Meeting social and environmental objectives is part of the role of energy networks, argues National Energy Action chiefe executive Adam Scorer
Over the next decade, the UK faces two massive challenges in energy policy. Both of these challenges need the policy and delivery plans to develop and align in ways that reinforce and complement each other.
Firstly, there are currently millions of households that are in fuel poverty - struggling to pay their energy bills and heat their homes to an acceptable standard. There are statutory targets in England, Wales and Scotland to ensure that more people can afford to keep themselves warm in winter, increasingly based around improving the energy efficiency of their homes.
At the same time, we also face the existential threat of climate change and, again, there are statutory targets to make the UK a net zero carbon economy by 2050. According to the Committee on Climate Change, one key aspect of meeting this target is to ensure that in the 2020s we improve our buildings so that they use as little energy as possible.
That decarbonisation of heat is both essential and hard is fast becoming a policy clichО. But its ubiquity does not make it any less true.
The role of networks and RIIO2 process is not the biggest item on the net zero agenda but contains a significant way in which policy and delivery plans can drive both fuel poverty eradication and decarbonisation of heat.
The Fuel Poor Network Extension Scheme (FPNES) is an obligation placed on gas networks to provide connections to fuel poor households at zero or low-cost. The scheme has already helped tens of thousands of households since it was introduced in 2015 and it is set to continue until 2026. But with the introduction of new, stretching carbon reduction targets, it will need to provide more flexibility on the affordability outcomes that can be secured during the lifetime of the next price review period, RIIO2, to reflect how we aim to eradicate fuel poverty in a net zero world.
Currently FPNES helps meet both of the targets. It allows fuel-poor households to heat their homes with gas, which is often significantly cheaper than their status quo and it often represents a carbon saving as natural gas causes fewer emissions than both oil and LPG which tend to be the fuels of choice in most off-gas grid homes.
While lower carbon sources of heating will of course be necessary, it must be a basic principle of a ‘just low-carbon transition’ that policy decisions do not leave vulnerable households with costly energy bills. Put simply it would not be fair to allow financially comfortable households to continue to use cheap gas while restricting access for those who are less well off.
That said, while FPNES is crucial in meeting our fuel poverty objectives, and justifiable for our climate objectives, the role of gas networks will need to move beyond just extending and maintaining pipes. The scheme should be a way of providing the best solution for any qualifying customer, including improving the energy efficiency of their homes, or helping to fund appropriate alternative heating methods like heat pumps (through combining with other government schemes such as the renewable heat incentive) or low-carbon heat networks. It will need, over time, to become a fuel poverty conversion scheme to provide better outcomes for the fuel poor and better alignment between fuel poverty and climate targets.
First published in the September 2019 isue of New Power Report