A new type of British hobbyist may appear, if politicians and climate activists have their way: gas boiler collectors. To achieve decarbonisation targets by 2050, the UK government plans to electrify homes and businesses. Green groups such as the Climate Change Committee want all gas boilers replaced by 2033, potentially costing each household £10,000.
Individuals will ultimately have to pay for energy transition. The cost of failing to do so would be steeper. Think of parched farmland, freak weather events and surging immigration. That message is unpopular with voters and consumers. Politicians and regulators are in a bind.
Official timidity was apparent in guidelines from UK electricity and gas regulator Ofgem on Tuesday. It reduced significantly — for the coming five years — what electricity and gas networks can earn on their regulated assets. Ofgem’s efforts will not add up to much. Consumers will pay £10 less annually for essential investments to the electricity and gas networks.
This reduction in charges seems curious when the UK government is promising to speed up energy transition. Transmission groups such as National Grid and SSE need more renewable assets and should make reasonable returns from them. Ofgem tries to limit unnecessary investment. Had it done nothing, energy bills would have risen by an average of £18 a year.
That looks like small change compared with what households might pay in other areas. Renewable energy costs have fallen — 39 per cent for offshore wind, according to the International Renewable Energy Agency, much more for solar. These trends will reduce the impact on consumers, says the CCC. But it is pie in the sky for the CCC to expect every household boiler to be “hydrogen ready” when there is no wholesale gas making or distribution system.
The bigger challenge is to persuade voters and consumers that short-term investment will have long-term environmental payback. Not all of the bill can be covered by better technology and economies of scale. The easiest part of the green revolution has already passed.
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