Energy price crisis: ECA calls for energy levy reform

In January 2022, leading electrotechnical and engineering services trade body ECA called on the Government and industry to reform and rebalance the energy levy framework. To avoid the looming cost of living crisis, subsidies for fossil fuel energy must be abolished and taxes on electricity reduced.

ECA’s Energy and Emerging Technologies Solutions Advisor Luke Osborne said in a video statement, “Because of several interconnected global factors, energy prices are steadily rising. These price hikes are frightening and could act as a flashpoint in the growing cost of living crisis.

“Household energy bills look set to rise even more by this spring, up to 50%, threatening to throw millions into fuel poverty. UK households are feeling the squeeze more than ever, and yet the solution to skyrocketing energy prices may be right under our noses.

“We at ECA are calling on the Government to intervene now before this becomes a national crisis.”

The video can be viewed on YouTube.

ECA’s statement outlined three ways the Government could act:

1. Address the inequalities in gas and electricity levies. Levies currently make up 23% of electricity charges and just 2% of gas charges. If these charges were reversed, it would be cheaper for households to switch from gas to electric.
2. Reduce our dependence on imported gas. The Government, and industry, need to invest heavily in new, renewable sources of energy immediately. This includes investment in flexible energy storage systems that will take pressure off the national electrical grid and make renewable energy more sustainable.
3. Reduce VAT on battery storage systems, solar panels and heat pumps to encourage uptake and make it even more cost effective for households to make the switch to these technologies. The more we do to reduce the upfront cost of making the switch, the quicker households will start to feel the benefits of reduced energy bills in the long run.

ECA works with others to influence the development of energy-related policy. It promotes energy efficiency, renewable power and the development of battery storage as a means to promote lower costs and greater energy security.

This article originally appeared on the ECA website. It was published on 11 January 2022.

--ECA

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