The UK Government released it’s Heat and Buildings Strategy – so we can Build Better Now, what do we need to know?
The UK Government has launched its Heat and Buildings Strategy ahead of the opening of COP26 this week. The strategy details how the UK Government is planning to tackle carbon emissions from the UK’s 30 million homes and workplaces in a simple, low-cost and green way whilst ensuring this remains affordable and fair for households across the country.
At 200 pages long, there is a lot in it. Turley Sustainability Director, Barny Evans, has done the hard work to provide a summary of the 25 key points, alongside a more in-depth explanation and his personal view on the highlights
25 things you need to know: key strategy points and what they mean
- Signalling the UK’s intention to phase out the installation of new natural gas boilers from 2035
All replacement heating systems from 2035 will not be able to use natural gas boilers.
- Setting a clear ambition for industry to reduce the costs of installing a heat pump by at least 25-50% by 2025 and to ensure heat pumps are no more expensive to buy and run than gas boilers by 2030
Working with industry and the supply chain to drive down prices to reduce the gap with gas boilers.
- Improving heat pump appeal by continuing to invest in research and innovation
£60m investment in innovation.
- Ensuring affordability by providing financial support to meet capital costs
£450m available as £5,000 grants for homes to replace gas boilers with air source heat pumps.
- Rebalancing energy prices to ensure that heat pumps are no more expensive to buy and run than gas boilers
Switching taxes and levies from electricity to natural gas, to reduce the cost of electricity.
- Significantly growing the supply chain for heat pumps to 2028
Using a market mechanism to grow heat pump installations. There is a consultation on the method, and it is suggested it will be a requirement on manufacturers to increase their heat pump sales as a % of heating systems.
- Ensuring all new buildings in England are ready for Net Zero from 2025
No new gas connections from 2025. This mandates heat pumps and is already feeding into many new developments with builders switching to all-electric proposals.
- Intention to start phasing out the installation of fossil fuel heating systems in properties not connected to the gas grid
Proposing to insist that only heat pumps are retrofitted to off-gas grid properties. Homes from 2026 and non-domestic properties from 2024.
- Growing UK-manufactured technology and capabilities
Supporting the 30-fold increase in heat pump installations to be manufactured in the UK.
- Ensuring the electricity system can accommodate increased electricity demand and heat pumps can be quickly and affordably connected to the network
Working on regulation and technology to manage electrical demand more smartly to enable the easy integration of heat pumps and electric vehicles.
- Developing hydrogen for heating buildings by thoroughly assessing the feasibility, safety, consumer experience and other costs and benefits, by the middle of the decade
Research and development with industry.
- Establishing large-scale trials of hydrogen for heating
UK Government funded neighbourhood trial in 2023 and village-scale trial in 2025.
- Enabling blending of hydrogen in the gas grid
Assessing safety and cost of up to 20% by volume of H2 injection into the grid.
- Consulting on hydrogen-ready boilers
Whether to require new boilers from 2026 to be hydrogen-ready.
- Developing the evidence base necessary to take strategic decisions on the role of hydrogen for heating buildings in 2026
Looking at results of trials, planning and R&D to make decision about final role of H2 in heating buildings in 2026.
- Improving the performance of existing homes
Aim for all homes that can to have EPC rating of C or better in England and consultations on requirements in the private-rented sector.
- Supporting social housing, low income and fuel poor households
Nearly £2bn for social housing and low income households in grants up to 2025.
- Leading through the public sector
Targeting 75% GHG emissions reduction from public estate by 2037. £1.4bn to be invested by 2025.
- Setting long-term direction and clear signals
A commitment to long-term targets to allow markets in green finance and a slow ratcheting process on standards to allow adaptation.
- Significantly reducing energy consumption of commercial, and industrial buildings by 2030
Requirement for all commercial buildings to have an EPC rating of B by 2030 and new system of rating for very large industrial and commercial buildings.
- Launch a new world-class policy framework for energy-related products
Replacing EU energy efficiency rating system with similar scheme for consumer products to reduce energy demand and bills.
- Considering how to ensure flexible demand and supply (including through smart technologies and energy storage) is taken into account across the full range of energy performance, fuel poverty and heat policies, including regulation and subsidy schemes
Updating current method for assessing efficiency in buildings to recognise benefits of smart energy management and use of energy storage.
- Developing a workforce pipeline with the skills to meet the requirements of Net Zero transition
Formal standards and training programmes and qualifications to ensure quality and ensure there is sufficient workforce.
- Accelerating growth of the low-carbon heat network market through a series of complementary measures
£338m on heat network transformation programme and better consumer protection.
- Increasing the proportion of biomethane in the gas grid in Great Britain
Green Gas Support Scheme which makes payments for biomethane injection into gas grid.
Commentary on some of the key points.
For the UK’s existing building stock the headline was the £450m grant to upgrade heat pumps. At £5k a go this will support up to 90,000 installations. This has been criticised as being too small. In fairness, this sits alongside other investment in social housing and is more of a pump-prime for the supply chain in existing homes. Still, with a commitment to 600,000 new heat pump (HP) installations per year in the UK by 2028, and a long term market of over 1m, that is a very small step.
What interested me is the huge uncertainty on the uptake of this grant. They could be swamped and have the whole thing used up in a year, or perhaps it will take years to be used. How will the UK Government respond in either case? This uncertainty is exacerbated by the huge variation in price and quality in the market. Which brings us to…
Skills and training
The strategy quotes industry research showing the supply chain willing and able to switch from gas boilers to heat pumps, which is great. It also commits to a variety of training support packages and acknowledges and plans for the large gaps in skills and labour across the heat and energy efficiency sector. Quality control is crucial and HPs are much more sensitive to control, design and quality of installation factors than boilers. The strategy points out that the current Trustmark standard for companies, and the Micro-generation Certification Standard (MCS) for companies, products and installations, offer protection. I think, in the early years at least, these need to be beefed up so that we set off on the right path until there is greater understanding across the public and the culture is embedded in the supply chain. That leads nicely to…
The new build sector in the UK
We already knew that for new build we will have a Future Homes and Future Buildings Standard from 2025 that will improve insulation and other elements in the domestic sector. This, along with other moves around smart energy and electric vehicles, is going to change new buildings more than we have in decades. The crucial point is that fossil fuels will no longer be allowed. This effectively mandates heat pumps. Many of the new developments we are working on are already committed to this. The benefit this brings to the supply chain is that we can be confident of a market of approximately 300,000 homes, plus commercial buildings that will require heat pumps, designers, installers and maintainers.
Domestic running costs are crucial and the UK Government recognises that currently environmental tariffs on electricity are making it less competitive against gas. This is unhelpful because electricity is much lower carbon and emits no air pollution at the point of use. There is a commitment to move tariffs from electricity to gas this decade. I agree with the plan, but I wonder if this will be a prickly issue. People with gas heating could be disproportionately from lower socio-economics groups, and reducing costs for those in higher socio-economic groups with heat pumps could be a tricky decision. Arguably it would be better to put these costs onto general taxation where there is more weighting on ability to pay, but with a massive UK Government debt the temptation is to keep it on bills.
On hydrogen, the general feeling in the market, supported by the Committee on Change, is that it has a role in the economy, mainly in heavy industry – fertiliser, aviation and shipping. It is likely to only be a very small part of building heating. This does leave a difficult decision for the UK Government around existing gas networks and users. The UK Government response here is to continue trials and commit to make the decision in 2026. It will be an interesting watching brief.
The Smart Energy Future
An issue I believe has been underestimated is the importance of smart meters unlocking variable price tariffs, and the clever use of energy storage, with their ability to reduce bills and GHG emissions. There is already good research data that suggests once people have heat pumps and electric cars there is a lot more smart control of when energy is used. It is pleasing that the strategy confirms that there will be changes to the way buildings are assessed to acknowledge and reward these methods. Also, plans on regulation at an electrical network level to increase the opportunities.
What does it mean for the future in the UK?
So we finally have the strategy. It has been due for almost a year and its gestation owes something to the major issue about decarbonisation in the 2020s; it is personal, expensive and is happening to the public. The 2010s were very successful with wind turbines and solar farms. We switched power generation from coal to gas, deindustrialisation and inventions like LED lighting reduced energy demand. Most of this either did not affect us directly or was only a minor change. This decade we will switch our cars to electric, our homes to heat pumps and the energy market is going to get smart and complex. This makes it much more contentious and challenging, building heat more than most.
This strategy is a start, but leaves some difficult decisions still to be made. It is an exciting time.
This article was first published on Turley.co.uk.