Written by: Laura Hoy | Hargreaves Lansdown
- New PM Rishi Sunak’s decision to reinstate a fracking ban suggests he could be more environmentally friendly than Liz Truss.
- Sunak’s climate credentials are still to be fully determined, but there’s reason to believe he’ll maintain his pledges to support the UK’s transition to net zero.
- Energy efficiency is an important way that households and businesses can support the transition while also saving money.
- Studies show households could save up to £1,000 in energy bills by upgrading their insulation – a pledge Sunak made on the campaign trail
- We also need to increase renewables as a proportion of our overall energy mix—this will require investment from the government and corporates if it’s to move the needle.
- Sunak’s been vocal about his commitment to renewables but it remains to be seen exactly how he’ll back the initiative.
Laura Hoy, Equity and ESG Analyst at Hargreaves Lansdown:
“The further we kick the can down the road, the more expensive the energy transition will become. That’s because credible, actionable plans now mean there’s less chance of a harsh carbon tax to speed the transition in the future. A survey by Npower shows energy is the top concern for 77% of UK businesses. When asked how they’ll manage this risk, their top answer was through energy efficiency.
Notably, although they still believe in net zero, 93% were worried about funding this transition. This shows the cost to achieve net zero is only increasing.
Households are also caught between trying to lower their bills and doing what’s best for the planet. Efficiency is one way to hit both of these targets. Better insulated homes could shave £1,000 off energy bills, and government support - like the boiler upgrade scheme - would make it easier for households to access. It’s also something Rishi Sunak highlighted as a key tenet in the UK’s transition to net zero while campaigning last summer.
Renewables are another pillar in the transition toward net zero—but increasing their share in the energy mix doesn’t mean turning the oil taps off suddenly. Instead a more gradual transition is likely as investment in the technology helps to improve reliability.
Cutting energy bills and improving energy security will certainly be at the top of his list of priorities and investment in renewables should be part of that plan. However, what that will look like is unclear. The PM has said in the past he’s unwilling to relax strict planning laws that make it difficult to develop onshore wind projects, preferring instead to invest in offshore wind power generation. It’s also possible he could rethink the energy price cap to encourage investment in renewable generation.
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