CBI chief urges action on energy crisis

As the AIRMIC Conference agenda focused on how firms could drive greater ESG the director general of the CBI has called for the Government to make “an all-out national effort” on energy efficiency.

Tony Danker opened the business group’s by unveiling the CBI’s strategy to simultaneously reduce energy bills at a time of high inflation and spur economic growth.

Danker said people must not be left “at the mercy of global oil and gas prices”. The best solution is to give people the tools to manage their demand via energy efficiency measures like home insulation. Second, by being an “early mover” on new green growth opportunities as the UK has been with offshore wind. Calling out climate sceptics he’ll say, “business and government must show decarbonisation is the solution, not the problem. We must show now how it delivers lower bills, better jobs, and brighter economic prospects”.

He used the speech to urge the Government to scrap its “fits and start approach” to energy efficiency, and instead find a long-term solution.

As part of its strategy he said the CBI is calling for urgent Government action on three fronts:

  • Legislate for the fourth ECO scheme before summer recess and commit £1 billion annual funding for energy efficiency retrofits, creating a new ECO+ scheme which helps more households kickstart their plans to fit insulation immediately.
  • Unblock delays to green infrastructure by publishing an accelerated planning regime for offshore wind projects, to cut delivery time in half. And reform the onshore wind planning regime to approve projects at speed.
  • Back critical technologies that will support the world’s decarbonisation in the decades ahead. Confirm business models for hydrogen production and carbon capture and storage by 2023; alongside backing the deployment of two additional carbon capture clusters by 2030.

“The war in Ukraine has made the switch to clean energy more urgent – to guarantee global security, national security and the security of every family in our country. Inflation changes the game too,” Danker said. “People feel powerless, some are at breaking point. Their lives at the mercy of global storms that they and even their own government have little ability to control.  While the Government’s recent support package will help ease some of the pressure, they’re clear it’s a temporary solution.

“Energy prices are likely to be higher for longer than we imagined.  Reimagining the supply side to reduce our fossil fuel use further will take years not months. This is a long-term crisis that needs a long-term solution, but people need a fix now.

“It’s driving something of a backlash against net zero, partly understandable in the circumstances. Yet coming most forcefully from long-time sceptics. Arguing net zero is a costly distraction. Better we stick with fossil fuels. Currently, the public don’t quite agree. Despite all the challenges, the surveys show continued commitment to tackling climate change.

“But we can’t be complacent. Business and government must take this seriously. We must show decarbonisation is the solution, not the problem, or we’ll lose that support. We must show now how it delivers lower bills, better jobs, and brighter economic prospects.”

“Going green will cut people’s energy bills,” he added. “By giving people more power to use less energy and limit the impact of rising fossil fuels prices on their lives. The Government’s Energy Security Strategy commits to fresh targets on the supply side. But what it fails to do in this crisis is say anything about the demand side. There are lots of ways to help people bring down their bills.

“The UK has some of Europe’s oldest, leakiest buildings. UK homes lose heat up to three-times faster than more energy-efficient homes in countries, such as Germany. It’s estimated that government cuts to climate policies over the last decade, including energy efficiency measures, have added around £2.5 billion to the nation’s energy bills, costing households over £40 a year. To be on track to achieve our targets, the UK needs to invest around £5.2 billion every year to 2035 in making homes more energy efficient. That amounts to a split of around £1.7 billion of public investment per year and £3.5 billion private from landlords and homeowners able to pay.

“That sounds expensive. But higher energy bills and resulting inflation just cost the Chancellor £22 billion’s worth of support in the Spring; £15 billion 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?”

Danker called in businesses to [play their part.

“What we’ve set out on energy demand and supply side, will allow Government to stop acting like a pressure cooker – forever responding to events when they boil over,” he explained. “But there’s work for businesses too. First, helping customers and employees cope with current hardship. Providing advice alongside direct assistance or payment plans to ease the burden.

“As for energy suppliers, taking measures, such as the Vulnerability Commitment, using data from smart and prepayment meters to target and strengthen support for vulnerable customers and continuing to help customers fit energy efficiency upgrades and tools like smart thermostats.

“To every firm, stay on track on your own net zero journeys. If you’re well on your way to decarbonising your operations, products and services, build on your achievements. Increase your ambitions. And look to see how you can help your customers, supply chains and other firms beyond your sector get on too.”

“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.”

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