Call to level out environmental levies as energy prices soar

Following the introduction of a record-breaking energy price cap rise, Kensa Group is calling on the government to level out the current disparity in levies that cause electricity to be four times as expensive as gas.

The high price of electricity, Kensa points out, is partly due to environmental levies tacked on to electricity bills to pay for subsidies for renewable technologies. The average cost of a kWh of gas in the UK is currently around 3.8p. For electricity, it is about 16.3p. After the price cap rise, this is will be 7p for gas and 28p for electricity.

Kensa believes addressing this distortion will ensure that homeowners installing low carbon heat pumps can feel the financial benefits of the technology’s exceptional efficiencies at a time when people are looking to make as many savings as possible on their heating bills.

For those facing fuel poverty, increases in the energy price cap make replacing inefficient and costly heating systems, such as direct electricity in tower blocks, with ground source heating solutions all the more crucial. If levies were proportioned equally, Kensa asserts, this renewable technology could save even more money for the people that need it the most.

Kensa is calling for these environmental levies to be levelled out by properly proportioning them against carbon emissions. As electrically-driven appliances with no combustion, ground source heat pumps are proven to have the lowest carbon emissions of all heating technologies, delivering a 77% saving on emissions versus gas, per unit of heat delivered.

Guy Cashmore, technical director for Kensa, said: “The government has put heavy levies on electricity, however this is at odds with its aims to decarbonise homes and buildings through the electrification of heat. It also causes people to lose out on a percentage of the running cost savings that could be gained from installing ground source heat pumps – the most carbon-efficient heating technology available.

“Policymakers have recognised this is wrong but, as yet, nothing has been done to correct this distortion. Now is the time to act to protect those who have already made environmentally friendly electric heating choices, and encourage more people to make the switch from fossil fuels. Surely it’s time for UK energy policy to follow the science.”