Written evidence submitted by Electrical Contractors Association (WIN0031)
Q. What role did the UK grid play in the high domestic prices of winter 2022-23
Lack of renewable energy storage capacity
The lack of national storage solutions for grid energy production played a role in high prices. Although we can already produce substantial renewable energy, we do not have sufficient battery and other storage capacity to store it for when we need it most. If we did, we would be able to offset high prices during times of high energy demand.
Lack of fast-tracked renewable energy projects
In addition to storage solutions, we could have fast-tracked deployment of renewable energy generation, such as onshore, offshore wind, hydro (tidal or wave), Swansea Bay Lagoon, Wyre Barrage, Mostyn Docks, Severn Barrage, West Somerset Lagoon, Mersey Barrage or Lagoon, North Wales Lagoon and Morecambe Bay and Duddon Estuary Barrage are a few examples of successful renewable energy generation projects. A rapid increase in similar projects would have lessened the reliance on imported gas and electricity through interconnectors.
Weak investment in transmission and distribution networks
To enable increased generation and storage solutions,
Electricity taxation raised the price of home-grown renewable energy production.
The inflated price of electricity due to an outdated energy levy model meant potentially cheaper and locally produced renewable energy was still more expensive to users than imported fuel. Urgent policy adjustment is needed to reset the relative consumer price of electricity and gas. Local grid solutions that allow varied prices would be beneficial.
Delays in retrofitting existing housing stock.
Domestic retrofitting programmes are the single most effective way to reduce the UK’s energy requirements. If mechanisms can be in place to provide fabric-first energy efficiency and insulation solutions, then lower energy demand would naturally reduce domestic fuel bills.
Q. What more could have been done to prevent price shocks being passed to consumer bills?
There are several steps that could be taken to prevent price shocks. First, consider local solutions to allow renewable energy prices to be kept separate from those of wholesale ones. Second, incentivise domestic energy generation schemes. Third, improve storage technologies for times of high energy production so we are prepared for times of high demand. However, it is important to highlight that a skilled workforce underpins all of the required technology, so it is vital that we prioritise ensuring a competent and sufficient workforce that can install and maintain these necessary technologies.