Insulation could cut gas imports by three times more than new North Sea drilling

Insulation

Insulation of homes could save up to 384TWh (terawatt hours) of gas over the period 2030 to 2035, compared to 118TWh of gas that could be produced by new ‘already approved’ North Sea fields over the same period, new analysis from the Energy and Climate Intelligence Unit finds.

384TWh is equivalent to a fifth (20 per cent) of current total annual household gas demand or 11 per cent of gas imports.

In addition, the analysis finds that reaching the UK Government’s target for all homes of Energy Performance Certificate (EPC) band C could lower the total amount paid for gas in the average home (currently EPC band D) by £1,944 by the start of 2030 in a central scenario. This rises to £2,469 saved in total by the start of 2030 if gas prices stay high for the rest of the decade as some industry experts are predicting. For homes with a poorer EPC rating of band F, total savings could reach £4,486 in a central scenario and £5,697 if gas prices stay high.

“Earlier this year the Treasury, under the now Prime Minister’s direction, blocked an increase in funding for insulating homes,” said Jess Ralston, senior analyst at ECIU. “Making more efficient use and wasting less energy in the past has driven a quarter of the UK’s growth. It also leaves homes less vulnerable to international gas price shocks, something that new North Sea gas fields won’t.

“With the autumn statement looming, there are concerns that other efficiency funds could be raided leaving hospitals and schools facing higher electricity bills and the UK as a whole no better off. It remains to be seen if the government will kick the can down the road, rob Peter to pay Paul or genuinely increase investment.”

In 2022, it is expected that just 150,000 homes will benefit from energy efficiency installations. At that rate, just 1.2million homes in the UK will have had insulation installed by the end of 2030, far below what is needed to reach the Government’s target of bringing the vast majority of homes up to EPC C by 2035.

Previous analysis has shown that energy efficiency, including insulation, contributed 25 per cent economic growth between 1971 and 2013 and polling shows that energy efficiency is backed by the public, with 82 per cent supporting the Government offering financial help to make homes more energy efficient.

It has been reported that delivery of insulation under the Government’s flagship Energy Company Obligation (ECO) scheme has stalled after internal government delays, resulting in 18,750 low income households potentially missing out on the measures that could save them £300 each.

Insulating all homes to EPC band C in line with the Government’s 2035 target, at the timeline recommended in the Climate Chance Committee’s ‘Balanced Pathway’ to the 6th Carbon Budget, could cut domestic gas demand by between 49TWh/yr and 64TWh/yr. The range is due to uncertain predictions for annual domestic gas demand in 2022 after the covid pandemic where it could remain at 2021 levels (318TWh/yr), or return to the 2019-2021 average (303TWh/yr).

Uplift analysis for ECIU shows gas production from the 11 ‘already approved’ North Sea fields would start producing in the 2020s, peak in 2028 at 57TWh/yr and then decline. Production data was sourced from field Environmental Statements and the consultancy, Rystad Energy.

Gas savings from insulation for the period 2030-2035 vary depending on demand for 2022. 294TWh is saved if annual domestic gas demand returns to the average for 2019-2021, and 384TWh is saved if annual domestic gas demand stays at 2021 levels.

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