The UK Government released its latest Energy Security Strategy in late March 2023. It was issued by Grant Shapps MP, Secretary of State for the newly named Department for Energy Security and Net Zero.

There is very little in the document which directly relates to how ordinary people conduct their lives. We might view this as a positive, in so far as to be a success, the Green Energy Transition shouldn’t be disruptive to our lives, and much of it can be handled by the Government and the Energy Industry.

But there is one paragraph which people should take notice of:

“The Government has an ambition to phase out all new and replacement natural gas boilers by 2035 at the latest….People’s homes will be heated by British electricity, not imported gas. The Heat Pump Investment Accelerator will mean heat pumps are manufactured in the UK at a scale never seen before. We want to make it as cheap to buy and run a heat pump as a gas boiler by extending the Boiler Upgrade Scheme by three years, and by rebalancing the costs of electricity and gas.”

There is quite a lot in this wee paragraph. Let’s take a closer look:

1. The 2035 phase out of gas boilers remains an ambition at this stage, but it is a back stop date. So, the date may well come forwards.
2. There is a clear and consistent message about the phasing out of gas as a way to heat homes. This policy has been restated in multiple UK Government Strategy documents now, with Powering Up Britain being the latest.
3. There are subsidy schemes running presently to help folk transition to heat pumps. These will eventually be phased out, but the expectation is that in the future heat pump installations will be significantly cheaper than they are at present.
4. The costs of electricity and gas will rebalance.

As with a lot of UK Government policy statements, the killer blow is left till last, and is made to sound innocuous.

“rebalancing the costs of electricity and gas”

What does this mean? The report goes on to say: “Rebalancing will generate the clear short-term price signal necessary to shift both households and businesses to lower-carbon, more energy efficient technologies like heat pumps.”

I’ll put it another way for you:

Gas will become more expensive relative to electricity than it has been up until now.

When? “The Government should make significant progress affecting relative prices by the end of 2024.

So, just to be totally clear.

The UK Government policy is to increase the price of gas relative to electricity, and they intend to do this starting before the next General Election in 2025.

What does this mean in practice? I expect that a few pennies will be placed on the cost of a unit of gas, and that this “levy” will escalate over time. So, if gas is 2 pence per unit more expensive than it would have otherwise been in 2025, then in 2026 it might be 3 pence, and so on.

I would expect that the “levy” will be used to fund some other investment project elsewhere – perhaps helping out low-income households or historic buildings that require significant investment to help them shift off natural gas or oil boilers.

I don’t expect that there will be a pro-rata reduction in the price of electricity. That isn’t how these things work!

So what?

Heating your home using natural gas will become much more expensive in the future, and increasingly so as time goes on.

What are my options?

Insulate. Insulate some more. Adopt low temperature heating methods to maximise the efficiency of your current heating system. This is partially a behavioural change, but might require some bigger radiators in your home.

When the time comes to replace your gas boiler, consider getting a heat pump.

But a word of advice! Don’t put your head in the sand. If your boiler breaks down and requires replacing during winter, it is extremely unlikely that you’ll be able to replace it with a heat pump in a timely fashion.

So, if your boiler is more than 10 years old, take some precautionary measures now. Otherwise you’ll end up making a distressed purchase of a boiler and be locked into buying gas for the next decade, in the knowledge that the UK Government will be artificially making gas more expensive than it needs to be.

Let Brimstone Energy be your guide. We can help you navigate the Green Energy Transition.