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Proposals for a ‘national energy guarantee’

  • by JW

“The scheme aims to protect essential energy needs at a low cost, while applying a premium to higher usage levels.” [Energy Live News]


Last year, the New Economic Foundation suggested bringing in ‘universal basic energy’:

Scrap the existing price cap system and replace it with a new system of ​‘free basic energy’. Under this system every household would be entitled to a free amount of energy consumption, but would pay a higher marginal cost for energy use above the free amount.

At the same time, a group of cross-party MPs presented the Energy Equity Commission Bill in Parliament – which is currently making its way through Parliament, to bring in the proposed Energy Equity Commission.

Meanwhile, the NEF has proposed an very similar way to help with rising energy bills – with its proposed National Energy Guarantee:

Being able to heat your home to a comfortable temperature is a basic need that we all share. With energy costs support due to end entirely in 2024, this is our opportunity to fix our energy system once and for all. Energy is an essential service which we all need to live, and we need to be prepared for the energy shocks of the future. A National Energy Guarantee will entitle every household to a free or cheap amount of energy to cover their essential needs.

And as of today, they are asking constituents to write to their MP:

When the Government’s Energy Bill comes back to the House of Commons on the 5th September, MPs have an unmissable chance to fix our broken energy pricing system once and for all. Clive Lewis MP has tabled New Clause 36, which would introduce a National Energy Guarantee. It’s one of three amendments backed by the All-Party Parliamentary Group on the Green New Deal.

There’s been a lot of interest from the energy sector – with this overview from Energy Live News:

The government‘s support for energy bills has “failed” households and by April 2024 even the existing “inadequate” support will be gone, leaving bills potentially 70% above pre-crisis levels. That’s according to the think tank New Economics Foundation, which proposes a new scheme – a ‘national energy guarantee’ – that protects essential energy needs at a low cost, while applying a premium to higher usage.

This system will benefit all households, with a safety net placed under their essential energy needs, and the premium price acting as an incentive for domestic investment in energy efficiency and renewables, NEF has said.

The proposal involves two or three price tiers, with a minimum allocation of energy priced at 50% below pre-crisis levels, allowances and a social tariff to protect low-income households. Experts … note that the scheme is a more efficient and effective way of delivering government support where needed, with a similar cost to recent windfall taxes on energy producers.

Finally, a similar effort to bring in a national energy guarantee in Australia was made back in 2018 – but failed almost immediately as part of the country’s ‘carbon tax wars’.

How will similar efforts go in the UK…?