Heat pumps and insulation would cut UK living costs more than new oilfields, study suggests

A new study suggests that insulating British homes and investing in heat pumps would have a greater impact on cutting living costs, creating jobs, and boosting the UK economy than drilling for new oil. The £15 billion warm homes plan, currently under threat of cuts, would reduce household energy bills by £1 billion annually for low-income households, boost the economy by £1.6 billion, and create 50,000 new jobs.

In contrast, the Rosebank oilfield in the North Sea would generate around 1,100 direct and indirect jobs. Labour had promised to halt new licensing for oil and gas in its 2024 election manifesto, but the Jackdaw gasfield and Rosebank might be exceptions due to their existing status in the licensing system. Equinor, a major player in the Rosebank and Jackdaw projects, estimated 3,500 jobs could be created at peak, but research from WWF and Uplift shows that tax revenues are likely to be limited due to concessions granted to drillers.

While total profits from Rosebank could reach £1.5 billion, the UK government faces a potential loss of £258 million through tax breaks and incentives. Tax revenues from the North Sea have been declining, projected to fall to about £100 million by 2030. Decommissioning costs for drilling platforms could amount to £12 billion. The warm homes plan aims to insulate up to 5 million homes, drawing in £15 billion in private investment and boosting GDP by 0.08%.

However, if the UK taxpayer funded decommissioning, it could outweigh any positive impact. Union leaders and 600 scientists have opposed granting a license to Rosebank, citing concerns about its environmental impact. Adura, a joint venture between Equinor and Shell that owns Rosebank and Jackdaw, believes the projects would generate £35.3 billion in UK economic value between 2026 and 2035.