Kevin Wellman, CEO of the Chartered Institute of Plumbing and Heating Engineering (CIPHE), comments on the surge wholesale gas prices have experienced this year and the impact this could have on policy-making, and the heating industry.
The headlines are full of news about rising gas prices and energy company bailouts, as wholesale gas prices have increased by an astronomical 250% since January. With warnings of huge energy bills for those coming to the end of their fixed deals, and a 13% rise for households on pre-payment meters, many are understandably worried about the impact on their income and their ability to pay.
With heating and hot water accounting for over 50% of fuel bills, it is easy to see how the costs can add up. The Resolution Foundation has found that families on Universal Credit are four times more likely than the wider population to be on pre-payment meters. While the energy price cap is set to rise by £139 a year (12%) to £1,277 for average gas and electricity customers from 1st October, those on pre-payment meters are facing a larger increase of £153 (13%). With the £20 a week Universal Credit uplift also ending in October, the timing couldn’t be worse.
It is clear that fuel and water poverty are a growing problem in the UK. According to government statistics approximately 3.66 million households are fuel poor and around 3 million households are unable to pay water bills. Lone parents with dependents make up nearly 19%, with fuel poverty the highest in the private rented sector.
Through its latest manifesto the CIPHE has been urging Government to bring in policies to target the energy efficiency of dwellings - especially those in band D and under - and tackle the issues associated with poverty at their source. Those on low incomes should pay fair and competitive tariffs for energy use.
Furthermore, the current situation highlights the issues around existing and new housing stock. It is fundamental to the net-zero agenda that every building is as energy efficient as possible, and that our engineers have the right knowledge and skills to install energy efficient appliances.
As gas prices increase, it makes a more compelling case for alternative technologies such as heat pumps. The CIPHE in partnership with manufacturers and industry organisations will shortly be launching a low temperature design qualification. The uncertainty around gas supplies and prices shows why we can’t delay in upskilling the industry - change has to happen now.”
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