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A new report from the trade group has called for the government to set a clear date for mandating hydrogen ready boilers to give consumers greater choice for low carbon heat options

The Energy and Utilities Alliance (EUA) argues UK heating policy is failing to sufficiently address the upfront costs of heat pump adoption and the related systematic improvements of energy networks.

A new report from the trade group entitled, ‘The Upfront Cost of Decarbonising Your Home’, has claimed that a heat pump could cost up to five times the expected price of installing hydrogen-ready boilers that are yet to launch on the market. An initial price estimate for hydrogen-ready boilers that could be launched on the market from around the middle of the current decade is around £3,000, according to the EUA.

The recently published Heat and Buildings Strategy has begun to flesh out some additional financial and market commitments from the government to try and reduce heat pump costs over the next decade. This could also include reforming energy subsidies to favour electric over gas systems, although this is not expected in the short-term owing to ongoing concerns over gas prices, according to the government’s Autumn Budget.

Cost fears

EUA chief executive Mike Foster said that the efforts to decarbonise homes were vital to meet the UK’s net zero legal targets.  However, he claimed that consumers did not presently have money to afford the upfront costs of heat pumps that are expected to play a major role in plans to move away from fossil fuel heat.

He said, “The recent Heat and Building Strategy is right to demand massive reductions in the cost of heat pumps, which according to this report can cost consumers up to seven times that of a simple boiler switch.”

“Many heating industry experts are sceptical that the scale of the cost reduction can be achieved, with the claim that heat pump costs will be at parity with gas boilers by April next year, as simply implausible.”

In representing a number of heating and utilities associations that include boiler manufacturers, the EUA’s report argued that heat pumps should not be seen as a like-for-like replacement for natural gas boilers that currently provide heat to a majority of UK homes.

Mr Foster also claimed that a majority of UK homes were not suitable for heat pump use – a claim that is questioned by some engineers that suggest a national retrofit strategy could ensure the efficient use of such systems for a large number of properties.

He said, “When an existing boiler needs replacing, installing a hydrogen-ready version, at no extra cost, means that a householder can switch over to clean burning hydrogen when it’s available in the network.”

“There is no silver bullet to tackle the challenging target of achieving Net Zero by 2050 and every energy solution will be needed to play its part.”

Another conclusion of the report is that the cost of moving to cleaner energy for purposes such as heat will vary depending on the fabric of a building and what energy efficiency improvements have been made.

Mike Foster said it would be vital to ensure consumers had a clear understanding of the options for transitioning from fossil fuel heating.  This could include switching from natural gas heat to hydrogen, which is touted as a carbon free fuel at the point of use.  However, current production methods for the gas are presently dependent on fossil fuels to ensure mass scale generation.

Hydrogen-ready mandate

Mr Foster added that hydrogen should be considered a vital part of the UK’s net zero transition plans.

He said, “We urge the government to expedite a decision to mandate hydrogen ready boilers so that when a boiler reaches the end of its natural life it can replaced which one which is future proof.  The UK’s leading boiler manufacturers have made a promise that the hydrogen-ready boilers can be produced at the equivalent cost of today’s natural gas equivalents and with the products already developed they are ready to start manufacturing.”

A forward to the EUA’s report by Conservative MP Jacob Young, who is also Chair of the All Party Parliamentary Group on Hydrogen, argued that no one heat solution can support the decarbonisation of the UK.

Mr Young added that a variety of different system should be made available to the consumer to provide a choice on the how they may want to heat different types of properties that make up the UK housing stock.

He said, “Whilst there is undoubtedly a need for heat pumps and heat networks, I fully believe in the exciting opportunity hydrogen is providing in meeting our net zero targets. When looking at low disruption options, hydrogen-ready boilers could in fact be introduced as a standard product in the boiler replacement cycle at no additional cost to current natural gas boilers.”

Heat pump incentives

The government has committed to significantly expand the adoption and installation of heat pumps with a target to have at least 600,000 units installed a year from 2028. A range of new financial incentives were unveiled by the government last month in its delayed Heat and Buildings Strategy that aims to try and lower the current costs of installing and operating heat pumps to meet this target.

This includes a pledge to start offering £5,000 government grants from 2022 to encourage heat pump installations in up to 30,000 homes over a three-year period, as well as plans to reduce the overall costs of the systems.

The Climate Change Committee has predicted that heat pumps will be the most common technology for providing heat in UK homes by 2050 under its projections for national decarbonisation set out in proposals for the 6th Carbon Budget.

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