?? UK’s energy bills vs EU’s clean industrial deal
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Hello!
?? This week, I received a few emails from my energy and water providers with the subject line “our prices are changing”.
?? My water provider’s email read: “On average, our bills for typical metered water and wastewater customers will increase by 16 pounds ($20) per month in 2025-26.”
?This was shortly followed by an email from my energy provider which said: “The energy regulator Ofgem has just announced the energy price cap is set to rise by an average of 6.4% on 1 April, meaning your bills are likely to increase.”
?? Britain’s Department for Energy Security and Net Zero announced that the energy rise in the price cap “in practice, will mean an increase of around 9 pounds per month for a typical household over the next three months.”
?? What’s the reason for the price hike? Well, wholesale gas and power prices are a major part of the formula Ofgem uses to calculate the price cap and those went up this month.
?? That’s an additional 25 pounds per month to set aside for utilities – and that’s just for water and energy bills.
?? This is why the findings from a government report highlighting the long-term benefits of clean energy in the UK, such as reduced emissions and potential cost savings, are particularly frustrating at this time for people struggling to pay their bills.?
700 pounds cheaper per annum
?? The UK’s Climate Change Committee's (CCC) seventh carbon budget for 2038-2042 report showed that transitioning to clean energy would reduce energy bills by around 700 pounds ($883) annually, with household driving bills also predicted to decrease similarly.
? “These huge savings are possible because a clean energy system is far more energy efficient and wipes out the devastating impact of spikes in gas prices, which are once again raising energy bills,” said Ed Matthew, director of the UK program of the independent climate change think tank E3G.
?? But these savings can only be achieved if Britain cuts emissions by 87% compared with 1990 levels by 2040 to reach net zero and targets set under the international Paris Climate Agreement.
?? The CCC report, designed to show how the target can be met, recommends more than half of current homes should also have heat pumps installed by 2040, up from around 1% now. The CCC is an independent, statutory body established under the Climate Change Act 2008 to advise the government on emissions targets.
?? Transferring heating and transport to green electricity will require twice as much electricity as today, the report said and will need a massive ramp up in renewable power.
The CCC also recommended that levies for environmental and social schemes on domestic electricity bills should be removed, which would reduce bills by 19% and that moving those costs to taxation would spread them more fairly.??
What about Europe?
?? The emails from the UK utilities and the CCC report made me wonder if things were different in the European Union.
?? This week, the European Commission announced the bloc’s Affordable Energy Action Plan to lower electricity bills, help roll out clean energy sources and diversify suppliers.
?? The Plan falls under the EU’s Clean Industrial Deal proposal which will make 100 billion euros ($105 billion) available to support EU-made clean manufacturing and streamline public procurement processes for clean technology.
The EU said that the Plan combines measures to lower energy bills in the short term with cost-saving structural reforms. It addresses all price components of the energy bills, notably energy supply costs, network charges, and taxes and levies.
?? Additionally, the EU notes that the Plan “will help ensure that retail electricity bills are not dictated by high and volatile gas prices thanks to a broader uptake of long-term contracts for clean power.”
That’s a different tack to Britain’s.
?? In Conversation
Andromeda ‘Andie’ Wood, vice president of regulatory strategy at software firm Workiva, shares her thoughts on the EU’s Simplification Omnibus:
“As it stands, reactions to the Omnibus Law have been mixed. Most agree that some simplification of the rules is desirable, as they were drafted separately, and experience has uncovered areas of overlap and confusion.
However, the proposals for the level of simplification have varied depending on the commenters.
Many companies welcome the aim of a reduced burden, but many emphasise the difference between simplification and deregulation, and do not support the latter.
Since not all countries in Europe have successfully transposed the Corporate Sustainability Reporting Directive (CSRD) rules, we are seeing some companies in those countries reporting under the requirement regardless.
In countries that have already implemented the rules, reporting is already underway, and companies have either done the work or are getting started. Countries that have not implemented it will likely not continue to work on the law as it stands.
Companies will need to decide on the best way to ensure that they are meeting all their transparency needs, remaining comparable and competitive with peers and, of course, still reporting sustainability information.
Many organisations were already reporting on sustainability before the CSRD and expect to continue, regardless of regulation.
The drivers behind sustainability reporting do not abate, as it remains a key piece of the corporate competitiveness landscape.”
?? ESG Spotlight
?? Today’s spotlight sticks with the theme of clean energy as Denmark is on course to meet its 2030 target of slashing its territorial greenhouse gas emissions by 70% from 1990 levels, a government-appointed council said.
Denmark's goal, launched in 2020, is one of the world's most ambitious, while other countries' pledges still fall far short of what is needed to reach their Paris Agreement targets.
?? "This is a success story in a world of gloomy climate news," the Danish Council on Climate Change said in its annual report.
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