Energy Crisis Commission Report: Protecting the UK from a future energy crisis

The Energy Crisis Commission, a high-level group of experts including representatives from Energy UK, CBI, Citizens Advice and National Energy Action, was established to review the impacts of the energy crisis on households and businesses and make recommendations to better equip the country to withstand possible future energy crises.

The Commission found that British households and businesses were hit harder than many other European countries because of high dependence on gas for heating and power generation. Ranked against EU countries, the UK is second most dependent on gas for heating, and joint fifth most dependent on gas for electricity.

Household billpayers ‘paid the price’ for the slow pace of improving leaky and damp housing stock, delays to new-build efficiency standards, and missed opportunities to build more renewables like onshore wind, according to the report.

The Commission also found that: 

• Poorly-targeted support schemes and the slow pace of improving home energy efficiency meant that the poorest households suffered, and pushed up the overall cost of the crisis for the UK, driving up national debt
• The impact on some vulnerable households and businesses has been ‘catastrophic’: nine in ten households cut back their energy use, the number of households in fuel poverty reached around 7.5 million, and GB households owe around £3.5 billion to energy companies
• Almost one in ten firms (8%) reported ceasing operations for some or all of their business and one in five (22%) said that they would draw on cash reserves in response to higher energy costs.
• The energy crisis drove the wider cost of living crisis and stifled economic growth
• Too little progress has been made since the start of the energy crisis to reduce the UK’s reliance on gas by insulating homes and scaling up the installation of heat pumps.

The Commission found that the UK needs to accelerate its low-carbon transition to improve its resilience to another energy crisis. It recommended the UK should: 

• Develop a clear strategy for shifting away from fossil fuels, particularly gas
• Increase public investment in home energy efficiency to improve millions of cold, damp, unhealthy homes;
• Introduce strengthened energy efficiency regulations for the private rented sector and implement the Future Homes Standard for better quality new builds;
• Accelerate rollout of electric heat pumps via the Clean Heat Market Mechanism and set out a plan for transitioning away from gas heating;
• Continue to accelerate progress towards clean power by scaling up diverse and flexible technology, being ambitious on renewables and improving grid infrastructure and storage capacity;
• Provide targeted and scale-up support for businesses and energy intensive industries to decarbonise;
• Pursue electricity market reform urgently

In addition, the Commission made recommendations to ensure better handling of a future crisis: 

• Develop an overarching plan to reduce the risk of future crises, including regular stress testing of the UK’s resilience to price shocks and disruption.

• Improve targeting of support for vulnerable households, including data sharing and matching, and urgently preparing for the need for support rising this winter;

• Introduce separate, targeted and scaled-up support for energy intensive industries and other businesses;

• Review regulation to protect consumers from supplier failure;

• Develop an overarching plan to reduce the risk of future crises, including regular stress testing of the UK’s resilience to price shocks and disruption.