Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Accepted
EPC rating C requirement implementation faces ongoing cost-effectiveness and affordability debate.
Conclusion
We asked the Department about its plans to encourage consumers, industry and households to invest in greater energy efficiency. It told us that this is an important aspect of its strategy, which includes encouraging short-term demand flexibility from consumers to use less electricity at times of peak demand (by, for example, turning appliances off), as well as energy efficiency measures. The Department indicated that, for example, a requirement to ensure properties are at least EPC rating C has resulted in an increase in the homes achieving this standard from 14% in 2010 to 47% now. However, it told us the EPC rating C requirement depends on implementing it being cost-effective, affordable and practical to do so, and in the private rented sector there is an ongoing policy debate as to whether there is a maximum landlords should pay.68 60 Qq 35, 85 61 Department for Business, Energy & Industrial Strategy, Net Zero Strategy: Build Back Greener, 19 October 2021, page 78 62 Qq 81–83 63 C&AG’s Report para 1.13 64 Department for Business, Energy & Industrial Strategy, Net Zero Strategy: Build Back Greener, 19 October 2021, para 43 65 Q 28 66 HC Committee of Public Accounts, Regulation of energy suppliers, Twenty-Fifth Report of Session 2022–23, HC 41, November 2022 67 HC Committee of Public Accounts, Energy bills support, Fifty-eighth Report of Session 2022–23, HC 1074, June 2023 68 Q 38 Decarbonising the power sector 15
Government Response Summary
The government agrees with the committee's observation, stating the points raised are already implemented through existing strategies that use modelling scenarios and policies to encourage energy efficiency and consumer behavioural change, as detailed in their Carbon Budget Delivery Plan.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The department has modelled two potential scenarios to help estimate future power sector demands: the Net Zero Higher1 scenario, which explores the impact of using widespread electrification to support transport, heating, and industry decarbonisation; and the Net Zero Lower scenario, which explores the impact of using low-carbon hydrogen more extensively. Both scenarios take account of the underlying socioeconomic drivers of energy demand (such as GDP and population growth) and are consistent with the department’s Carbon Budgets and for achieving net zero emissions by 2050. Full details of the modelling and assumptions are in the technical annex to the Net Zero Strategy. 6.3 Through its range of sectoral models, the department then ensures it takes account of the policies and proposals required to achieve its net zero goals. While the policy mix in each scenario will depend on the net zero pathway taken, consumer choices and energy efficiency measures will play a significant role in achieving carbon savings. For instance, the high electrification scenario assumes high adoption of electric heat pumps and electric vehicles, while energy efficiency measures (such as insulation and more efficient appliances) reduce energy demand. The government’s policies aim to take into account consumer preferences and to follow natural replacement cycles, whilst supporting the infrastructure needed to make such transitions, and incentivising behavioural change. Full details are set out in the government's Carbon Budget Delivery Plan.