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Industry expected more from Chancellor

Prominent industry stakeholders have welcomed announcements made by the Chancellor Jeremy Hunt in his spring budget announcements but most believe he could have gone further.

Martyn Bridges, director of technical services at Worcester Bosch, said: “We welcome the Chancellor’s three-month extension of the £2,500 price cap to reduce financial pressures on UK households.

“However, this is only a temporary measure. We were hoping to see a national grant scheme encouraging homeowners to insulate their properties and increase energy efficiency. A solution that would reduce energy usage and costs for the long-term.

“But given cost-of-living, homeowners will generally struggle to consider property improvements. This could also have a knock-on effect on our road to decarbonised home heating, as more efficient homes are suited for low carbon technology. We hope to see further commitment and measures from Government in supporting homeowners in increasing their EPC Ratings in the near future.”

Russell Dean, at Mitsubishi Electric residential product group director, said: “While today’s Budget will continue to build the foundation for achieving Net Zero, it could have gone further and built upon a commitment for the environment and to reach the target by 2050.

“Several measures announced in today’s Budget, including the extension of the CCA (Climate Change Agreement) Scheme and plans to invest in more domestic sources of energy, will support the transition towards more renewable and secure energy sources by 2050. The extension of the Energy Price Guarantee also provides much-needed help for families struggling with the ongoing cost-of-living crisis.

“However more long-term viable solutions for reaching Net Zero would have been welcomed in today’s statement.

“One measure that could lower energy prices further would be to decouple electricity from gas. While the price of electricity is pegged to the cost of gas, dependent upon its demand and supply, or potential for weaponisation as with the war in Ukraine, it will remain at risk of continued price hikes.

“As many businesses plan to remove gas from their buildings over the next few years, and heat pumps are recognised as the future of both commercial and home heating in Britain, it is also vital the government supports wider adoption of the technology. To encourage this, we would have liked to have seen a commitment to roll over unspent money from the Boiler Upgrade Scheme for families to insulate their homes and install the technology.

“As part of this, the government must also incentivise the training of more installers to fit heat pumps. Without this, the current target of installing 600,000 heat pumps per year by 2028 is in jeopardy.

“While today’s statement indicated promising signs of a transition towards renewable alternatives, encouraging greater investment in heat pumps, alongside more installer training, will help driver wider adoption of the technology as we look towards net zero.”

Paul Wrighton, director of sustainable infrastructure at Johnson Controls said: 'The chancellor’s action on energy – especially the extension of the Climate Change Agreement scheme - sends a relatively positive message, however the lack of clear ringfenced funding for wider energy efficiency measures is disappointing, especially at a time when cost pressures for households and businesses are going nowhere fast. What was missing from the budget was a bold fresh programme promoting heat pump uptake and other energy efficiency opportunities – heat pumps especially are a no brainer for cost, efficiency and sustainability compared with old gas boilers.

'The current boiler upgrade scheme has a budget of £150m each year for three years and aims to issue 30,000 vouchers annually. But in the first eight months of operation, only 9,888 grants were awarded. There’s a huge opportunity to put tension on the matter with a real nationwide programme to accelerate the change.

What we need to see now is the government supporting businesses in getting the technical assistance they need directly or via industry partnerships so they can identify opportunities to reduce emissions and develop a plan to transition to net zero. This could include providing access to experts in energy efficiency, renewable energy, or other relevant fields. It’s also important for the government to facilitate knowledge sharing and best practices by creating networks or platforms for businesses to share information and ideas about how to reduce emissions.”

Henk Van den Berg from heat pump manufacturer Daikin UK said: “Yet again this budget has ignored the clear case for shifting the Climate Change Levy’s focus away from electricity to gas, leaving low-carbon heating out in the cold. A heat pump will typically save 5-10% in annual running costs compared to a gas boiler, but the prospect of further savings is being strangled by what’s basically an outdated tax on the electricity that powers them.

“If heat pumps are to become mainstream and support the UK’s net zero ambition, more needs to be done to prevent us from falling behind other countries in the global green race. While financial support from the government is still in place, the benefits of heat pumps versus fossil fuel systems need to be properly communicated to encourage better uptake of the Boiler Upgrade Scheme, bringing forward a ban on installing gas boilers in new homes, and clearer training support for installers.”

Keith O’Connor, founder and chief executive of Fleetsolve said: “It’s critical that the Chancellor implements a series of measures that will enable and support UK business throughout their energy transition on the journey to net-zero. We are pleased to see the Spring Budget announcement of energy efficiency funding for swimming pools. This will provide a much needed shot in the arm to those community facilities particularly threatened by high energy costs. CHP is a tried and tested technology that generates lower-cost electricity and heat simultaneously in one highly efficient process. As such it is ideal for energy intensive environments like swimming pools that require a lot of heat. We are poised to help local authorities and leisure providers take advantage of this funding as soon as it becomes available.

We also welcome confirmation that the Climate Change Agreement (CCA) scheme will be extended for a further two years, and opened to new applicants. This, combined with the extension of the 50% First Year Allowance will free up some budget to invest in energy efficiency measures such as CHP, increasing resilience and allowing firms to operate more sustainably.

As a proud Wirral business, we are also pleased to see the announcement of 12 Investment Zones, one of which will be in the Liverpool City Region. We know first-hand that our vibrant region has huge potential for further growth, and we welcome funding that will catalyse this.”

Mike Foster, chief executive of the Energy and Utilities Alliance, said: “We warmly welcome the decision to extend the Energy Price Guarantee, helping to protect consumers against a 20 per cent increase from April. It’s good that the Chancellor has listened to us in the energy industry as well as consumer champions who have all backed this move.

“What we now need is the Chancellor to listen to industry again, by supporting the move towards a hydrogen economy, in the first instance by giving the green light to blending this zero carbon gas with natural gas into our networks. This helps us all decarbonise without spending huge sums ripping out our gas boilers.”

16 March 2023


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