UK will look to incentivise consumers to turn to low carbon options such as heat pumps and heat networks over next decade, rather than legislate to outlaw natural gas boilers

The government has published its full Heat and Buildings Strategy that builds on headline proposals announced earlier this week to provide funding to expand heat pump adoption.

Among the standout pledges included in the strategy are an ambition to gradually phase out the installation of fossil fuel heating systems by 2035. These commitments fall short of an outright ban on natural gas boilers, with a range of consultations launched alongside the strategy instead to look at how the market for low carbon heat solutions can be made more attractive to consumers and installers.

Experts such as the independent Climate Change Committee (CCC) have previously called for a commitment to legislate against allowing installation of natural gas boilers by 2033. The body argued such regulation would force the market to expand its reliance on heat pumps that are already on the market, as well as to encourage a move to heat network and hydrogen ready boilers over the next decade.

MP Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy, said the government had opted against a ban at present in favour of incentivising consumers to switch to different technologies.

He said, “Heat pumps are already a predominant technology in some other countries, and have high levels of customer satisfaction; however, work needs to be done to build UK supply chains and drive down costs.”

“Meanwhile we will continue to invest in hydrogen heating through the neighbourhood and village trials, and the plan for the town pilot. This will allow us to take strategic decisions on the role of hydrogen in heating by 2026.”

It was announced yesterday that Households will be offered £5,000 government grants from next year to install heat pumps as part of a £450m scheme to replace their current natural gas boilers.

Meanwhile, a separate allotment of £60m would be spent to encourage innovation both in the design and efficiency of heat pump systems, but also how existing barriers around skills and costs can be addressed via the industry.

Energy challenge

The strategy does identify a challenge around ‘rebalancing energy prices’ to ensure near parity with the current costs of running natural gas boilers as a major priority to realise net zero heat.

No exact timeline or actions are set out to achieve this in the strategy. The document instead has accepted that the current high price for gas made it difficult to address tariffs and charges on an immediate basis.

The Heat and Buildings Strategy said, “Our plan to expand our domestic renewables will push down electricity wholesale prices. However, current pricing of electricity and gas does not incentivise consumers to make green choices, such as switching from gas boilers to electric heat pumps.”

“We want to reduce electricity costs so when the current gas spike subsides we will look at options to shift or rebalance energy levies (such as the Renewables Obligation and Feed-in-Tariffs) and obligations (such as the Energy Company Obligation) away from electricity to gas over this decade.”

Don’t forget heat networks

As expected, the strategy also backs support for a much wider range of technologies that needed further to identify what the best solutions are for heating different types of buildings and regions. At the same time, the strategy will look to directly back action to immediately step-up adoption of market ready systems.

The document highlights a possible role for hydronic heat pumps in buildings not connected to the gas grid and new build properties.  Heat networks meanwhile are also seen as a vital approach to ensure decarbonisation of buildings at scale. The strategy commits to expanding use of network solutions for areas of high-density heat demand that could include cities and other areas located near to low carbon heat sources.

A new Green Heat Network Fund is set to launch next year as part of a border transformation programme that will look at issues such as zoning to define the areas that would best benefit from these solutions.  New regulations are also expected to ensure more efficient and low carbon networks are in place that can also guarantee better consumer protections for those connected to the system.

In terms of energy efficiency, the government said it was “exploring opportunities” to improve the performance of owner-occupier homes building on workshops with industry bodies and NGOs.

The strategy stated, “We are planning to consult further, to gather views on a broad range of options to upgrade homes in this sector, which will inform policy design.”

A number of notable consultations have been launched alongside the strategy. These include getting industry feedback on proposals to end allowing fossil fuel heating systems to be fitted in off-grid properties from 2026 with a focus on prioritising heat pumps wherever possible.

Another will seek industry feedback on what new mechanisms can be introduced at a market level to encourage growth in heat pump adoption nationally.


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