, homeowner or billpayer:

1) Electric vehicles

From 2024, the Government wants to see an increasing percentage of manufacturers’ new car and van sales at zero emission, as it looks to progress towards its “phase out commitments”.

Between 2030 and 2035, new cars and vans will only be able to be sold if they offer significant zero emission capability and the Government has published a final consultation on an “ambitious” zero emission vehicle mandate by 2040.

The Government said that in 2022, the UK had the second highest battery electric car sales in Europe, bringing the total number of plug-in vehicles on UK roads to over one million, of which 60% are battery electric. Meanwhile, the charging infrastructure has also grown, tripling from 10,300 devices in January 2019 to over 38,700 in March 2023. It announced more than £350m investment in the electric vehicle charging infrastructure.

2) Heat pumps

The Government said it wants to phase out all new and replacement natural gas boilers by 2035 at the latest as it wants “people’s homes heated by British electricity, not imported gas”.

“We want to make it as cheap to buy and run a heat pump as a gas boiler by extending the Boiler Upgrade Scheme by three years (until 2028), and by rebalancing the costs of electricity and gas.”

It said heat pumps are an important part of the future of heating as they are significantly more efficient than traditional boilers, use cleaner energy, and should reduce bills relative to fossil fuel heating.

As such, the £30m Heat Pump Investment Accelerator will mean heat pumps are manufactured in the UK “at a scale never seen before”, to support the Government’s commitment to install over 600,000 heat pumps a year by 2028.

3) Gas and electricity price rebalancing

As mentioned above, the Government said it wants to rebalance the costs of electricity and gas (gas is cheaper than electricity).

“We know that, in the long run, green products are more efficient and cheaper. However, current distortions in electricity and gas prices do not always make this the case. We want to make it easier for consumers to make the switch to green products by rebalancing prices between electricity and gas to remove these distortions,” the Government said. This is expected by the end of 2024.

“Rebalancing will generate the clear short-term price signal necessary to shift both households and businesses to lower-carbon, more energy efficient technologies like heat pumps. This is vital to meet Government’s existing decarbonisation commitments, including our goal of 600,000 heat pumps installed per year by 2028”, it said.

4) Insulating the least efficient homes

As part of the Energy Company Obligation scheme – the Great British Insulation Scheme – around 300,000 of the country’s least energy efficient homes could save £300-£400 each year as part of a £1 billion energy efficiency programme by March 2026. This includes loft and cavity wall insulation, helping those in the lower council tax bands as well as those on the lowest incomes.

“We plan to lay legislation by the summer to take it forward. We remain committed to improving energy efficiency performance across different buildings. We are planning to consult by the end of this year on how to improve the energy efficiency of owner-occupied homes. We will publish a summary of responses to the consultation on improving the energy performance of privately rented homes and respond to the consultation on improving home energy performance through lenders,” the Government said.

5) Targeted energy bill support

The Government said it intends to move away from universal energy bill support and towards better targeted support for those most in need, as part of a new approach to consumer protection in energy markets from April 2024 onwards.

“The Government intends to consult on options for a new approach in summer 2023,” it said.

A number of charities and even the Ofgem CEO Jonathan Brearley has called for the introduction of a social energy tariff which is better targeted to those in need, rather than the population as a whole.

6) Future of the energy price cap

The price cap on default tariffs will ensure falling wholesale energy prices are passed onto households. But the Government said it is not a long-term solution, and the Government intends to consult on the future of price protections in summer 2023.

The energy price cap was introduced in 2019 and limits the amount that providers can charge customers on default or standard variable tariffs for unit and standing charges. It is not a cap on overall bills. It will be set at £3,280 from April.

However, as energy bills soared in the aftermath of the Russia Ukraine war, the price cap was superseded by the energy price guarantee which stands at £2,500 until the end of June.