Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps the Government is taking to ensure the affordability of domestic energy costs as the UK transitions to a carbon neutral environment by 2050.

The transition to a clean, low carbon economy can help give us towns and cities with cleaner air and warmer homes with lower bills, while growing our economy and supporting new jobs in growing low carbon industries.

But as our economy changes, we must make sure that this growth is inclusive, benefits people right across the UK, supporting workers as industries change and ensuring the costs as well as the benefits are shared fairly, protecting consumers, workers and businesses. That is why we have announced that HM Treasury will be conducting a review into the costs of decarbonisation, including how to achieve this transition in a way that works for households, businesses and public finances, and the implications for UK competitiveness.

Energy efficiency will help keep costs down for consumers, while supporting the decarbonisation of the housing stock towards carbon targets. The annual running costs of a Band C rated home are £650 lower than the average Band E rated home. This is why we set out our aspiration in the Clean Growth Strategy that as many homes as possible should be EPC C Band C by 2035 where practical, cost effective and affordable. Low income and vulnerable households are supported in making energy efficiency improvements under the reformed Energy Company Obligation (ECO) scheme. Eligibility for the new scheme includes around 6.7 million low income households, an increase from around 4.7 million from the previous ECO2t scheme.

Domestic energy costs are also kept down through Ecodesign regulations which improve the sustainability and energy efficiency of energy-related products and appliances, and Energy Labelling regulations which allow consumers to choose the most energy efficient products. In 2020, the Government’s current estimates show that ecodesign and energy labelling requirements will save around £100 for the average dual-fuel household on their energy bills. Going forward, we will continue to support ambitious requirements which will further minimise energy bills for households and carbon emissions.

Additionally, smart meters are already reducing how much energy consumers use and saving them money. Smart meters will support the realisation of billions of pounds of benefits to Great Britain over the next few decades, through avoiding costly network upgrades, supporting more rapid integration of electric vehicles and renewable generation, and more efficient use of the national grid system. This will ultimately lower emissions, cut costs, and give households more control.

The Government is reviewing the future energy retail market jointly with Ofgem to ensure all consumers secure a fair deal for their energy and are appropriately safeguarded in the future.