UK risks another energy crisis, expert commission warns

The UK is at significant risk of facing another energy crisis due to its heavy reliance on gas for electricity and heating, according to a new report from the Energy Crisis Commission.

This high-level group of experts, which includes representatives from Energy UK, the CBI, Citizens Advice and National Energy Action, was established to review the impacts of the energy crisis on households and businesses and make recommendations to better equip the country to withstand possible future energy crises.

The Commission’s findings indicate that UK households and businesses have been disproportionately affected compared to many European countries, largely due to the nation’s dependence on gas. The UK ranks as the second most dependent country on gas for heating and fifth for electricity generation within the EU.

Slow progress in improving inefficient housing stock and delays in new-build efficiency standards are identified as leading to higher household energy bills. The report also states that poorly-targeted support has particularly impacted poorer households. The impact on businesses has also been notable, with nearly 8% of firms reporting halting operations due to increased energy costs and 22% indicating they would rely on cash reserves to cope with higher energy costs.

To enhance resilience, the Commission recommends developing a clear strategy for transitioning away from fossil fuels, particularly gas, while increasing public investment in improving home energy efficiency. The report also advocates for the accelerated installation of electric heat pumps and a comprehensive plan for moving away from gas heating. Targeted support for businesses and energy-intensive industries to facilitate decarbonisation is also urged.

The Rt Hon David Laws, who chaired the Commission:

“The UK has experienced regular energy price shocks over the last 50 years, which have damaged economic growth and hit both households and businesses. Future oil and gas shocks seem inevitable, but the UK remains poorly prepared to absorb these. Our report shows that the country remains highly vulnerable to future energy shocks and needs to make three big changes to protect itself.

“Firstly, we need to further accelerate the move away from coal, oil and unabated gas, and shift much more to home-grown renewable sources of power – with adequate storage back-up. Here the new government is giving a welcome lead in areas such as solar power, onshore wind and the stepping up of clean energy investment.

“Secondly, we need to reduce high energy demand, for example from our poorly insulated housing stock. Progress on home energy insulation has simply not been good enough, and there is a need for new measures to meet the challenge.

“Finally, we need a much more efficient and targeted system of energy support for consumers and businesses, so that money goes to those who need assistance, when they need it. Past and present support has been and is badly and wastefully targeted – with those in most need not getting the help they deserve.

“Experience in other countries shows that global energy price shocks need not have catastrophic impacts on economies and societies if we take the types of actions detailed in this report.”

View the report, Protecting the UK from a future energy crisis