Supply chain companies blast government ‘fudge’ on net zero and call for radical action on local heat planning, building standards, time of use tariffs

Companies supplying low-carbon energy technologies have called on government to be more ambitious in setting net-zero requirements for homes and businesses and provide a stable policy and regulatory framework to help industry deliver them. They say  ”Fudging the current regulatory framework is not enough and brings about gaps and uncertainty for the supply chain therefore limiting progress. Radical change is needed.”

In a letter to government and report published by trade body Beama, 24 electrical equipment and system manufacturers say that the technologies required to move to  decarbonisation of the building stock, transport and energy system are largely available today, but government action is needed to deploy them at scale. They say, “This level of market transition needs long-term regulatory and market clarity as it is essential to encourage and ensure private investment into the UK. The current policy and regulatory landscape is not delivering this certainty.”

The companies want government to reform building standards and enable green financing options including mortgages and energy as a service models, and they want ‘open-data’- backed locally driven energy and heat planning, which would include installers, to drive retrofit and promote economies of scale in the supply chain. 

Meanwhile, they say clear market frameworks for flexibility and consumer options such as time-of-use power tariffs are needed “as a matter of urgency”, combined with a carbon price for heat and hot water and a long- term trajectory for fuel subsidies. The companies call for more speed on the smart meter rollout. They want to see the RHI replaced with  a Capex-based incentive for low-carbon heating and hot water products.

and say, ”Government and industry now need to elevate the level of ambition in order to drive the dramatic step change needed to ensure the net- zero target can be met, through long-term policy and regulatory frameworks and market incentives.

Among the  reforms the companies seek are:

  • Reform building regulations in the next 18 months to drive efficiency in buildings and phase out high carbon fossil fuel technologies
  • Set a carbon price for heat
  • Reduce VAT rates for key low carbon technologies
  • Introduce urgent market reform to ensure the introduction of variable Time of Use Tariffs and retail market reform to drive the market for flexibility services in the UK
  • Open the market to new energy services to help consumer transition to low carbon energy technologies in UK homes and create appropriate financial incentives
  • Enable consistent spend and investment strategies for the supply chain delivering key energy system assets, alleviating existing spending pressures on network companies to enable net-zero

The signatory companies are GlenDimplex, Lucy Electric, Prysmian, Siemens, Schneider Electric, ABB, Geo, Legrand, Itron, Chameleon, Drayton, Sicame, Envirovent, Warmup, NuHeat, Titon, Vaillant, Eaton, Fundamentals, GE, MK, Gaia, Brush and Bowers Group.

Neil Stewart, chief executive of Glen Dimplex Heating and Ventilation, said,  ‘For manufacturers like Glen Dimplex Heating & Ventilation, energy costs and fuel factors are key to determining future investment decisions. The cost per kWh of energy is largely policy dependent, and with the current disparity in the price of gas Vs electricity it is hard to see how we will incentivise a market for electrification. A trajectory therefore needs to be set by government for these values and factors, so that manufacturers can make confident investment decisions and fulfil their role in delivering the solutions needed to achieve net zero.’

John Griffiths, chief executive of Lucy Electric, said: “Our business and the rest of the industry is working hard to manage the complex mix of new technologies, which is driving the decarbonisation of the UK’s electricity supply. But this must be supported by Government action. The industry needs a regulatory framework which reflects the Government’s green policy ambitions and enables innovation and the development of the marketplace, if we are to meet the UK’s Net Zero Emissions target.”

Dr Howard Porter, chief executive of BEAMA, said: “This is a cross party, cross industry, global coordination challenge at an unprecedented level – current markets for renewables and certain low carbon technologies essential for the energy transition, including storage, are struggling to gain the levels of investment needed to radically decarbonise our UK electricity infrastructure, buildings and transport system.  This is a great opportunity to be grasped by UK Government and drive growth in the UK market.”

Read a summary of the report  SUMMARY NET-ZERO BY DESIGN

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