Climate Change Committee’s progress report echoes long standing concerns of the heat pump supply chain.
As a company working at the heart of the decarbonisation of heating and homes, Kensa is all too aware of the huge challenges in trying to increase heat pump deployment and build a supply chain capable of achieving the government’s targets. At heart, this challenge is a consumer one. It is no small feat to get some 24 million homes to replace their gas boilers with unfamiliar technology, particularly when it often requires major adaptations to their central heating system. However, we have no hope of achieving this mammoth task without a clear, coherent and long-standing policy framework from the government, this has unfortunately been sorely lacking in recent years.
This year’s annual progress report from the Climate Change Committee’s (CCC) sets out the heat pump industry’s concerns in black and white.
Whilst steps have been made in the right direction, momentum has been lost and progress is too slow to put us on track to hit 600,000 heat pump installations a year by 2028. Damningly the CCC said its “confidence in the UK meeting its medium-term targets has decreased in the past year”, and that “a key opportunity to raise the overall pace of delivery has been missed.”
The key findings of the report in relation to heat pump installations are as follows:
- UK is way off track on building decarbonisation, against all key metrics including heat pump deployment, cost reduction, training and energy efficiency installations
- UK is bottom of the EU table, 21st out of 21, for per capita installations
- Supply chains for heat pump manufacture and installations are not developing at the pace required
- The government’s market signals on clean heat have been too weak and too confusing – delaying business investment and putting off consumers
- Comparable countries to the UK (like Germany and Netherlands) are taking far bolder steps to shift the market, banning new fossil fuel boilers from the middle of 2020
Richard Warren, Director of Public Affairs at The Kensa Group, shares his thoughts:
Despite the wholly negative conclusions from the CCC’s report regarding progress on heat pumps, the report is to be welcomed in sending a clear message to the government that it is off track and needs to up its game. The report is abundantly clear that the electrification of heat is key to decarbonising buildings, and we have no time to lose in introducing key policies to enable this transition.
Recent studies, such as that published by Element Energy demonstrate the benefits of ground source heat pumps, including lower household bills and energy consumption, reduced strain on the electricity grid, and billions saved in energy infrastructure upgrades and investment.
However, as a British manufacturer committed to supporting the government’s climate targets, developing a domestic supply chain and championing green growth, the policy environment remains extremely challenging for us. If the UK is to experience the full benefits of ground source energy, it is vital the government starts to see this technology as a long-term infrastructure investment – a 21st-century replacement for the gas grid – and develops policy accordingly.
What we need, as the report clearly states, is for the government to shift from ambition to delivery of net zero policies. Kensa will be looking to engage with the appropriate individuals at the CCC to ensure an understanding of the challenges for the ground source heat pump sector and what policies are required to unlock growth.
Enabling Policies Required:
The CCC’s report rightly sets out a number of important recommendations that the government needs to enact to enable rapid electrification of heat. These include:
- Confirm that electrification of heat is the default decarbonisation option to provide certainty to the market
- Design, finalise and implement the Future Homes Standard by 2025, stipulating low carbon heating for all new homes
- Finalise plans to prohibit the installation of fossil fuel boilers in off-gas grid properties from 2026, and on-gas grid properties from 2033 or 2035
- Commit to long-term funding, beyond this spending review period, for key support schemes including the Boiler Upgrade Scheme and Social Housing Decarbonisation Fund
- Reducing the cost of electricity relative to gas to make heat pumps cheaper to run than boilers
- Reform to SAP and EPCs to better facilitate the uptake of low-carbon heat measures
Further policies for ground source heat:
Kensa and the wider ground source industry warmly welcome all the CCC’s recommendations in this area. However, it is vital to recognise that even this comprehensive report falls short in identifying measures necessary to unlock the full potential of ground source heat pumps, and networked heat pumps in particular. Because networked heat pumps sit somewhere between heat network policy and heat pump policy they are too often forgotten and a major gap in thinking and policy remains.
As Element Energy’s recent Low Carbon Heat Study demonstrated, failing to capitalise on the benefits of networked heat pumps would leave the UK using more energy, paying more for its electricity network, and householders paying more in bills. Two major additional areas of reform are required here:
- Reform of Heat Pump Support Schemes: Kensa’s overarching aim is for a subsidy free market for its products by 2028. Provided the right regulations are introduced to ban the connection of gas connections to new properties from 2025 (Future Homes Standard), networked GSHPs in new developments will be an economically viable solution very soon. However, with a target of 600,000 heat pumps a year by 2028, and new builds accounting for less than 200,000 installations/year, it is patently obvious that most of the growth will need to come from retrofitting buildings in the private and social housing sectors.
Important reforms and further funding are required across major schemes like the Boiler Upgrade Scheme, the Social Housing Decarbonisation Fund, ECO4, Green Heat Network Fund, Green Homes Grant to ensure enough heat pump each year. Critically, to deliver the benefits available from networked heat pumps it is vital that support schemes start to recognise that heat pumps are not one single technology, but two (ASHP and GSHP) with each providing their own benefits and drawbacks.
Support schemes must recognise the long-term benefits GSHP can provide over ASHP (100-year lifetime of infrastructure, greater efficiency, private sector funded networks) and provide bespoke support over the next five years to create the market for GSHP and help us build the UK supply and economies of scale necessary to deliver subsidy free by the end of the decade.
- Heat Zoning: Decarbonising heat is a huge challenge and will require using all the technologies we have at our disposal: air-source heat pumps, networked GSHP, heat networks, and hydrogen. However, it is increasingly clear that a planned strategic approach is required. Leaving everything up to consumer choice would result in huge additional infrastructure costs, vastly increase energy consumption and waste time and resources we do not have. Instead, we must see a comprehensive mapping of the UK into different ‘heat zones’ where the right heating technologies, deliver decarbonisation at the lowest system and consumer cost, are identified for each area.
The Energy Bill is starting this approach with plans to establish ‘Heat Network Zones’, but government must go further aiming to ‘heat zone’ the country, working with local authorities to establish the right technologies for the right places.
