CBI: Prioritise energy efficiency over gas bill bailouts

Opening the business organisation’s annual Net-Zero Conference, he outlined his strategy to “simultaneously reduce energy bills” at a time of high inflation and “spur economic growth”, adding that people must not be left “at the mercy of global oil and gas prices”. 

The best solution, he believes, is to give people the tools to manage their demand via energy efficiency measures like home insulation. He also urged the government to scrap its “fits and start approach” to energy efficiency - and instead find a long-term solution. 

In addition to this, the CBI estimates the UK needs to invest around £5.2bn every year up until 2035 to make homes more energy efficient. This financing should be split with around £1.7bn of public investment a year, and £3.5bn in private finance - made up of landlords and homeowners. 

Danker added: “That sounds expensive. But higher energy bills and resulting inflation just cost the chancellor £22bn’s worth of support in the spring; £15bn in May; and we haven’t reached October yet. 

“Do we want a new normal of energy efficiency or a new normal of billion-pound bailouts every quarter?”

In order to tackle this, the CBI recommended “urgent” government action on three fronts. 

Firstly it called for it to legislate for the fourth Energy Company Obligation (ECO) scheme - which helps households with energy efficiency improvements - before the summer recess. As part of this, it has been suggested the government commits £1bn annual funding for energy efficiency retrofits - creating a new ECO+ scheme, which helps more households kickstart their plans to fit insulation immediately. 

In addition to this, it says delays to green infrastructure need to be unblocked, doing this by publishing an accelerated planning regime for offshore wind projects to cut delivery time in half. The CBI also wants reforms to the onshore wind planning regime so projects can be approved at speed. 

Finally, it believes the government must back critical technologies that will support the world’s decarbonisation in the decades ahead. As part of this, it wants business models for hydrogen production and carbon capture and storage to be confirmed by 2023, alongside backing the deployment of two additional carbon capture clusters by 2030. 

Discussing the broader topic of green growth, Danker said: “Going green will bring the UK economy its first post Brexit boom and allow us to genuinely outcompete the rest of the world. 

“The UK prize on offer is already worth tens of billions of pounds and rising. The UK needs to be hungry and ready to compete for the lion’s share of that investment. That means green jobs across the country, helping local economies - not just the national bottom line - all the while strengthening our global competitiveness for decades to come.

“At a time when growth is stalling in the UK and across the world, and the UK government is looking for solutions that won’t overheat the economy or break the bank. More than ever green growth is the growth bet we need. 

“The money is green; and today we have a competitive advantage. But that position is under rapid attack from our competitors. We dare not squander it.”