How will the energy crisis affect households in Carmarthenshire?

The energy crisis is a broad-based economic shock that can threaten social and economic stability in the UK. Households in Carmarthenshire will be hit hard. We find that the average household in Carmarthenshire may see increases in energy bills of £1236 per year, even with the existing government support in place through the Energy Price Guarantee (EPG). Without the EPG, average energy bills would increase by as much as £2136 when measuring prices as per the Ofgem October announced prices.

This is an economic shock that affects all households in Carmarthenshire, even households who consume very little energy, which may threaten the social and economic stability in this country and your community.

Figure 1: Impact of energy crisis on households in Carmarthenshire: Increase in annual average energy bills

Government intervention, for example through the Energy Price Guarantee may temporarily reduce the burden on households, but ultimately, the higher price for energy will be paid either by households directly, or indirectly, through the government, which needs to raise taxes, cut spending or borrow in order to cover the cost.

But there is another alternative: to save energy. And the savings potential in Carmarthenshire is large. We estimate that all households in Carmarthenshire combined could save more than £28 million in energy bills per year at current market prices. In fact, if homes for which we do not have data are comparable to those for which we do have data, financial savings could be as high as £64 million per year.

This savings potential exists because we estimate that the residential building stock in Carmarthenshire could save up to 35% of its primary energy consumption if buildings were properly insulated. We estimate that the building stock in Carmarthenshire alone could save at least 76000 tons of CO2 per year. The CO2 savings themselves have a monetary value: at present emissions trading prices of £78 per ton of CO2, we estimate that the 76000 tons of CO2 emissions that could be saved are worth £5.9 million per year.

Figure 2 – Energy, financial and CO2 savings potential in Carmarthenshire’s building stock

Helping households insulate their properties could be a win-win-win as households could permanently save money; it would support the fight against the climate crisis and it could help reduce our vulnerability to foreign powers that may use energy as leverage or as a weapon in a hybrid war.

With the crisis unfolding, households may feel helpless and even more disconnected from the central government. Yet, our research highlights that empowering households to unlock the savings potential in their own homes is key to their wellbeing and to the country’s decarbonisation goals.

Therefore, it is imperative for local government and local councils to devise ways to ensure that the existing schemes reach households. Our team will be happy to assist in identifying barriers to take-up of energy efficiency investments, in designing programs to overcome these barriers, and in finding out “what works”. Such a partnership can make your district an example to follow in the whole country.

We have prepared more analysis specific to Carmarthenshire that is available as a brief here.