NEWS UPDATE ENERGY POLICY


Manufacturing sector presses for electricity market reform


UK ‘cannot air condition its way’ out of heat crisis


The UK needs an urgent national cooling strategy to cope with rising temperatures and avoid a surge in air conditioning that could drive up emissions and energy demand. The Environmental Investigation


Agency’s (EIA) briefing, UK Cooling Policy in a Warming World, says Britain is warming faster than the global average and is increasingly exposed to dangerous heat. The report warns that heatwaves


are already causing thousands of excess deaths each year and that more than half of UK homes are at risk of overheating. Under a 2ºC warming scenario, that figure could rise to more than 90% by 2050. Without intervention, the UK


risks an unplanned expansion of air conditioning, increasing electricity demand and widening inequalities as access to cooling remains uneven. The environmental group is calling on the government to develop a National Cooling Action Plan that brings together climate adaptation, public health and net zero goals. According to the briefing, the


UK has warmed by around 0.25ºC per decade since the 1980s. It also points to 2025 as the country’s hottest year on record, with more than 40,000 hectares burned during the UK’s worst wildfire season. The report further raises concerns over hydrofluorocarbons (HFCs), the refrigerants commonly used in cooling systems that have a much greater warming impact than carbon dioxide.


While the UK is legally committed


to cutting HFC use by 79% between 2015 and 2030, the EIA says proposals to strengthen the phase- down have been delayed beyond 2027, leaving Britain behind the European Union, which has legislated for a complete phase-out by 2050. The briefing argues that passive


cooling measures, including better building design and climate-resilient urban planning, should be prioritised over making air conditioning the default response to rising temperatures.


06


UK manufacturers are warning that rising industrial electricity prices could put production at risk and cost the economy an estimated £85bn a year unless the next government reforms the energy market. This is according to a report published by industry body Make UK in partnership with energy company Ecotricity.


Minimum performance certificates only to apply to the very largest buildings


Seven years after originally announcing its intention to ensure that all non-residential buildings would need to achieve a minimum energy performance certificate rating of C by 2027 and of B by 2030, the government has now decided that such requirements need only apply in the very largest commercial buildings leased out. And for good measure, no landlords need do anything about upgrading their leased-out building until December 2031. Only commercial buildings with a usable occupancy area above 1,000m² will be required to make any energy improvements at all, beyond the minimum EPC level E legislated for a decade ago. Upgrading need only occur when occupants of these larger buildings change, and then only “practical and affordable improvements” with a


The report says 90% of


manufacturers have seen their energy bills increase since 2022, with more than half identifying energy costs as the biggest challenge facing their business over the coming years. It also finds that 13% of firms


believe further rises in energy costs could threaten their survival. Make UK estimates that a 13% fall in


manufacturing activity would result in an annual £85bn hit to the UK economy, including around £50bn across supply chains. The report argues that electricity


prices remain artificially high because gas continues to set the wholesale price of power for much of the market. It also points to policy levies on electricity bills, slow grid connections, ageing infrastructure and post-Brexit trading arrangements as factors increasing costs for industry. Despite the pressure,


manufacturers continue to back decarbonisation. Nearly three- quarters of respondents said a renewables-led electricity system would deliver lower power prices, while 71% said net zero remained important to their business. The survey also found that almost nine in ten companies have introduced energy efficiency measures, 63% have begun electrification projects and 87% would invest more if the price gap between gas and electricity narrowed. Ecotricity founder Dale Vince says:


“British companies continue to face some of the highest energy costs in Europe – our next Prime Minister must seize the opportunity to lift this burden from our whole economy and finally ‘break the link’.”


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maximum seven-year payback can be anticipated. This means that those owning the


vast majority of leased buildings, so many of which are under 1,000m², will remain with no future requirement to improve these buildings. This will be a blow to prospective tenants of these unimproved lettings who will end up paying far larger energy bills than they should reasonably expect. As initially proposed, implementing


these improvements was set to stimulate the economy by what would be worth over £12 billion extra (at 2025 prices). This was the anticipated benefit forecast by the last government in its initial economic


impact assessment. Curiously, no new figure has been published by this government regarding just how much lower that potential benefit to the economy can now be expected to be. Removing standard sized buildings from the requirements was never an option considered as part of the public consultation. Instead, the government has


stated that its failure to upgrade energy standards for the majority of commercial buildings is designed to give landlords of smaller properties “greater flexibility to upgrade buildings, without a deadline for meeting a higher standard”.


EIBI | JULY � AUGUST 2026


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