RS2: The Energy Landscape

Government: Bold Ambitions, Clear Direction 

The Warm Homes Plan sets out ambitions that represent a real departure from what came before - 5 million homes upgraded by 2030 and heat pump delivery scaled up tenfold. Crucially, the emphasis has shifted from a "fabric first" approach to a combination of light fabric improvements paired with solar, battery storage and heat pumps. 

Williams noted other significant elements of the plan: heat networks remain firmly in scope despite being notoriously difficult to deliver well in practice; there's a push for collaboration between local authorities, grid operators, and housing associations to plan more locally; and new business models like energy as a service get an explicit mention. The recently launched Warm Homes Fund consultation is digging into what finance mechanisms could accelerate delivery, James encouraged everyone to engage with it. 

Great British Energy's Local Power Plan sits alongside this, with a target of close to 1,000 community energy projects. The message coming through, James said, is that "the energy system is smarter, more local, and more joined up." Applications are already open. 

The Clean Power Plan is equally ambitious, reducing average CO₂ emissions per unit of electricity from around 170g to under 50g. Achieving this at pace means renewables, and it means flexibility. The government's position: "smart, local, electrified" is the direction, and the metrics and compliance frameworks are being aligned to support it.  

Energy Pricing: A Roller Coaster That Isn't Stopping 

The recent fall in the energy price cap has been welcome, but it needs context. A significant part of that saving came from moving policy costs like ECO funding off bills and into general taxation. The net reduction for households was less than the headline suggested: a £150 drop on paper translated to around £117 in real savings once the underlying rise was accounted for. 

More troublingly, wholesale prices have jumped sharply following disruption in the Strait of Hormuz. The UK imports only around 2% of its gas from the Middle East, but because energy is a global market, international events move prices here regardless. As James put it:

"Even if we drill for more in the North Sea, the price is still set by global markets." 

Cornwall Insight is now forecasting the price cap will rise to around £1,836 at the next revision, with further increases to follow. "We just can't predict where the next conflict or challenge will come from," James said. "Reducing this reliance on external markets has to be the number one priority, not just for organisations, but for the UK generally." 

Government is responding on several fronts: the Warm Home Discount has been expanded and committed to through to 2030; there are efforts to break the structural link between gas and electricity pricing; and there are pilots of zero standing charge tariffs from April, though James was cautious about whether these would genuinely benefit the lowest-income households, noting that very low consumption is itself often a sign of a deeper problem. 

Supplier failure risk was flagged as a continued concern. With one major supplier holding around 5 million supply points, the consequences of a Bulb-style collapse, and who ends up bearing the cost, remain a live issue for the sector. 

The Changing Grid: Flexibility Is Not Optional 

The energy grid is undergoing a fundamental shift, and social housing sits right in the middle of it. 

Government has set ambitious targets for flexibility at household and community level - in-home batteries, heat pumps and other assets that can respond to grid conditions are now explicitly part of the future energy system. James described this as "not just maybe stuff, this is how do you carve your rollout within this system change." 

One technical change worth understanding is Market-Wide Half Hourly Settlement (MHHS). Currently, most electricity billing is based on estimated consumption profiles rather than actual half-hourly usage. When this becomes mandatory, every home's consumption will be traded on a half-hourly basis. This matters for social housing because it unlocks the real value of renewables and smart assets, value that simply cannot be captured under a profile-based system. 

Williams also explained why electricity prices remain tied to gas even as renewables grow. The "marginal price" mechanism means that if gas is the last source switched on to meet demand, it sets the price for everyone, including households powered entirely by wind and solar. Government is trying to address this through contract-for-difference arrangements with generators, but it's slow-moving and contested. 

The broader message: "Being ready to move, having already done the due diligence on different providers and models, means you won't be starting from scratch when opportunities arise." Government, James noted, is moving fast. Funding is being pushed out the door with short timelines. Organisations that have already done 12–18 months of learning and preparation will be the ones who can act. 

New Models: Things Worth Watching 

Several emerging models and regulatory changes were highlighted as worth monitoring closely. 

Energy as a Service has now been named explicitly in the Warm Homes Plan as a potential solution, a moment Williams described as a significant shift after years of advocacy for the model. It treats energy as an outcome delivered to residents rather than a commodity sold to them. 

Aggregators are entering the energy market, organisations that will trade the value of batteries, heat pumps and flexible assets on behalf of housing providers and residents. Regulation is being relaxed to enable rather than restrict them, and the market is developing quickly. 

Social tariffs: a private member's bill is progressing through Parliament to create a dedicated tariff for low-income households. Whether it advances remains uncertain, but it's one to watch. 

Warm Rents: discussed in detail in the Q&A (see below), this model proposes that landlords take responsibility for heating a home to a minimum standard, with rent and energy costs rebalanced so that residents in better-performing homes pay more rent but less on bills, and vice versa. James described it as potentially "the major initiative for the sector" within three years. 

Load controllers -the organisations that remotely manage heating and battery systems in homes, are coming under licensing requirements. James welcomed this as giving housing providers more confidence in the due diligence they need to carry out on any provider offering these services. 

Q&A: What the Room Wanted to Know 

Would a change of government derail any of this? 

James was direct: no, not fundamentally. While a different government might favour different technologies or solutions, the energy security argument now stands on its own. "Regardless of your views on climate, economically, reducing reliance on external markets is the best outcome for the system." He added that the framing is shifting too — health is increasingly the language being used, and "no one's going to say no to an unhealthy home." 

Tell us more about Warm Rents. 

The group discussed an active pilot that aims to test the principle of landlords guaranteeing a minimum home temperature of 18°C. The model involves five organisations, each testing different technological solutions - including Sero, IOTSG, Aiko and Zap Carbon - with the pilot running October 26 to March 27. Between 10 and 50 homes per organisation is the target intake, with sign-up open until the end of May. 

Previous pilots were run with Clarion, Yorkshire Housing and A Place for People. Yorkshire Housing has since extended the concept to an estate-level approach, aiming to ensure no home drops below 18°C and using on-site renewables to help fund it. 

The conversation got into one of the trickier realities of engagement: "When you offer people free heating, they don't believe it." Building on existing trusted relationships within organisations, rather than cold outreach, emerged as the most effective approach. Resident video testimonials were suggested as a way to support future recruitment, even if filmed informally on a phone. The group also noted that social housing residents are often wary of being asked to go on record, and that the option of anonymous feedback matters. 

The policy argument behind Warm Rents was also laid out: currently, rent is set the same for an EPC D home and an EPC A home on the same street. Yet a resident moved into a poorly performing home is effectively in fuel poverty the moment they sign the tenancy. A flexible rent model, where total housing costs (rent plus energy) remain comparable regardless of the property's efficiency, would make the system equitable and transparent. "You've got to be able to pick effectively who's going to be warm and who isn't," one participant observed. "And this tries to address that." 

What about the Heat Transfer Coefficient? 

Work is underway with DESNAS on the Smith Project to incorporate the Heat Transfer Coefficient (HTC) - a measure of how quickly heat escapes from a home - into the EPC as a voluntary metric. The argument is that the HTC gives a more precise and actionable picture of what it actually costs to heat a home than the current EPC rating alone. "You will know that that home costs 330 pounds to heat, so it becomes a lot easier when you're looking at what you're actually going to pay." If successful, this could make the EPC a more meaningful tool for outcome-based funding models.  

Questions for Housing Providers to Reflect On 

1. Your retrofit programme is a technology and contractor decision, but it's also a data decision. Are you capturing what you need to demonstrate outcomes, access future finance, and participate in the flexibility market? 

2. The Warm Rents model asks landlords to take on responsibility for energy outcomes, not just energy efficiency. Is your organisation ready for that conversation, with residents, with your board, and with government? 

3. Government funding is moving fast and windows can be short. What would it take for your organisation to go from "interested" to "ready to act" in under three months? 

Key Takeaways 

1. Energy security has joined, and in some ways overtaken, decarbonisation as the driving rationale for retrofit. The policy direction remains the same, but the argument for social housing providers is now broader: warm homes, lower bills, and resilience against volatile global markets are all part of the same case. 

2. The energy system is changing in ways that create real financial opportunities for social housing, but only for organisations that are prepared. Flexibility, aggregation, half-hourly settlement and community energy are not distant prospects. They are developing now, and due diligence takes time. 

3. Outcome-based thinking, whether through Warm Rents, the Heat Transfer Coefficient, or outcome-linked funding, is the direction policy is heading. Providers who can demonstrate what actually happens in a home (temperatures, bills, health impacts) will be in a stronger position than those who can only report what was installed.