UK Progressing in It's Battle Against Fuel Poverty and Mission For Clean Power

Domestic Rejuvenation 

In recent weeks, the UK renewable energy sector has taken steps to progress its battle against the fuel poverty crisis.

A £15 billion package has been allocated to spend on home upgrade technology – solar panels, batteries and heat pumps – over the next five years, with the hopes of lifting at least 1 million families out of fuel poverty. This increase from the previous £10 billion spent under the former Conservative government makes it the “biggest homes upgrade plan in British history”, according to current Energy Secretary, Ed Miliband.

The current take-up of heat pumps is in the tens of thousands. Ministers aim to drive this up to 450,000 installations annually, alongside 4.5 million of solar panels.

Supporting this, the “Future Homes and Buildings Standards” plan will mandate that all new homes are “zero-carbon ready”: fit energy saving technology and high-efficiency insulation.

Home installations alone will not be enough to quell the fuel poverty crisis. Hence, a record number of subsidy contracts for new solar power capacity has been awarded for 4.9 gigawatts of solar farms, alongside acceptances for 1.3 gigawatts of onshore wind and 21 megawatts of tidal.

The planned projects should be capable of supplying electricity to 16 million homes, all while protecting homes and businesses from gas price shocks due to their fixed pricing of £72.24 per MWh for onshore wind and £65.23 per MWh for solar. The cost of the tidal and offshore wind projects are higher, secured at £265 per MWh, and £91 per MWh respectively.

Changes for the renewables generators themselves are imminent, as a shift in indexation for the Renewables Obligation scheme from Retail Price Index (RPI) to the Consumer Price Index (CPI) is due to come into effect from 1^st April 2026. The swap to the lower inflation measure is estimated to save consumers roughly £80 million this year, and upwards of £250 million annually by 2030.

While benefitting the taxpayer is front of mind, there is concern that the move will damage investor confidence in the market, pushing up the cost of capital for new investments, and may have minimal-to-no effect on energy affordability, as the majority of the costs will be shifted to taxation. 

Nevertheless, the scheme is argued to be necessary, as the subsidy scheme's costs are expected to surpass £8 billion this year, and it is deemed less disruptive than the alternative: a price freeze. 

The combination of these changes is intended to reduce energy bills and put the UK on track to meet its ambition of reaching net carbon zero emissions by 2050. While the desired outcome of these measures is clear, what matters most is delivery.

Expanding Across the Atlantic

The UK is making active progress in its race for clean power, having struck its first energy deal with California this month.

Despite current turmoil in the global economy, UK Energy Secretary ED Miliband and California’s Democratic governor Gavin Newsom have signed a high-level agreement to boost technology sharing and mutual investment in green energy. 

With the UK’s “net-zero economy growing at a faster pace than GDP”, according to Miliband, and there being three times more clean energy jobs created than in any other industry in California, the UK is optimistic that the deal will drive export opportunities and support skilled jobs.

The two governments will also aid each other with protecting biodiversity and building resilience to extreme weather by sharing expertise.

The UK is not hesitating to grasp this deal, as British energy company Octopus has already confirmed $1 billion of new investments in Californian clean technology, and will also back two Californian carbon removal companies to transform degraded land into C02-absorbing, reforested areas.

These recent advancements in the UK energy sector are contributing to optimism in progressing both the fuel poverty crisis domestically, and the international quest for clean power.